Arkansas Supreme Court Asked to Reconsider Overturning $1.2B Judgment Against J&J

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Arkansas Attorney General Dustin McDaniel has asked the Arkansas Supreme Court to reconsider its ruling that overturned a $1.2 billion judgment against Johnson & Johnson over its marketing of the antipsychotic prescription drug Risperdal.

Mr. McDaniel filed a petition for rehearing in which he argued the court should revisit its March 20 ruling because the ruling was based on grounds not raised by any party in the case, according to an Arkansas News report. 

In August 2012, allegations Johnson & Johnson and subsidiary Janssen pharmaceuticals minimized the risks of Risperdal and marketed it for off-label use, in violation of the Arkansas Medicaid Fraud False Claims Act and the state's Deceptive Trade Practices Act, were settled with a $1.2 billion payment to the state.

On March 20, the Arkansas Supreme Court ruled 4-3 to reverse the award. In its majority opinion, the court said the Arkansas false claims act did not apply to Johnson & Johnson, based on the finding that the Arkansas Code Revision Commission had codified the law in a way that conflicted with legislative intent.

In his rehearing motion, Mr. McDaniel argued neither the state nor the drug maker had argued in any filing that the code revision had wrongly or rightly codified the law. "The court's willingness to decide the case on a ground not preserved or litigated by the parties departs from at least 170 years of otherwise consistent 'preservation of error' precedent, in which this court has traditionally refused to come to the aid of either party by deciding unpreserved issue," said McDaniel in the motion.  

McDaniel also argued the ruling "does significant harm to the state and its citizens" because it means drug companies "cannot be sanctioned when they lie to Medicaid, its enrollees and their physicians" about the risks of prescription drugs.

More Articles on False Claims Act:

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Supreme Court Leaves FCA Pleading Dispute to Circuits

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