Johnson & Johnson will pay more than $1 billion to the U.S. and most states to resolve a civil investigation into marketing of the antipsychotic Risperdal, according to people familiar with the matter.
J&J, the world's largest health products company, reached an agreement last week with the U.S. attorney in Philadelphia, according to the people, who weren't authorized to speak about the matter. Negotiations over a potential criminal plea are still under way, they said.
The U.S. government has been investigating Risperdal sales practices since 2004, including allegations that the company marketed the drug for unapproved uses, J&J has said in Securities and Exchange Commission filings. The company said it had been in negotiations with the U.S. to settle the investigation.
J&J, based in New Brunswick, N.J., disclosed in August that it had reached an agreement to settle a misdemeanor criminal charge related to Risperdal marketing. The company is discussing paying about $400 million more to settle that portion of the investigation, one of the people said.
"We're not going to comment on rumor or speculation," Teresa Mueller, a J&J spokeswoman, said in a phone interview.
Risperdal, once J&J's best-selling drug, generated worldwide sales of $24.2 billion from 2003 to 2010, reaching $4.5 billion in 2007. After that, J&J lost patent protection and sales declined. The settlement represents 31 percent of Risperdal's peak sales in 2007, before generic versions of the medicine eroded revenue. It's about 5.6 percent of the drug's cumulative sales since 2003.
The Food and Drug Administration approved Risperdal in 1993 for psychotic disorders including schizophrenia. That market is limited, and J&J's Janssen unit sought to sell Risperdal for bipolar disorder, dementia, mood and anxiety disorders and other unapproved uses, according to documents in a lawsuit against J&J by the state of Louisiana. It was later approved for other uses.
Company officials said in an SEC filing in May that they had reserved funds to resolve the government's claims over Risperdal marketing. The company didn't say how much had been set aside. The drugmaker said in an August filing that it had added an unspecified amount to the reserve to cover criminal penalties.
