A subsidiary of health-supply giant Johnson & Johnson has pleaded guilty to misdemeanor drug misbranding and was ordered to pay an $85 million criminal penalty for illegally promoting regular intravenous use of its heart-failure drug Natrecor.
J&J subsidiary to pay $85 million penalty
A judge in U.S. District Court in San Francisco on Tuesday ordered Scios to pay the fine as part of a negotiated plea deal (PDF), under which the drugmaker admitted that it illegally marketed the drug between 2001 and 2003 by not including instructions for how to administer Natrecor for the use approved by the Food and Drug Administration.
A statement from Sunnyvale, Calif.-based Scios said the company admits guilt but denies knowingly misbranding the drug. Typically, misdemeanor violations of the Food, Drug and Cosmetic Act do not involve intent to commit a crime, court records filed by government officials in the case say.
“This criminal plea by a major pharmaceutical company and the significant criminal fine imposed demonstrate the Justice Department’s commitment to fighting healthcare fraud wherever we find it,” said Tony West, assistant attorney general the Justice Department’s Civil Division, in a written statement.
The plea leaves unresolved a parallel civil lawsuit filed in federal court by a former employee, and intervened in by the government, accusing both Scios and parent company Johnson & Johnson of causing Medicare and other government programs to be billed for unapproved uses of Natrecor between 2001 and 2005.
Court records in the criminal case say Johnson & Johnson disputes the whistleblower’s claims that the alleged fraud misbranding continued after it acquired the novel-drug maker.
Johnson & Johnson bought Scios in April 2003 for $2.4 billion, less than two years after the FDA approved Natrecor for limited use in acute congestive heart-failure events. The drug was never approved for regular, scheduled doses for nonacute patients, even though that’s how it was widely used, court records say.
Patric Hooper, a founding partner with healthcare compliance and defense firm Hooper, Lundy & Bookman in Los Angeles, said cases like the one facing Scios and Johnson & Johnson are being filed with increasing frequency.
“It’s not unusual, and we expect to see more,” Hooper said. “I don’t think it’s going to be limited to the pharmaceutical industry. It’s more evidence of stepped-up enforcement.”
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