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Johnson & Johnson to pay $1 billion to settle litigation

Johnson & Johnson, the largest manufacturer of health products in the world, has not been immune from a rash of recalled products and other business litigation, some of which has directly affected customers in Michigan.

The latest event in the company's legal saga came recently when Johnson & Johnson reportedly agreed to pay $1 billion to the United States government and most individual states to resolve an investigation that is examining how the company marketed one of its drugs.

A drug called Risperdal is at the center of the investigation, hailed as one of the company's best-selling drugs. Between 2003 and 2010, Johnson & Johnson racked up $24.2 billion in sales of the drug. However, allegations started to fly that the company marketed Risperdal for unauthorized purposes. The United States Food and Drug Administration originally approved the drug to be used by patients to combat schizophrenia and other similar psychotic disorders.

Wanting to open up sales of the drug to a wider demographic of patients, Johnson & Johnson allegedly marketed the drug to be used to help in bipolar disorder, anxiety disorders and even dementia. The FDA did not approve these, among other uses.

Administrators for the company have not yet confirmed the settlement and there is no telling exactly when they will. What is known is that Johnson & Johnson has set aside funds to resolve the case. Each individual state involved in the settlement can choose to accept the deal struck between the federal government and Johnson & Johnson, or choose to go forward with litigation of its own.

Source: Bloomberg, "J&J said to agree to pay $1 billion in Risperdal marketing probe," Margaret Cronin Fisk, Jef Feeley, David Voreacos, Jan. 6, 2012

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