The problem involves allegations that a J&J unit called Scios marketed the heart drug Natrecor for "off label" uses, or for treatment of conditions for which federal regulators have not yet approved the drug. The U.S. Food and Drug Administration approved Natrecor in 2001 for patients experiencing acute heart failure. But according to Law.com, the government could be ready to pursue charges that Scios also marketed the drug for chronic heart problems, for which it didn't have FDA approval.
J&J bought Scios for $2.4 billion in early 2003. Two years later, a formal government health care fraud investigation surrounding the marketing of Natrecor began.
The government hasn't made any final decisions about pursuing charges in the J&J case, writes Law.com's Dan Levine. Lawyers for the company are set to meet Justice Department attorneys in Washington, D.C. next week to persuade them against indicting the New Brunswick, N.J.-based company for off-label marketing, Levine writes. But according to Levine, a criminal charge against the company is under serious consideration.
And Johnson & Johnson may be in for a tough ride. The FDA and Department of Justice have been cracking down on alleged health care fraud recently. Pfizer (PFE), for instance, reached a record $2.3 billion settlement in an "off label" drug marketing case.
It is the marketing campaign of the drug for off-label uses that is the heart of the matter. Doctors are allowed to prescribe drugs for uses not approved by the FDA. In Natrecor's case, doctors apparently began prescribing the drug for patients with chronic heart problems.
But pharmaceutical companies aren't allowed to market their products for off-label uses. But that is apparently what J&J did, Law.com said. The company hired a consultant to put together reimbursement guides that doctors could use to bill Medicare for off-label use, the article said.
In 2005, reports began surfacing that repeated use of the drug caused dangerous side effects, prompting reimbursement changes and a criminal probe, Law.com said.
Lawyers for J&J and the company deny the charges, saying the allegations have no merit, according to Law.com. A call to the J&J was not immediately returned late Thursday.
What can be done to discourage "off label" marketing? Obviously the fines -- $7 billion in fines and penalties since May 2004 -- are regarded by pharmaceuticals as the cost of doing business. If pharmaceuticals faced felony convictions, federal law would prevent the company's drugs from being eligible for state-run health programs and Medicare reimbursement.
But such a blanket exclusion would also deny millions of patients the range of drugs the company offers. And J&J sure has many.