Scios and Natrecor: An Acute Heart Failure Drug Sold by the Weekly Visit

Scios and Johnson & Johnson agreed to pay $184 million to the federal government to resolve civil allegations that off-label promotion of scheduled Natrecor outpatient infusions caused false claims to federal health care programs. The government said Scios helped doctors open infusion clinics, promoted repeat visits and supplied the resources for billing Medicare. The sales plan reached from the treatment chair to the claim form.

The Department of Justice announced the civil resolution on November 4, 2013. This pharmaceutical fraud case began with a former Scios area manager’s qui tam action, which the government joined. Scios sold Natrecor, the brand name for nesiritide, and became a Johnson & Johnson subsidiary in April 2003.

What Is Considered Off-Label Promotion?

Off-label promotion means marketing an approved drug for a use outside its FDA-approved labeling. In the Natrecor case, the alleged change was from treating an acute episode of severe heart failure to giving chronic heart-failure patients scheduled, repeated infusions.

The Food and Drug Administration approved Natrecor in August 2001 for intravenous treatment of acutely decompensated congestive heart failure in patients with shortness of breath at rest or with minimal activity. The approval study involved hospitalized patients receiving infusions over an average of 36 hours.

According to the government, the outpatient campaign instead promoted four- to six-hour infusions once or twice a week for several weeks or months. The distinction was the patient’s condition and the recurring regimen. A sudden deterioration requiring urgent treatment had become a visit booked on a calendar.

The government’s complaint alleged that Scios understood the difference and taught its sales force how to talk around it:

The word removed from the sales conversation was the condition that narrowed the approved market.

How Scios Built the Outpatient Infusion Market

Scios allegedly helped create the clinics that would administer the repeat treatments. The complaint described grants, startup resources, visits to established clinics and efforts to convert existing infusion businesses to Natrecor.

The commercial attraction was explicit. According to the complaint, the companies estimated in 2003 that outpatient use could generate average revenue of $9,600 per patient, compared with $1,000 in the inpatient setting. Repeat infusions offered repeat sales from the same patient.

A Startup Kit for the Clinic

The government alleged that Scios supplied a Heart Failure Clinic Marketing Resource Kit containing ready-made press releases and other promotional materials. Its Clinical Resource Compendium provided contacts for existing Natrecor clinics, medical supply and equipment companies, and reimbursement consultants. The complaint also alleged that the director of sales told sales management to use Scientific Affairs Managers to help develop new outpatient infusion clinics.

The company allegedly reached practices that already had the equipment and patients, too. Sales representatives targeted clinics using other cardiac infusion drugs, known as inotropes, and received training on converting those clinics to Natrecor.

The Centers of Excellence program offered a working example to copy. According to the complaint, Scios sent doctors and nurses considering an infusion clinic to established Natrecor sites to observe their operations. The government alleged that at least three doctors who visited one such site and later opened clinics each submitted more than $500,000 in Medicare claims for serial outpatient Natrecor infusions.

That sequence gives the clinic visits their significance: the manufacturer introduced practitioners to the business, and the new practices later sent the bills to Medicare.

Paid Speakers and a Registry With a Sales Target

The government alleged that Scios paid health professionals to promote outpatient Natrecor through speeches, publications and continuing medical education. It also alleged that the companies commissioned ghostwritten articles, then selected doctors and nurses to appear as their authors.

According to the complaint, Scios used its ADHERE registries to open conversations with practitioners, distribute favorable data and assess the sales generated after meetings. The complaint quoted a business plan explaining the registry’s assignment:

The alleged commercial purpose connects the registry, the articles and the clinic program. Each helped carry the outpatient pitch beyond a sales representative’s visit.

Where Natrecor Promotion Met Medicare Billing

The government alleged that Scios and Johnson & Johnson supplied the billing support needed to turn outpatient treatments into Medicare claims. They retained the Lash Group to prepare reimbursement guides, staff a hotline and help providers appeal denied claims at Scios’s expense.

The treatment setting explains why those services mattered. Medicare Part B includes drugs not usually self-administered that are furnished as part of a physician’s service. In this case, the government described Natrecor as such a drug and identified both physicians’ offices and hospital outpatient departments as settings for the company’s reimbursement support. The clinic administered the drug and submitted the claim. The manufacturer allegedly helped make both happen.

Scios had obtained an Ambulatory Payment Classification pass-through code for hospital outpatient billing and a J-code for injectable-drug billing. The guides went well beyond naming a code. According to the complaint, they included sample claim forms, medical-necessity letters and appeals, with most of the material devoted to hospital outpatient and physician office billing. Sales representatives received the guides and laminated quick-reference handouts to distribute to providers.

