A $1 billion lawsuit in which Texas accused Johnson & Johnson of plundering the state Medicaid program by overstating the safety of an expensive anti-psychotic drug and improperly influencing officials and doctors to push the medication has been settled, a person familiar with negotiations told The Associated Press.
The person told the AP the settlement would be announced in court Thursday morning but would not release details of the deal. The person spoke on condition of anonymity because the settlement has not yet been announced in court.
Testimony in the trial had been ongoing since Jan. 10. The trial was expected to last at least two weeks.
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The lawsuit is one of dozens of pending state and federal cases alleging illegal marketing practices and kickbacks in an effort to boost Risperdal over competing drugs. Risperdal is a pill for schizophrenia and bipolar disorder.
Lawyers for Texas Attorney General Greg Abbott and whistle-blower Allen Jones accused Johnson & Johnson and some of its subsidiaries of committing fraud against Medicaid, the joint state-federal health care program for the poor, by making false or misleading statements about Risperdal and its safety, cost and effectiveness compared to other drugs in the 1990s.
At the start of the trial, lawyers for the New Brunswick, N.J.-based health care giant had insisted the company did nothing improper in marketing the drug.
The lawsuit was originally filed in 2004 by Jones, a former employee of the Office of Inspector General in Pennsylvania, who said he learned of Johnson & Johnson's actions in Texas while investigating similar claims in his home state. Texas joined the case in 2006.
Last year, a South Carolina judge ruled Johnson & Johnson must pay a $327 million civil penalty after a jury found it guilty of overstating the safety and effectiveness of Risperdal. In 2010, a Louisiana jury found the company violated that state's Medicaid fraud act and awarded it $258 million in damages.
The company is appealing the Louisiana verdict and has said it will appeal the South Carolina verdict as well.