Amgen has agreed to pay $762 million to settle a whistleblower lawsuit and criminal charges this week, which allege that the drug maker illegally promoted their anemia medications Aranesp and Epogen.Â
The settlement and plea agreement includes a $150 million criminal penalty, with the remainder of the money used to settle 10 different lawsuits.
The U.S. attorney’s office in charge of the case secured the deal in federal court in Brooklyn, New York on Tuesday. The deal includes a $612 million civil settlement, $136 million in criminal fines and a $14 million criminal forfeiture payment.
The company will also enter into a five-year corporate integrity agreement requiring that the company will meet federal regulations or executives and members of its board will be held directly responsible by the government.
Amgen Allegedly Offered Illegal Deals to Doctors
Aranesp (darbepoetin alfa) andÂ Epogen (Epoetin alfa) are prescribed to patients with kidney disease, anemia, HIV and cancer to stimulate bones to increase the production of red blood cells. They are also prescribed to patients preparing to undergo major non-heart surgery to reduce the number of transfusions such patients must receive. In 2008, Aranesp sales were $3.1 billion.
According to a Washington Post report in July, Amgen allegedly encouraged doctors to use the drugs by overfilling vials by as much as 25 percent, and offered discounts to doctors who used the drugs in large volume. This allowed doctors to take advantage of what is known as the â€śspread,â€ť the difference between the price they paid for the drugs and the price they charged patients.
Lobbyists were also employed to help, getting Congress and Medicare officials to sign off on a pricing structure that allowed doctors and hospitals to be reimbursed for more than they actually paid for the drugs.
The Medicare Payment Advisory Commission estimates that the overpayments reached as high as 30%. Some doctors made as much as $300,000 a year off of the drugs alone, while helping Amgen generate huge profits.
This week’s settlement means that the plaintiffs who brought the 10 whistleblower lawsuits will receive a percentage of the civil settlement money collected by the government. Under the qui tam provision of the False Claims Act, whistleblowers who report a false claim against the government may be entitled to receive a portion of any money that the government recovers. In return, the whistleblower must be the first to bring the case to the governmentâ€™s attention, and must not publicize the claim until the Justice Department decides to prosecute the claim.