March 10, 2012 / 12:27 AM / in 6 years

Government nixes tentative $1 billion settlement with J&J: WSJ

(Reuters) - Federal prosecutors in Washington, D.C. have nixed a tentative $1 billion settlement with Johnson & Johnson, holding out for a bigger settlement with the drugmaker for alleged improper marketing of its Risperdal schizophrenia drug, the Wall Street Journal said.

Products made by Johnson & Johnson for sale on a store shelf in Westminster, Colorado April 14, 2009. REUTERS/Rick Wilking

The report, citing sources familiar with the situation, said Department of Justice prosecutors in Washington rejected a proposed settlement worked out about two months ago between J&J and federal prosecutors in Philadelphia, and that the deal must now be renegotiated.

Officials in the Justice Department’s criminal division could not be reached immediately for comment. J&J declined to comment.

The Department of Justice for years has been investigating the diversified healthcare company for alleged marketing of the anti-psychotic drug for unapproved uses, including for nursing home residents.

Individual states are also pressing similar allegations against J&J. The company in January said it will pay $158 million to settle a Texas lawsuit that accused it of improperly selling the drug to state residents on the Medicaid health program for the poor, including children.

That settlement fully resolved claims in Texas, J&J said, but does not affect other ongoing state or federal Risperdal litigation.

Reporting By Ransdell Pierson; editing by Carol Bishopric

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