The Arkansas Supreme Court on Thursday overturned a $1.2 billion judgment against Johnson & Johnson in a lawsuit challenging the drugmaker's marketing of the antipsychotic drug Risperdal.

The court ruled that the state improperly sued under a law that applies to health care facilities, not pharmaceutical companies.

The ruling comes in an appeal of lawsuit filed by Arkansas against the drugmaker and subsidiary Janssen Pharmaceuticals. The state says the companies didn't properly communicate the drug'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.

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.

Arkansas Attorney General Dustin McDaniel sued the companies in 2007, arguing that they downplayed and concealed risks of the drugs and lied to doctors for years about its side effects. The case is among numerous lawsuits making similar claims.

McDaniel said Thursday that he still believes the Legislature intended the Medicaid fraud law to be applied as he used it in the Risperdal lawsuit.