HealthLawProf Blog

Editor: Katharine Van Tassel
Case Western Reserve University School of Law

Thursday, July 28, 2005

Housecleaning, Part II: Johnson & Johnson Being Investigated by Justice Department

According to the N.Y. Times, the Justice Department is looking into Johnson & Johnson's aggressive marketing of Natrecor, a heart-failure treatment.  The US attorney in Massachusetts, Michael J. Sullivan, issued a subpoena requesting information about the sales and marketing of Natrecor.  His office is known for prosecuting health care fraud cases.  In 2003 Johnson & Johnson acquired the maker of Natrecor, Scios, for $2.4 billion.  Sales of Natrecor are projected to be $700 million for 2005, nearly double what they were last year. 

The article reports that Johnson & Johnson has been "criticized by some prominent cardiologists for encouraging widespread and frequent use of intravenous Natrecor therapy in outpatient clinics, one or more times a weeks for some patients, even though the FDA has approved the drug only for acutely ill hospitalized patients."  It is illegal for companies to promote and market off-label or non-approved uses of a drug even though it is legal for doctors to administer drugs for off label uses.  Johnson & Johnson has been accused of violating this rule by actively promoting the outpatient use of Natrecor.  Due partially to outpatient use, Natrecor has been very profitable to Johnson & Johnson and cardiologists (who bill hundreds of dollars for each infusion).   The N.Y. Times reports that 80 percent of the patients receiving Natrecor are covered by Medicare. 

An editorial in the New England Journal of Medicine by Dr. Eric Topol, the chairman of the cardiovascular medicine at the Cleveland Clinic, accuses the Scios unit of actively encouraging physicians to open their own infusion centers to bill Medicare for this treatment.  He says that company documents instructed doctors to bill Medicare $408 for eight hours of observation during the infusion, above and beyond the actual cost of the drug, which is around $500 per vial.  He claims that other heart-failure drugs, which cost less than $10 a dose, are equally as effective.   There are also concerns about the safety of Natrecor and how it's used.  According to an article in HealthDay, Dr. Topol states that Johnson & Johnson continues to aggressively market Natrecor even though it is being linked to kidney failure and death.  He says:

It's a pattern.  We saw it with Vioxx and some of the cox-2 inhibitor drugs, and we're seeing it now with Natrecor. . . . The twist here is that the aggressive marketing is through the medical community.  With other drugs, it's direct-to-consumer advertising.  We have the themes of manuscripts published in prestigious journals with key omissions f data, the FDA approving drugs without mandating key trials, and companies aggressively pursuing sales and marketing of their drugs. 

The article claims that Scios is encouraging physicians to start their own infusion centers which would be billed to Medicare.  In addition, it has set up a toll-free telephone hotline for "Natrecor Reimbursement Support" and published a 46-page reimbursement and billing guide that provides doctors with specific Medicare billing codes. 

Mark Wolfe, Scios spokesman, argues that "the reimbursement guide was developed to provide hospitals and other medical staff with comprehensive information, not selective information, to accurately code a patient's condition under Medicare requirements." 

One of the problems cited in the article is the lack of enforcement capability by the FDA. 

Lindley Bain was instrumental in pulling this post together.  [tm]

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