J&J subsidiary Ortho Biotech (search), which sells Procrit, is cooperating with the order from the Office of Inspector General of the Department of Health and Human Services (search), the company said late Friday.
Increased competition has hurt sales of Procrit and the version sold in other countries, Eprex. Sales of those two drugs have been sliding, and fell 14 percent to $875 million in the quarter ending in June. They combined for about $4 billion in 2003 sales.
The drug is manufactured by Amgen Inc. (AMGN) and sold by J&J's Ortho Biotech under a licensing agreement.
Amgen has been cutting the price for its own anemia product, Epogen (search), which competes with Procrit, New Brunswick-based J&J has said. Amgen's Aranesp (search), a longer-acting anemia treatment, also has cut into Procrit sales.
Procrit reduces anemia by helping the body produce more red blood cells, which makes the kidneys more efficient. If left untreated, anemia can hasten kidney failure and cause congestive heart failure.
Most large drug makers, including several J&J units, have been subpoenaed in recent years over sales and marketing practices as federal authorities attempt to determine if government programs have been overcharged for prescription medications.