It has been reported that Johnson & Johnson's bid to settle alleged claims of illegal marketing of the antipsychotic blockbuster Risperdal, which could cost the healthcare giant for about $1 billion, has been scuppered by the US Department of Justice.

The Wall Street Journal claims that a tentative deal between J&J and federal prosecutors in Philadelphia was reached a couple of months ago regarding its marketing practices for Risperdal (risperidone) and another schizophrenia drug, Invega (paliperidone). The firm has been under investigation since 2004, specifically over claims Risperdal was safer than other antipsychotics, such as AstraZeneca's Seroquel (quetiapine) and Eli Lilly's Zyprexa (olanzapine); the firm was also accused of minimising the risk of diabetes associated with the treatment.

However the WSJ says that the DoJ in Washington DC, which has to approve any deal, have rejected it within the past two weeks. It claims that the latter is seeking a settlement of around $1.4 billion, the sum Lilly agreed to in 2009 to resolve allegations of improper promotion of Zyprexa.

The newspaper goes on to say J&J has resisted paying that amount. It quotes Shelley Slade, a former DoJ healthcare fraud lawyer who now represents whistleblowers suing drugmakers, as saying that "for things to get so far down the road where there is what I would say is a handshake deal" is "highly unusual".

In January, J&J agreed to pay $158 million to settle a lawsuit in Texas which claimed the firm and its Janssen unit defrauded the state's Medicaid programme through illegal promotion of Risperdal.