Nevada Attorney General Announces Two Nationwide Settlements Over Anti-Psychotic Drugs, E-Books

CARSON CITY – The Nevada Attorney General’s Office has reached two separate agreements this week, one with a pharmaceutical firm over the marketing of anti-psychotic drugs and another with three book publishers over e-book price-fixing allegations.

The $181 million nationwide settlement announced today with Janssen Pharmaceuticals, Inc., a subsidiary of Johnson & Johnson Pharmaceutical, will bring $3.3 million to Nevada. It is the largest multi-state consumer protection settlement of its kind reached with a pharmaceutical company.

Photo by Housed via Wikimedia Commons.

The $69 million agreement with Hachette Book Group, HarperCollins Publishers and Simon & Schuster will return up to $600,000 in total compensation to Nevada consumers who purchased e-books.

Attorney General Catherine Cortez Masto said she and 36 other attorneys general reached the agreement  with Janssen after a multi-state investigation found that the company improperly marketed the anti-psychotic drugs Risperdal, Risperdal Consta, Risperdal M-Tab and Invega.

After an extensive four-year investigation, Janssen agreed to change not only how it promotes and markets its atypical antipsychotics but also agreed to refrain from any false, misleading or deceptive promotion of the drugs. In addition to the record-setting payment, the settlement targets specific concerns identified in the investigation. The settlement agreement restricts Janssen from promoting its atypical anti-psychotic drugs for “off-label” uses that the U.S. Food and Drug Administration (FDA) has not approved.

Federal law prohibits pharmaceutical manufacturers from promoting their products for off-label uses, although physicians may prescribe drugs for those uses. The complaint alleges that Janssen promoted Risperdal for off-label uses to both geriatric and pediatric populations, targeting patients with Alzheimer’s disease, dementia, depression, and anxiety, when these uses were not FDA-approved and for which Janssen had not established that Risperdal was safe and effective.

“Nevadans have a right to know the risks presented by atypical anti-psychotic drugs,” Masto said. “The settlement will protect Nevadans from further promotion of Janssen’s atypical anti-psychotic drugs for ‘off-label’ uses.”

The antitrust settlement with the book publishers, announced Wednesday by Masto and 54 attorneys general in other states, districts and U.S. territories, will also result in changes to the way they price e-books going forward.

The settlement is occurring in conjunction with a civil antitrust lawsuit filed today in federal court against Hachette, HarperCollins, and Simon & Schuster. In the lawsuit the states allege that the three settling publishers and others, including non-settling publishers Macmillan and Penguin (collectively, the “Agency Five” publishers), “conspired and agreed to increase retail e-book prices for all consumers” and “agreed to eliminate e-book retail price competition between e-book outlets, such that retail prices to consumers would be the same regardless of the outlet patronized by the consumer.”

Under the proposed settlement agreement, which the court must approve, Hachette, HarperCollins and Simon & Schuster will compensate consumers who purchased e-books from any of the Agency Five during the period of April 1, 2010 through May 21, 2012. Payments will begin 30 days after court approval of the settlement becomes final.

“Today’s settlement restores e-book competition among retailers and paves the way for restitution for Nevadans harmed by the scheme,” Masto said. “This news comes at a welcome time, considering the Silver State’s sluggish economy and the fact that this is the first week back to school for many K-12 and college students in Nevada. Our legal action sends a strong message that competitors cannot get away with price-fixing.”