Johnson & Johnson’s alleged role also went beyond ownership. The complaint said its acquisition review identified continued Medicare reimbursement for chronic treatment as essential to outpatient success. The government further alleged that Johnson & Johnson knew of Scios’s reimbursement guide, hotline and website, and approved marketing plans with separate outpatient sales objectives.

The Pilot Study Became an Efficacy Pitch

The government alleged that Scios used FUSION I to promote benefits the study was not designed to establish. The pilot was designed to assess tolerability, rather than determine whether serial infusions worked. Yet Scios publicized claims of longer life expectancy and fewer hospitalizations.

According to the complaint, the later FUSION II trial was designed to test efficacy and was blinded and controlled. Its results, released in 2007, showed no significant benefit from serial outpatient Natrecor infusions compared with standard care. Patients sat through repeat infusions, and taxpayers paid for benefits the later trial failed to show.

The complaint also described an earlier warning. A cardiologist panel convened by the companies recommended against scheduled outpatient infusions because the evidence was insufficient. After receiving its report, Scios sent a 2005 letter to healthcare providers acknowledging that FUSION I’s size, design and findings were an inadequate basis for recommending routine serial infusions.

That gap mattered to payment as well as promotion. The complaint alleged that Scios used FUSION I to press Medicare contractors for coverage. Following a national review, the Centers for Medicare & Medicaid Services denied coverage for the chronic heart-failure use in March 2006. The complaint describes weaknesses in the supporting evidence, including small studies and missing long-term outcome data.

According to the complaint, Scios pitched the doctors and the Medicare contractors.

The Claims at the End of the Campaign

The complaint alleged that the companies caused more than 4,000 providers to submit over 157,641 Medicare claims for serial outpatient Natrecor infusions and ancillary services from 2002 through 2007.

South Bay Cardiovascular Associates illustrates the connection. The complaint described it as a Centers of Excellence site and alleged that a nurse there received company payments for promotional speeches and training. It then identified $3,101,745 in Medicare payments to South Bay for the disputed outpatient infusions. The same clinic appeared as a demonstration site, a source of promotion and a recipient of government payments.

There was a related pattern in Janssen’s Risperdal civil allegations: the Justice Department said sales representatives tied doctors’ speaking payments to increased prescribing. That speaker-payment arrangement used a different incentive. Scios’s alleged program supplied a place to administer the drug and help getting the resulting bills paid.

Scios Natrecor Misbranding Settlement and the Civil Claims

The Justice Department explained that a drug becomes misbranded when its manufacturer intends a new, unapproved use and ships it across state lines for that use. The Natrecor civil agreement addressed the alleged false claims to federal health care programs caused by the outpatient promotion.

The Justice Department announced that the whistleblower would receive $28 million from the federal government’s share of the civil settlements.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Whistleblower cases have mattered across pharmaceutical enforcement. Public Citizen’s 2018 study, Twenty-Seven Years of Pharmaceutical Industry Criminal and Civil Penalties: 1991 Through 2017, found that whistleblower revelations contributed to 54% of federal pharmaceutical settlements during that period. In Natrecor’s case, the person who brought the qui tam action had worked inside the sales organization whose conduct the government later described.

What Evidence Is Needed to Prove Fraud?

We work with you to connect the promoted regimen, the clinic support, the scientific claims and the government bills. The Natrecor complaint makes those connections through business plans, sales training, study presentations, clinic programs and reimbursement materials.

An employee in sales may recognize the change from acute patients to scheduled repeat visits. Someone in medical affairs may know why a tolerability study became an efficacy claim. A clinic or reimbursement employee may recognize the manufacturer’s hand in the claim form or appeal letter. Those different views can explain how the same commercial plan traveled through the business.

For pharmaceutical whistleblowers, the strength is in connecting those views. We examine how the message reached the practitioner, what support made the treatment possible and how the company helped obtain government payment. The evidence can sit across departments even when each employee sees only one part of the program.

You Know How the Infusion Program Works

If you see a manufacturer using sales campaigns, clinic support or reimbursement materials to push unapproved treatments onto Medicare, talk with our whistleblower experts about the program. We build the case with you and bring in pharmaceutical whistleblower lawyers who understand off-label promotion and infusion billing. We stay beside you and put your knowledge of the business to work building your strongest pharmaceutical whistleblower case.