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Business Litigation: New Jersey to get part of drug settlement

Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson based in Mercer County, New Jersey, has settled a lawsuit filed against it by 37 states. The lawsuit alleges that Janssen Pharmaceuticals marketed anti-psychotic drugs for uses that were not approved for by the U.S. Food and Drug Administration. For Janssen Pharmaceuticals, this business litigation was best dealt with through a settlement.

Janssen Pharmaceuticals markets medications known as Risperdal, Risperdal Consta, Risperdal M-Tab and Invega to doctors and other health care professionals. According to the lawsuit, Jansenn Pharmaceuticals was promoting their products for what are called "off-label uses" that doctors can prescribe the medications for on their own. Instead of continuing the costly and time consuming litigation, Janssen Pharmaceuticals apparently made a business decision to settle the lawsuit instead of gambling with the company's finances and reputation, which may have been damaged even if the company would have prevailed at trial.

The settlement is for $181 million, to be divided amongst the 37 states involved. New Jersey will reportedly receive $5.3 million of that amount. In addition to the monetary component of the settlement, Janssen Pharmaceuticals has also agreed to several other conditions that are aimed at correcting any alleged misrepresentations the lawsuit alleges Janssen made about the medications.

Settling business litigation like Janssen Pharmaceuticals has can save a business millions of dollars in the long run. To continue this type of litigation could end up costing a company more than money, and the decision to settle is typically made after a careful review of all of the important factors.

The reputation of a company is a good part of its goodwill, and the longer litigation continues, the more damaged a company's reputation can become, even in circumstances where the company might prevail at trial. By making the informed decision to settle a lawsuit, a company has the opportunity to move beyond the issue as quickly as possible in order to rebuild any reputation that may have been marred and focus on present and future business goals.

Source: NorthJersey.com, "N.J. to receive $5.3M under 37-state settlement against pharmaceutical company," Harvy Lipman, Aug. 30, 2012

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