The Scios unit of Johnson & Johnson Scios has agreed to pay an $85 million fine and pleaded guilty to a msidemeanor for misbranding the Natrecor acute heart failure drug. The drugmaker was accused of providing labeling that “lacked adequate directions for use” between 2001 and 2005 (read the plea agreementhere).
The move comes two years after prosecutors began considering whether to indict J&J over Natrecor marketing. At the time, there was speculation that J&J could face a felony conviction that could have resulted in excluding the unit doing business with Medicare and Medicaid.
The feds grew interested after a former Scios employee filed a whistleblower lawsuit accusing Scios execs of conducting a campaign to promote Natrecor for chronic heart conditions. The suit claimed sales reps were instructed to discuss benefits with docs, seminars were created to discuss off-label benefits and a consultant was hired to create reimbursement guides for billing Medicare for off-label use.
Separately, reports surfaced in 2005 that repeated use of the drug caused dangerous side effects, prompting Medicare to cease reimbursement for Natrecor outside hospitals. The Justice Department, meanwhile, initiated a criminal probe and joined the whistleblower lawsuit. However, the suit was dismissed two years ago, although without prejudice, indicating further action could be taken.
The fine is considerably more than the $200,000 that court documents indicated earlier this year might have been levied. The plea agreement, by the way, does not waive or release any of the claims asserted by the US in a pending False Claims Act case against Scios and Johnson & Johnson relating to Natrecor marketing and sales. You can read the whistleblower lawsuit here.
benjamins pic thx to amagill on flickr