Amgen Inc. to Pay More Than $762 Million to Resolve Illegal Marketing Allegations
Biotech Giant Guilty of Illegally Introducing Drug into Market for Uses That the FDA Specifically Decliend to Approve
|U.S. Attorney’s Office December 19, 2012|
SEATTLE—American biotechnology giant Amgen Inc. (Amgen) has entered into a settlement with the United States in which it has agreed to pay $762.1 million to resolve criminal and civil liability arising from its misbranding of certain drugs, U.S. Attorney Jenny A. Durkan announced today. A key portion of the case was filed in the Western District of Washington over claims that Amgen provided incomplete information to a drug compendia, about the use of a drug to treat anemia in cancer patients. The qui tam lawsuit, filed in Seattle was unsealed today as part of the settlement. The settlement represents the single largest criminal and civil fraud settlement involving a biotechnology company in U.S. history.
“This sends a powerful message to pharma companies: you must not put profits ahead of patients’ health and doctors’ trust. Drugs should be prescribed because they make people better, not because they make companies money,” said U.S. Attorney Jenny A. Durkan, Western District of Washington. “The coordination by our office, the U.S. Attorney’s Offices in the Eastern District of New York and Massachusetts, and Main Justice also shows that there is no corner of the country where these actors can hide.”
“Instead of working to extend and enhance human lives, Amgen illegally pursued corporate profits while jeopardizing the safety of vulnerable consumers suffering from disease. Americans expect—and the law requires—much more. Amgen’s guilty plea and $762 million penalty demonstrate our vigilance in protecting America’s health care consumers and pursuing any corporation that seeks to profit by violating U.S. law,” said Acting United States Attorney Marshall L. Miller of the Eastern District of New York.
“Today’s resolution reinforces the Department of Justice’s commitment to cracking down on unlawful conduct by pharmaceutical companies,” said Civil Division Principal Deputy Assistant Attorney General Stuart F. Delery. “When drug companies improperly misbrand their products, they not only could put individual patients at risk, but they also undermine the federal health care system that protects all of us.”
As part of the settlement, Amgen pleaded guilty in U.S. District Court for the Eastern District of New York to a single count criminal information of illegally introducing a misbranded drug, Aranesp, into interstate commerce. Aranesp is an erythropoiesis-stimulating agent (ESA) that was approved by the Food and Drug Administration (FDA) at certain doses for certain patient populations suffering from anemia. Under the Food, Drug, and Cosmetics Act, it is illegal for drug companies to misbrand their product by marketing or promoting their drugs for “off-label” uses or doses that were not approved by the FDA. The Seattle case alleged Amgen provided incomplete information to the United States Pharmacopeia’s Drug Index, an important reference book used by physicians and insurance payers, in an effort to increase its market share. Amgen illegally misbranded Aranesp by promoting it for “off-label” doses that the FDA specifically rejected and for an “off-label” treatment that the FDA never approved. For example, Amgen illegally promoted Aranesp to treat anemia caused by cancer, irrespective of whether the patient had been prescribed chemotherapy—a use for which Aranesp was never approved. In fact, in 2007, the FDA mandated that a “black box” warning be added to Aranesp’s label stating that when administered to certain target levels Aranesp “increased the risk of death” in patients with cancer who were not receiving chemotherapy or radiation. Under the terms of the criminal plea agreement, Amgen will pay a criminal fine of $136 million and criminal forfeiture in the amount of $14 million.
On the civil side, Amgen agreed to pay $612.1 million dollars ($587.2 million to the United States and $24.9 million to the states) to resolve claims that it caused false claims to be submitted to Medicare, Medicaid, and other government health care programs. The federal civil settlement agreement encompasses allegations that Amgen: (1) promoted Aranesp and two other drugs that it manufactured, Enbrel and Neulasta, for “off-label” uses and doses that were not approved by the FDA and not properly reimbursable by federal health care programs; (2) offered illegal kickbacks to a wide range of entities in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal health care programs or were medically necessary; and (3) engaged in false price reporting practices involving several of its drugs. As part of the global settlement, Amgen also agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General.
The five-year CIA includes provisions designed to increase accountability of individuals and Board members, to increase transparency and to strengthen Amgen’s compliance program. The CIA requires that a committee of Amgen’s board of directors annually review the effectiveness of the company’s compliance program and that executives in key areas certify to compliance. The CIA requires that Amgen post on its company website information about payments to doctors. Under the CIA, Amgen must also establish and/or maintain a centralized risk assessment and mitigation program and policies relating to research, publications, and Amgen’s interactions with federal payors. Amgen is subject to exclusion from federal health care programs for a material breach of the CIA and subject to monetary penalties for less significant breaches.
The civil settlement resolves 10 lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. The 10 cases are: The 10 cases are: United States ex rel. Cantor v. Amgen Inc., Civil Action No. CV-04-2511 (E.D.N.Y.); United States ex rel. Osiecki v. Amgen Inc., Civil Action No. CV-05-5025 (E.D.N.Y.); United States ex rel. Westmoreland v. Amgen Inc., Civil Action No. 06-CV-10972 (D. Mass.); United States ex rel. Arriazola v. Amgen Inc., Civil Action No. CV 06-3232 (E.D.N.Y.); United States ex rel. Horwitz v. Amgen Inc., Civil Action No. C07-0248 (W.D. Wash.); United States ex rel. Kelly v. Amgen Corporation, Civil Action No. CV-08-4157 (E.D.N.Y.); United States ex rel. Hanks v. Amgen Inc., Civil Action No. CV 08-3096 (E.D.N.Y.); United States ex rel. Ferrante v. Amgen Inc., Civil Action No. CV-08-3931 (E.D.N.Y.); United States ex rel. Tucker v. Amgen Inc., Civil Action No. CV-09-0887 (E.D.N.Y.); and United States ex rel. DJAE Partnership v. Amgen Inc., Civil Action No. 11-CV- 11242 (D. Mass.).
The U.S. Attorney’s Offices for the Western District of Washington and the Eastern District of New York and the Justice Department’s Consumer Protection Branch prosecuted the criminal case. The U.S. Attorney’s Offices for the Western District of Washington, the Eastern District of New York, the District of Massachusetts, and the Justice Department’s Civil Division handled the civil settlement. This matter was investigated by the FDA-Office of Criminal Investigation; the Federal Bureau of Investigation; the Health and Human Services-Office of Inspector General; the Office of Personnel Management-Office of Inspector General; the Department of Veterans Affairs-Office of Inspector General; the Defense Criminal Investigative Service; the Railroad Retirement Board; the National Association of Medicaid Control Fraud Units; and the offices of various state attorneys general.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.9 billion.
In the Western District of Washington, Assistant United States Attorneys Susan Loitz, Peter Winn, and Harold Malkin handled the litigation. Press contact for the U.S. Attorney’s Office is Emily Langlie (206) 553-4110 or Emily.Langlie@usdoj.gov.