Attorney General Dustin McDaniel
from John Lynch in this morning's D-G on the $1.2 billion fine imposed by Circuit Judge Tim Fox
in April of 2012 after a jury found Johnson & Johnson
liable for Medicaid fraud over the marketing of the anti-psychotic drug Risperdal
. The company was found to have misled doctors and patients about dangerous side effects of the drug.
Johnson & Johnson denies wrongdoing and is appealing the case to the Arkansas Supreme Court.
The company paid more than $2 billion last month to settle federal cases regarding the marketing of Risperdal but still faces the potential of more fines in Arkansas and other states.
If upheld, the case would represent a big win for Attorney General Dustin McDaniel
and a healthy chunk of change for the state Medicaid program. Post judgement, interest accrues at 10 percent compounding annually, more than $400,000 per day. As the two-year mark approaches, that could amount to an additional $300 million on top of the original $1.2 billion. If McDaniel had opted along with 36 other states to settle in a multi-state action, the share for Arkansas would have been only around $2 million.
An earlier version of this post suggested that the award would come minus attorney fees for the national lawyer involved in the case, but in fact, the court awarded the state more than $180 million for attorney fees in a separate hearing (also accruing interest, also on appeal).
Worth noting: according to trial testimony, J & J accrued nearly $30 billion in net profits on Risperdal between 1994 and 2010.