Scios To Plead Guilty, Pay $85 Million For Off-Label Marketing Of Natrecor

SAN FRANCISCO -- The Scios Inc. subsidiary of Johnson & Johnson has agreed to plead guilty to a misdemeanor charge related to the off-label marketing of its Natrecor heart drug, to pay an $85 million fine and to serve three years' organizational probation, according to a brief filed Sept. 14 in a California federal court (United States of America v. Scios, Inc., No. 11-cr-461, N.D. Calif., San Francisco Div.).

The plea agreement does not foreclose government prosecution of false claims allegations against Scios and Johnson & Johnson in the U.S. District Court for the Northern District of California (United States of America, ex rel. Strom v. Scios, Inc., and Johnson & Johnson, No. 05-cv-3004, N.D. Calif.). 

On July 7, the U.S. attorney for the Northern District of California filed a misdemeanor charge against Scios in the District Court.  On Sept. 14, the U.S. Attorney's Office filed a memorandum for entry of plea and sentencing, which references a plea agreement that it says was filed in camera. 

According to the brief, the federal government agrees not to criminally prosecute Scios or Johnson & Johnson for other offenses under the Food, Drug and Cosmetic Act. 

According to the government, Natrecor was approved in August 2001 for the treatment of patients experiencing acutely decompensated heart failure (ADHF) with dyspnea (shortness of breath).  The government says some patients with congestive heart failure experience ADHF.  The government says that between August 2001 and April 2003, Scios promoted the off-label use of Natrecor for patients with congestive heart failure. 

The government says the $85 million fine "is derived from the defendant's pecuniary gain from the offense." 

The government says Scios no longer actively markets Natrecor for any use and no longer markets any drugs.  The government further says the time and difficulty in trying to identify victims of Scios' crime and get restitution for them would outweigh the need to provide restitution under federal law.  It says it is unaware of any reports of patients who suffered physical harm from the off-label promotion of Natrecor. 

The government notes that if it is successful in its False Claims Act lawsuit, it is entitled to treble damages for federally funded programs such as Medicare and Medicaid. 

[Editor's Note:  Full coverage will be in the Oct. 6 issue of Mealey's Emerging Drugs & Devices.  In the meantime, the plea memorandum is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Document #28-111006-001P.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.] 

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