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LITTLE ROCK, Ark. (AP) -- The Arkansas Supreme Court tossed out a $1.2 billion judgment against Johnson & Johnson on Thursday, reversing a lower court verdict that found the drug maker engaged in fraudulent tactics when marketing the antipsychotic drug Risperdal.

The high court ruled the state's Medicaid fraud law, which formed the basis of Arkansas' lawsuit, regulates health care facilities and that drug manufacturers, including Johnson & Johnson and its subsidiary, Janssen Pharmaceutical Inc., don't fall under its scope.

The state alleged that the companies didn't properly communicate Risperdal's risks and marketed it for off-label use, calling the practices fraudulent.

Johnson & Johnson said there was no fraud and Arkansas' Medicaid program wasn't harmed.

Attorney General Dustin McDaniel said Thursday that he believes the Legislature intended for the Medicaid fraud law to allow lawsuits like the one against Johnson & Johnson.

"I am disappointed that the Court viewed the law differently. Nevertheless, I will keep working to protect consumers against fraud and the kinds of irresponsible and greedy actions shown by Johnson & Johnson and Janssen Pharmaceuticals in their marketing of the drug Risperdal," McDaniel said in a statement released by his office.

Johnson & Johnson issued a statement that included a defense of how Risperdal is used.

"We are pleased that the Arkansas Supreme Court has ruled in our favor, reversing and dismissing the state's claims brought under the Medicaid Fraud False Claims Act, and has also reversed the Deceptive Trade Practices Act claim, remanding it to the court below.

"Janssen remains strongly committed to ethical business practices. Risperdal continues to help patients around the world who suffer from the debilitating effects of schizophrenia and bipolar mania," the companies said in the release.

McDaniel's office said it can't refile the major component of the lawsuit by alleging the companies broke some other law, but it intends to pursue a lesser aspect of it that the state Supreme Court sent back to the lower court. That part of the lawsuit, for which the state was awarded $11 million, claimed that the companies broke the state's deceptive trade practices law.

In a separate ruling, the justices threw out $181 million in fees and costs awarded to the state. Johnson & Johnson argued, among other things, that the award was premature. The high court agreed and sent the fee issue back to Fox's court.

Risperdal and similar antipsychotic drugs have been linked to increased risk of strokes and death in elderly patients, along with seizures, weight gain and diabetes.

Risperdal was introduced in 1994 as a "second-generation" antipsychotic drug - and it earned Johnson & Johnson billions of dollars in sales before generic versions became available. The drug is used to treat schizophrenia, bipolar disorder and irritability in autism patients.

An Arkansas jury found the New Jersey-based companies liable in 2012. Pulaski County Circuit Judge Tim Fox then ordered the companies to pay $5,000 for each of the 240,000 Risperdal prescriptions for which Arkansas' Medicaid program paid during a 3 1/2-year span.

The lawsuit accused the companies of deceptive trade practices and Medicaid fraud and sought repayment for millions paid out by the state's Medicaid program for unnecessary prescriptions. The original lawsuit identified more than 597,000 prescriptions over a 13-year period, but that number was whittled down after challenges from the drug companies during pretrial proceedings.

Fox also fined the companies $2,500 for each of the more than 4,500 letters that Janssen sent to Arkansas doctors that the state said downplayed Risperdal's side effects. That's where the $11 million award was made under the state deceptive trade practices law.

In a separate action brought by the U.S. Department of Justice, Johnson & Johnson agreed in November to pay more than $2.2 billion to federal and state governments and in penalties to resolve criminal and civil allegations that the company promoted powerful psychiatric drugs, including Risperdal, for unapproved uses in children, seniors and disabled patients.

The agreement was the third-largest settlement with a drug maker in U.S. history.

Johnson & Johnson and Janssen are also awaiting a ruling by the South Carolina Supreme Court, where the companies have an appeal pending of a $327 million judgment in a similar case. A $330 million verdict against both companies in Louisiana was overturned in January.

---

Follow Chuck Bartels on Twitter at HTTPS://TWITTER.COM/CBARTELSLIT

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DROUGHT AND MODERATE FLOODING PREDICTED FOR SPRING

Thursday, 20 March 2014 11:15 Published in National News

LOS ANGELES (AP) -- On the first day of spring, there's some bad news for the weather-weary nation.

Dry conditions that have gripped California and the Southwest will continue with little relief. Government forecasters say if the drought persists, it'll likely lead to a busy wildfire season.

Much of the country remains in a deep freeze, delaying the risk of spring flooding into April in the upper Midwest to New England.

While major flooding is not expected, experts say there's a moderate risk of flooding in the southern Great Lakes region because of above-average snowpack.

Below-normal temperatures are expected this spring across the northern U.S. while it's likely to be warmer than usual along the West Coast and across the southern portion of the country.

The federal government released its annual spring outlook Thursday.

© 2014 THE ASSOCIATED PRESS. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED. Learn more about our PRIVACY POLICY andTERMS OF USE.

