Johnson & Johnson has been fined $1.2bn by an Arkansas circuit court for fraudulent marketing of its antipsychotic drug Risperdal (risperidone).

The judge said the company and its US subsidiary Janssen Pharmaceuticals had lied about the drug’s benefits and risks in order to obtain Medicare reimbursement.

The fine is among the largest ever imposed in a US state fraud case involving a drug company.

J&J, which denies any improper conduct or actual harm, is calling for a retrial.

The judge, Tim Fox, fined the companies $1.19bn for nearly 240,000 violations of the state’s Medicaid fraud law and $11m for violations of its law on deceptive practices.

To date, 11 states have prosecuted J&J over its marketing of Risperdal, which is approved as a treatment for schizophrenia and bipolar disorder in adults and behaviour problems in young people.

Prosecutors have claimed that J&J inaccurately stated Risperdal to be more effective than generic alternatives, while concealing the increased risks of diabetes, stroke and weight gain associated with the drug.

Since reimbursement for Risperdal was available through the state-funded Medicaid system, J&J is accused of defrauding state authorities.

Arkansas attorney general Dustin McDaniel commented that the court’s verdict “sends a clear signal that big drug companies like Johnson & Johnson and Janssen Pharmaceuticals cannot lie to the FDA, patients and doctors in order to defraud Arkansas taxpayers”.

The fine was based on minimum penalties for each individual violation of state law through a prescription or marketing message – coming in this case to over 250,000 violations.

Janssen spokeswoman Teresa Mueller said the company would call for a retrial and, if that was denied, would appeal against the state verdict.

The court “did not show any Arkansas patient was ever harmed by using Risperdal” or “that any Arkansas physician or Arkansas Medicaid was ever misled by the drug’s label or package insert,” she asserted.

In the last year, J&J has reached a $158m settlement with Texas over the marketing of Risperdal and been fined $327m by South Carolina.

At the federal level, the company is in talks with the Justice Department to settle a misdemeanour criminal charge. However, the JoD has rejected a $1bn offer from J&J to settle all outstanding civil charges.

According to the BMJ, GPs are standing “baffled in the wreckage” of the NHS. Qualified blog provider Maxine Vaccine tries to make sense of the ‘clinician-led’ NHS reform that clinicians overwhelmingly reject.

The Government’s NHS reform policy will empower clinicians. It will improve the productivity of a service that has declined severely over the last decade and is performing badly by European standards. It will ensure that healthcare in England remains free. It will reduce bureaucracy, empower patients and ensure better outcomes.

All the above claims, made by Health Secretary Andrew Lansley over the last 18 months, have now been challenged by the major organisations of health professionals and by independent health experts such as the King’s Fund. As the ‘listening exercise’ delivered only minor changes and the NHS reform proceeded according to schedule despite the delays to legislation, the mood of health professionals and the public has soured. The impression has been not of representative democracy but of business deals sewn up behind closed doors, with ‘proposals’ magically becoming a fait accompli.

Here (summarised from a number of sources) is the reality as it is currently understood by the majority of health professionals and health experts:

The Government’s NHS reform policy will force clinicians to accept the control of private healthcare corporations. It will destroy the capability of the NHS as a health service and make it basically the UK equivalent of Medicare. It will severely reduce the availability and reliability of services – following a decade in which the performance of the NHS improved and took steps towards catching up with most of Europe. It will increase bureaucracy and take away the entitlement of patients to free comprehensive healthcare.

What’s not to love, right?

The NHS has been subjected to what Naomi Klein called the ‘shock doctrine’: a sudden and traumatic lesson in the ethos of the free market. All that means is that the Government is behaving like a corporation. For the pharma industry, therefore, the NHS reform programme feels like coming home.

Last month, a doctor and health lecturer writing in the BMJ asked how he could explain to his students how the Health Bill being mostly enacted before it has become law, and that state of affairs being used to railroad the Lords into letting it pass without delay, is not “contempt of Parliament”.

This week, the former vice chair of the Local Commissioning Group in Cambridge, also writing in the BMJ, said that he and his colleagues were now standing “baffled in the wreckage” of a system the Government had promised it would improve.

And the fact that the 2010 Conservative Party manifesto explicitly promised not to impose major structural change on the NHS is such a distant memory that these days, it barely rates a mention.

So what has the Government done? It made a promise it had the clear intention of breaking. It declared a consultation period that was purely for show. It said one thing to its business friends and another to the public. It tried to persuade its employees that massive layoffs were in their best interests.

To put it bluntly, it did everything that a good corporate management team would be expected to do.

Somebody should give them a bonus.

