J & J pays $158 million to settle Texas Medicaid fraud lawsuit

J & J pays $158 million to settle Texas Medicaid fraud lawsuit

Johnson & Johnson has agreed to pay $158 million to settle a Medicaid fraud lawsuit.

The lawsuit accused J & J subsidiary Janssen Pharmaceuticals of giving state officials kickbacks in exchange for putting the antipsychotic Risperdal on an approved list for Medicaid recipients. The suit also claimed that Janssen marketed the drug as being a safe and cost-effective, despite the fact that it was linked to an increased risk of stroke and death in elderly dementia patients. Risperdal is only approved to treat adult schizophrenia.

Lawyers representing the state of Texas originally asked that Janssen repay $579 million to the state's Medicaid program, plus up to $500 million in penalties, the Associated Press reported.

"Janssen ran amok,” Allen Jones, one of the plaintiffs, told the AP. “They trashed the Johnson & Johnson credo, and they misused Texas and, I believe, well-meaning officials to further their marketing.”

Johnson & Johnson was recently ordered to pay $327 million in South Carolina and the $258 million in Louisiana in similar Risperdal lawsuits.