ARMY GENERAL FINED, REPRIMANDED IN SEX CASE

Thursday, 20 March 2014 11:13 Published in National News

FORT BRAGG, N.C. (AP) — An Army general who carried on a three-year affair with a captain and had two other inappropriate relationships with subordinates was reprimanded and docked $20,000 in pay Thursday, avoiding jail time in one of the military's most closely watched courts-martial.

Brig. Gen. Jeffrey A. Sinclair, the former deputy commander of the storied 82nd Airborne Division, was believed to be the highest-ranking U.S. military officer ever court-martialed on sexual assault charges. But earlier this week those charges were dropped when he pleaded guilty to inappropriate relationships by asking the women for nude pictures and exchanging sexually explicit email with them.

Sinclair, 51, smiled and hugged his two lawyers in the courtroom. Outside the building, he made a brief statement.

"The system worked. I've always been proud of my Army," said Sinclair, whose attorney said he plans to retire. "All I want to do now is go north and hug my kids and my wife."

The case unfolded with the Pentagon under heavy pressure to confront what it has called an epidemic of rape and other sexual misconduct in the ranks.

As part of the plea deal, Sinclair's sentence could not exceed terms in a sealed agreement between defense lawyers and military attorneys. The agreement, unsealed Thursday, called for Sinclair to serve no more than 18 months in jail, but Col. James Pohl's punishment was much lighter.

The judge did not explain specifically how he came to the sentence and prosecutors did not immediately comment. Capt. Cassie L. Fowler, the military lawyer assigned to represent the accuser's interests, had a grim expression after the sentence was imposed and declined to comment.

Sinclair's fine breaks down to $5,000 a month for four months. He earns about $12,000 a month, according to testimony earlier in the week.

Retired Lt. Col. Gary D. Solis, who teaches law at West Point and Georgetown University, called Pohl's ruling lenient.

"I can't believe it," said Solis, who served 26 years of active duty in the Marine Corps and tried hundreds of cases as a military judge. "I know Judge Pohl to be one of the best judges in the Army judicial system, but ... this is an individual who should not be a general officer. He should have gone to jail and dismissed from the Army."

Sinclair will now go before Fort Bragg commander Maj. Gen. Clarence K.K. Chinn, who approved Sinclair's plea deal, and he'll get either a verbal or written reprimand. Then he'll appear before a board to determine whether he will lose any rank, which could cost him hundreds of thousands of dollars in benefits.

The defense calculated that if Sinclair were allowed to retire and be demoted by two ranks, he would lose $831,000 in retirement benefits by age 82.

In closing arguments, prosecutors argued Sinclair should be thrown out of the Army and lose his military benefits, while the defense said that would harm his innocent wife and children the most. Prosecutors did not ask the judge to send Sinclair to jail, even though the maximum penalty he faced on the charges to which he pleaded guilty was more than 20 years.

The judge could have dismissed Sinclair from the Army, which would have likely wiped out his Veterans Administration health care and military retirement benefits.

Prosecutors and defense attorneys offered contrasting arguments about the seriousness of the misdeeds that felled the general.

"It's not just one mistake. Not just one lapse in judgment. It was repeated," prosecutor Maj. Rebecca DiMuro said. "They are not mistakes. We are not in the court of criminal mistakes. These are crimes."

The general also pleaded guilty to adultery and using his government-issued credit card to pay for trips to see his mistress and other conduct unbecoming an officer.

In the charges that were dropped as part of the plea deal, Sinclair had been accused of twice forcing the female captain to perform oral sex during their affair.

The Army's case against Sinclair started to crumble as questions arose about his primary accuser's credibility and whether military officials improperly rejected a previous plea deal because of political concerns.

A military lawyer representing Sinclair argued that his wife, Rebecca, had made a significant investment in the Army by holding leadership positions in organizations that helped soldiers' families. Maj. Sean Foster said Rebecca Sinclair and the couple's two sons would be hurt the most if the general lost benefits.

Sinclair's wife hasn't been present during the court proceedings and was not there Thursday.

When a letter from his wife was read aloud, Sinclair buried his head in his hands, appeared to cry and dabbed his eyes with tissues.

In the letter, Rebecca Sinclair said she hasn't fully forgiven her husband but that she didn't want the Army to punish him and his family further with a significant reduction to his pension and other benefits.

"Believe me when I tell you that the public humiliation and vilification he has endured are nothing compared to the private suffering and guilt that he lives with every day," she wrote.

Sen. Kirsten Gillibrand, D-N.Y., called the case a strong argument for her recent unsuccessful effort to strip commanders of the authority to prosecute cases and give that power to seasoned military lawyers.

"This case has illustrated a military justice system in dire need of independence from the chain of command," Gillibrand said in a statement. "It's not only the right thing to do for our men and women in uniform, but would also mitigate issues of undue command influence that we have seen in many trials over the last year."

Gillibrand is expected to renew her effort to change military law this spring when the Senate begins work on a defense policy bill.

___

Biesecker reported from Raleigh, N.C.

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