Maxine’s views are not necessarily those of Pharmaceutical Field.

As many as 238,000 pharmaceutical jobs may be lost in a decade in the US if President Obama’s proposed American Jobs Act is introduced, a new report warns.

The Act proposes that manufacturers of prescription drugs would pay rebates to the federal government for medicines used in both the Medicare and Medicaid health schemes and Medicare’s prescription drug benefit, known as Part D.

The report says that mandatory Part D rebates would see jobs cut, increase the cost of medication for the elderly and slow R&D with pharma absorbing the new charges.

This would result, it adds, in reduced payroll employment, reduced profits and possibly higher prices for other buyers.

President Obama introduced the bill in September, but faced stiff opposition from Republicans in the Senate who rejected the measure in the chamber vote.

The Office of Management and Budget (OMB) estimates that if the Act were introduced, the rebates would result in $135 billion paid to the federal government over the next ten years.

The report, published by the American Action Forum, a free-market policy think tank, says that “at a minimum, these additional rebates would constitute a direct, dollar-for-dollar reduction in revenue to the pharmaceutical industry”.

It also forecasts that hundreds of thousands of job losses would come from direct employment within the pharmaceutical industry and indirectly from suppliers.

After the rejection by the Senate, President Obama is now touring the US with the aim to increase support for the Act, which according to some economists, could actually create up two million jobs and see the economic growth by two percentage points.

Andrew Witty, GSK Chief Executive, has said the company is eyeing up new investments in the Indian pharmaceutical market.

In an interview with The Times, Mr Witty outlined plans to purchase assets of up to £2bn as it looks to increase its presence in one of the world’s largest emerging markets.

But Mr Witty ruled out any large-scale takeovers was as the company already has an “enviable” brand in the country.

Glaxo currently employs 5,000 people in India with a turnover in the country of more than £1bn.

The Indian pharmaceutical market in the country was recently reported to reach $55bn a year by 2020. In 2009, the market was worth around $12.9bn.

GSK is not the first company to invest in the Indian market. Sanofi recently announced a deal to acquire Universal Medicare’s over-the-counter unit in the country. India’s The Economic Times also reported that Takeda is in takeover talks with the generic drug manufacturers Cipla and Lupin which are based in the country.

Plans have been published in the US to make $320bn of healthcare savings over the next decade, including $135bn worth of discounts from pharmaceutical companies.

Living Within Our Means and Investing in the Future: The President's Plan for Economic Growth and Deficit Reduction outlines measures to reduce the cost of drugs under the US’ Medicare benefit system.

The proposals call for payment policies for low-income beneficiaries to be aligned with those for Medicaid, the state/federal health programme for around 50 million people on low incomes.

Currently, pharmaceutical companies are required to pay specific rebates for those within the Medicaid scheme. However, sponsors for the Medicare negotiate with pharma to obtain specific rebates.

The report notes that “substantial differences” have been found between the rebates and the net prices paid for brand-name medication under the two programmes – Medicare beneficiaries receive significantly lower discounts and pay higher prices than those using Medicaid.

Under the President’s proposal it “would allow Medicare to benefit from the same rebates that Medicaid receives for brand-name and generic drugs provided to beneficiaries who receive the Medicare Low-Income Subsidy beginning 2013,” the report says.

The plans also propose to ban the ‘pay for delay’ deals between brand-name and generic manufacturers which prevent the release of cheaper alternatives on to the market and to reduce the exclusivity of biologic drugs from 12 years down to seven. It’s also hoped the measures will improve the Independent Payment Advisory Board’s (IPAB) aim to reduce long-term drivers of Medicare cost growth.

The proposals have been sent by the White House for consideration to the Joint Select Committee on Deficit Reduction and are part of measures aiming to reduce the US’ national deficit by $1.5 trillion over the next decade.

Roche has pitched a “middle-ground proposal” to the FDA in the hope of salvaging the use of Avastin only with paclitaxel for the treatment of breast cancer.

The compromise comes weeks after the FDA advisory committee voted in favour of pulling the indication after citing that clinical studies that did not indicate results of prolonged survival or slowing disease progression.

The new proposal includes revised labelling, which would recommend the medicine to those showing “aggressive disease” have few other treatment options available.

Roche also suggests a Risk Evaluation and Mitigation Strategy (REMS) and a Medication Guide to accompany the medicine.

The Swiss-based company is estimated to lose $1bn in annual sales if the FDA removes Avastin’s indication.

Despite the FDA’s opinion, The National Cancer Comprehensive Network has maintained its endorsement of the drug, with Medicare also likely to continue its use in the US.