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Drug company makes $181M settlement with states

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Janssen Pharmaceuticals Inc. and parent company Johnson & Johnson on Thursday announced a $181 million settlement with 36 states, including Indiana, and the District of Columbia over charges of marketing anti-psychotic drugs for non-approved uses.

New York Attorney General Eric Schneiderman, representing one of the states involved, claimed in a court filing that Janssen engaged in deceptive practices from 1998 to at least 2004 in the marketing of the drugs Risperdal, Risperdal Consta, Risperdal M-Tab and Invega. The multistate settlement comes amid a similar federal case that is still pending.

Schneiderman said the company promoted "off-label" uses of the drugs not approved by the Food and Drug Administration. For instance, Janssen is accused of promoting Risperdal, which is used to treat schizophrenia and other mental illnesses, for non-approved uses including dementia, anger management and anxiety. Janssen rewarded doctors who prescribed and promoted Risperdal for unapproved uses with lucrative consulting agreements, according to Schneiderman's complaint.

"This landmark settlement holds the companies accountable for practices that put patients in danger, and serves as a warning to other pharmaceutical giants that they must play by one set of rules. It goes further by ensuring that the corporations stop rewarding doctors for prescribing certain drugs or presenting scientifically-suspect studies as sound," Schneiderman said in a statement.

Janssen did not admit wrongdoing as part of the settlement, under which it agreed it would not promote the drugs for off-label uses or make misleading claims. The Titusville, N.J.-based company said it wanted to avoid unnecessary expenses and a prolonged legal process.

"We have chosen this path to achieve a prompt and full resolution of these state claims and to ensure we continue to focus on our mission of providing medicines to meet the significant unmet needs of many people who suffer from mental illness," Janssen President Michael Yang said in a statement.

Janssen said the multistate settlement is separate from the disclosure made earlier this month by Johnson & Johnson concerning an agreement in principle with the Department of Justice to settle three pending civil matters regarding the sales and marketing of Risperdal and Invega, the sales and marketing of the respiratory drug Natrecor and allegations that the drug dispensing company Omnicare Inc. of Kentucky was provided with rebates regarding Risperdal and other products.

The company said there are still unresolved issues with federal justice officials.

Omnicare agreed to pay $90 million in 2009 to resolve an inquiry into its actions. The government said Johnson & Johnson made illegal payments to Omnicare between 1999 and 2004, and Omnicare's annual sales of Risperdal nearly tripled to $280 million over that period.

Schneiderman called Thursday's action the largest-ever multistate consumer protection-based pharmaceutical settlement. New York will receive $9 million under the settlement.

In addition to New York, Indiana, the District of Columbia and lead state Florida, other states involved in the settlement are Alabama, Arizona, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, Wisconsin and Wyoming.

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