In the latest of a long string of legal blows against the company, Johnson & Johnson has been hit with an $8 billion verdict by a Philadelphia jury in connection with its antipsychotic drug Risperdal. The drug has been alleged to cause female breast growth in boys who took the medication. The jury award was so large because the company was assessed punitive damages for its perceived misconduct in marketing and selling the drug. Now, assuming the jury verdict is not thrown out by the presiding judge, Johnson & Johnson will seek to appeal the verdict in an attempt to overturn it.
Johnson & Johnson has faced tens of thousands of lawsuits over the past several years stemming from issues tied to Risperdal. Specifically, Risperdal has been shown to cause gynecomastia in boys. This is an embarrassing condition where boys grow breasts, and it subjects them to bullying and further psychological damage. The breast growth is permanent and does not go away after the use of the drug has stopped. Many boys eventually need plastic surgery to remove the breast growth, a procedure that is not covered by medical insurance.
The drug was initially approved for use in 1993. The purpose of Risperdal was to treat adults for schizophrenia and other related disorders. However, like many drugs, Risperdal also had an off-label usage as well that the company encouraged. Risperdal was soon widely prescribed to children to treat mood disorders in boys. Many children received the drug to treat irritability that is associated with autism.
Johnson & Johnson purportedly made billions of dollars from this off-label usage. Previously, the company was settled a federal government probe for $2.2 billion that related to its off-label practices. The government took action against the company for giving doctors inducements to prescribe the drug for unapproved uses. This included speakers’ fees and other things of value.
While doctors are allowed to prescribe drugs as they wish to according to their professional obligations, drug companies face penalties when they illegally promote the drugs for off-label uses. The problem for the company is when they actively market the drug for an unapproved use. One of the public relations problems for the company that is associated with this is that one of the corporate executives who was closely identified with this behavior is now the CEO of the entire company.
Here, the compensatory award from the jury was $680,000. The plaintiff in the case was originally awarded more, but the amount was reduced by an appeals court. The key development here was that the jury was now allowed to assess punitive damages. Previously, it was forbidden from doing so because the court had applied the law of New Jersey, which is where Johnson & Johnson is based. New Jersey law does not permit punitive damages in these cases. However, a court ruling last year allowed the law of Pennsylvania to apply since it was the plaintiff’s home state.
The jury saw fit to award $8 billion in punitive damages due to the egregiousness of the company’s actions. The company’s promotion of Risperdal for children was alleged without any scientific evidence to support it. The primary issue was that Johnson & Johnson allegedly knew of the risks of gynecomastia, but continued to promote the drug for use in children. The company allegedly had no evidence of the benefits of the drug for children. Further, it did conclusively know that Risperdal could not harm children. Even when there were signs that children could be at risk, the company still encouraged off-label usage.
The result of the case was a sign that the company’s hard-line legal stance backfired. Johnson & Johnson had an earlier chance to settle the case but did not do so. The company usually fights cases in court rather than settle, and as seen below, it has had consequences for the business.
For Johnson & Johnson, the jury verdict was yet another setback for the company that has further tarnished its reputation. The pharmaceutical behemoth was hit with a $4.69 billion verdict in Missouri in 2018 over claims that its talc powder caused ovarian cancer. Johnson & Johnson has also faced blame for its role in the opioid crisis and was ordered to pay the State of Oklahoma $572 million in a landmark case. Even if this verdict does not fully stand up on appeal, the string of eye-popping verdicts is damaging the company’s reputation.
For Johnson & Johnson, this is now a time of peril. There are still 13,000 Risperdal lawsuits pending, even though the company has won dismissal of many legal actions. Johnson & Johnson has already indicated its intent to appeal the verdict. In all likelihood, the punitive damages will be lessened on appeal because staggering punitive damage awards are generally disfavored. Nonetheless, many of these verdicts remain in some form even if it is reduced.
Other verdicts in this case have survived on appeal. For example, there was a $2.5 million award that was upheld by the Pennsylvania Superior Court in 2018. This particular court also reversed a lower court’s ruling that punitive damages were not available and now this case is back in the lower court on the issue of punitive damages.
This adds up to significant legal risk for Johnson & Johnson at a time where it has multiple cases with large liability. Whether this particular verdict will force the company’s hand into settlement negotiations remains to be seen. In the meantime, if you or a loved one was prescribed Risperdal and developed gynecomastia, you may be entitled to substantial financial compensation. It is vital to consult with an attorney so that you can file a claim within the applicable statute of limitations.