In one of the largest health care fraud settlements in U.S. history, pharmaceutical titan Johnson & Johnson (J&J) will shell out $1.7 billion to resolve legal claims surrounding one of its most popular antipsychotics, Risperdal.

The company faces criminal and civil allegations that it—via subsidiary, Janssen Pharmaceuticals—inappropriately marketed Risperdal as a way to manage anxiety and other psychological symptoms in people with dementia.

The antipsychotic has never received FDA approval to treat dementia behavior, yet from May 1998 until November 2005, Janssen's "ElderCare" sales force was supposedly directed to seek out and promote Risperdal to pharmacies in long term care facilities and doctors with elderly patients, according to a statement by the Department of Justice (DOJ).

During the sales process, representatives were allegedly encouraged to downplay Risperdal's approved function—treating schizophrenia—in favor of endorsing its off-label use as a dementia therapy. Despite repeated warnings from the FDA that such claims were "misleading," company representatives also appeared to gloss over the fact that the drug carries a research-backed warning of increased risk of diabetes, stroke, TIA and overall death in the elderly.

A sales aid developed by Janssen in 2002 contained the patient profile of an older woman named Helen D. The hypothetical Helen had recently been placed in a nursing home and was "feeling deserted and depressed," "agitated and hostile," and "experiencing delusions and hallucinations."

As any caregiver can attest, this description could fit the majority of aging adults who enter nursing homes, especially those with Alzheimer's and other forms of dementia. But, it could also be the description of someone suffering from schizophrenia, the primary condition that Risperdal was approved to treat. However, Janssen sales representatives were not instructed to include the schizophrenia caveat when describing Helen D. to doctors and pharmacies.

The government's complaint also claimed that when Janssen hired doctors to speak at medical conferences, they based the physicians' pay on the number of Risperdal prescriptions they wrote.

So powerful were these practices that nearly 50 percent of people age 65 and older who were prescribed Risperdal in 2003 had been diagnosed with some form of dementia.

The actions of Janssen and J&J, "jeopardized the health and safety of patients and damaged the public trust," according to Attorney General Eric Holder. "These are not victimless crimes. Americans trust that the medications prescribed for their parents and grandparents, for their children, and for themselves are selected because they are in the patient's best interest."

Janssen has pleaded guilty to misbranding Risperdal and, together with J&J, will pay over $1.7 billion to settle the criminal and civil claims involving the drug.

Should someone with Alzheimer's be given antipsychotics?

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Caregivers often wonder whether a loved one with dementia should be given Risperdal or other antipsychotic medications, such as Zyprexa or Seroquel. It's impossible for physicians to come up with a set of hard and fast rules regarding these prescriptions, since their efficacy often varies from person to person.

A report released by the American Academy of Family Physicians found that Risperdone produced "mixed results," Seroquel showed promise, and Zyprexa was "an effective treatment," when it came to managing psychotic and behavioral symptoms in people with dementia.

Ultimately, caregivers and the elderly are advised to thoroughly discuss all medication decisions with their doctor.

Here are some questions to ask your parent's doctor about medications.