Sources suggest that Johnson & Johnson and the US Department of Justice are close to settling an investigation into the company's promotion of Risperdal (risperidone) for approximately $2 billion, The Wall Street Journal reported Wednesday. Under the agreement, which could be announced in the next few weeks, the drugmaker could avoid a felony charge that could prevent it from selling its medicines to government health programmes.
A sweeping settlement with the justice department would wrap together a number of lawsuits, state investigations and other probes regarding the company’s alleged illegal marketing practices. However, the sources noted that a final deal isn’t assured, especially considering the two sides must agree on a sum that will be large enough that state attorneys general, who have been pursuing and won several cases against the drugmaker, will sign on.
According to the sources, federal prosecutors were seeking at least $2 billion, but Johnson & Johnson sought hundreds of millions of dollars less. One person suggested that the sides are now discussing a deal of between $1.5 billion and $1.7 billion, although other people familiar with the negotiations said the amount could be closer to $2 billion or more. Johnson & Johnson announced earlier this month that it has set aside an additional $600 million to cover the cost of the civil cases related to the illegal marketing probes.
Johnson & Johnson has also faced probes into the promotion of a second schizophrenia therapy Invega (paliperidone), as well as the cardiovascular drug Natrecor (nesiritide), as well as an investigation into whether the company paid kickbacks to Omnicare to induce the nursing-home pharmacy operator to buy various drugs and then sell them to nursing homes.
In recent months, the company and federal prosecutors were said to be close to settling some of the matters, but the negotiations broke down after federal prosecutors rejected a tentative deal reached by attorneys in Philadelphia for about $1 billion, primarily involving Risperdal. As the talks have continued, Johnson & Johnson has faced judgments in various state courts that found illegal promotion of Risperdal and has been ordered to pay a total of more than $1.9 billion. The company is appealing several of the judgments.
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