A divided Louisiana Supreme Court has overturned a $330 million judgment against two pharmaceutical companies that state Attorney General James "Buddy" Caldwell accused of improperly marketing a drug.
The state's highest court ruled Tuesday that Caldwell's office failed to prove that Janssen Pharmaceutical or Johnson & Johnson violated a state law by misrepresenting the potential risk of side effects from the use of Risperdal, an anti-psychotic drug.
Following a jury's verdict against the companies, a state judge entered a judgment awarding more than $257 million in civil penalties, plus $70 million in attorneys' fees and $3 million in costs. A state appeals court later upheld the judgment.
A spokeswoman for Caldwell's office said it will review Tuesday's ruling before determining any "next steps."
Three of the state Supreme Court's seven justices dissented from the majority's opinion.
The majority's decision says Caldwell's office failed to prove that the companies violated provisions of the Louisiana Medical Assistance Programs Integrity Law. The justices concluded there is no evidence that the companies made or tried to make a fraudulent claim for payment through any of the programs.
"The purpose of (the law) is to prevent false or fraudulent claims from being presented to and paid by the medical assistance programs," Justice Greg Guidry wrote. "Thus, there must be a causal link between the misleading marketing statement and a false or fraudulent claim for payment to a healthcare provider or other person to establish liability under (the law)."
In his dissenting opinion, Justice Jefferson Hughes III accused the majority of "writing into the law requirements the legislature did not."
"It is the duty of the legislature, not judges, to make the law," Hughes wrote. "Judges may not like the law, they may even consider it unwise, but they have a duty to apply the law as written. Judicial re-writing of the law to achieve a desired result and overturn a jury verdict is inimical to our system of separated powers."
The attorney general's office sued the two companies in 2004, before Caldwell's tenure. The suit accused the companies of knowingly misrepresenting that Risperdal was safer or more effective than other antipsychotics and of defrauding the Medicaid program.
If the judgment had been upheld by the Supreme Court, the civil penalties would have been split between federal and state government agencies, because Medicaid is a shared cost program.
Gov. Bobby Jindal's chief budget adviser, Commissioner of Administration Kristy Nichols, said Wednesday that the high court's ruling won't cause a shortfall in the state's operating budget.
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