DOJ Plans To Intervene In Two Qui Tam Actions Against Scios
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Kaiser Family Foundation reports the intervention of two qui tam civil False Claims Act actions. The qui tam actions involve the off-label marketing of medication unapproved for certain usages. The medication in question is Natrecor, a heart failure medication. There are two qui tam actions against Scios, a subsidiary of Johnson and Johnson. Kaiser states:
The Department of Justice on Thursday announced plans to join two whistleblower lawsuits filed against Johnson & Johnson subsidiary Scios over allegations that the company illegally marketed the heart failure medication Natrecor for unapproved uses and defrauded Medicare and other federal health care programs, the San Francisco Chronicle reports. FDA in 2001 approved Natrecor for use in hospital patients who experienced shortness of breath caused by acute congestive heart failure (Egelko, San Francisco Chronicle, 2/20).
In 2008, the DOJ recovered millions of federal dollars from fraud settlements and judgments. Specifically, in 2008 the DOJ recovered $258 Million from Cephalon Inc. for off-label marketing unapproved drugs through multiple qui tam lawsuits. This was one of 228 health law related qui tam cases brought in 2008. The total amount of settlements and judgments in 2008 totaled $1 Billion, including the qui tam relator shares.
The Scios cases and the Cephalon cases show the DOJ’s heightened investigation of the pharmaceutical industry. The DOJ reports:
The Civil Division’s investigation of the pharmaceutical industry is part of a Department-wide effort. Typical allegations include “off-label” marketing, which is the illegal promotion of drugs or devices that are billed to Medicare and other federal health care programs, for uses that were neither found safe and effective by the Food and Drug Administration nor supported by the medical literature; paying kickbacks to physicians, wholesalers and pharmacies to induce drug or device purchases; establishing inflated drug prices knowing that federal health care programs use these prices to reimburse providers, then marketing the “spread” between the federal reimbursement and the provider’s lower cost to induce drug purchases; and knowingly failing to report the company’s true “best price” for a drug to reduce rebates owed to the Medicaid program.
The cases against Scios are continuing the trend of potentially large settlements and recoveries of federal money through civil False Claims Act qui tam actions. Given that “Scios and J&J have collected hundreds of millions of dollars in reimbursements from Medicare and other federal health programs for unapproved uses of Natrecor (San Francisco Chronicle, 2/20),” the actions against Scios could lead to the largest settlement or recovery in 2009.
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