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March 21st, 2014

Another State High Court Slaps Down AG’s ‘Off-Label’ Lawsuit against Maker of ‘Miracle’ Drug

The Arkansas Supreme Court this week unanimously reversed a lower court’s $1.2 billion verdict won previously in an off-labeling lawsuit waged by the state’s attorney general and crony contingency fee lawyers against the maker of widely used and effective antipsychotic medication.

Even the state’s expert witness testified at trial that the 1994 introduction of Risperdal, made by Janssen Pharmaceuticals, Inc., was comparable to that of penicillin in the 1950s and called the antipsychotic a “godsend” and “miracle drug.”

Nevertheless, Arkansas Attorney General Dustin McDaniel had been convinced by private sector political patrons at the Houston-based personal injury law firm Bailey Perrin Bailey (BPB) that, if he hired them to run the state’s lawsuit on a contingency-fee basis, they could hound Janssen into a lucrative settlement by alleging that Janssen’s off-label marketing of Risperdal constituted fraud against the state’s Medicaid program.

But Janssen fought back and the case went to trial in 2012.

Now the state’s high court has reversed the trial verdict, finding that McDaniel and BPB erred by suing under a law that applied only to health care facilities, not drug companies.

As reported by the New York Times, “[r]epresentatives for Johnson & Johnson said they were pleased with the decision and stood by the safety and efficacy of their drug, used to treat patients with schizophrenia and bipolar disorder.”

McDaniel said he is “disappointed that the court viewed the law differently.”  And since BPB lawyers won’t get the more than $180 million in contingency fees they would have if the verdict had been upheld, McDaniel also may be disappointed because they’ll have that much less to contribute to his next political campaign.  (Can you say “pay-to-play?)

Encouragingly, the Arkansas Supreme Court’s slapdown of McDaniel and his scheming BPB cronies comes just two months after a similar high-court slapdown of Louisiana AG James “Buddy” Caldwell and his personal injury lawyer political patrons who tried to run the off-label-marketing-is-fraud racket on Janssen to the tune of $258 million.

Here’s hoping South Carolina’s high court, which is soon expected to render its decision on another appeal of a Risperdal verdict, follows the Arkansas and Louisiana courts, as Thomas M. Melsheimer, a Dallas lawyer quoted by the Times suggests it might.

He says pharmaceutical companies have become increasingly successful at prevailing in such drug marketing cases at the state level.

“There’s a big question about whether off-label marketing cases are on life support,” Melsheimer said, adding that many state laws were primarily designed to police the actions of health care providers like doctors, not necessarily drug companies. “If you’re trying to shoehorn off-label claims into a fraud case or a consumer-protection case, that can be really challenging.”

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