April 17, 2013 Healthcare Fraud
Amgen to Pay United States $24.9 Million to Resolve False Claims Act Allegations
A California-based biotechnology company recently agreed to settle a False Claims Act lawsuit for $24.9 million. Amgen Incorporated is accused of paying illegal kickbacks to multiple long-term care facility pharmacy providers in return for switching their Medicare and Medicaid patients over to Amgen’s anti-anemia drug Aranesp.
According to the Department of Justice, Amgen violated the False Claims Act by paying illegal kickbacks to Omnicare Inc., PharMerica Corp. and Kindred Healthcare Inc. The kickbacks were paid according to the volume of Aranesp that was purchased by each pharmacy.
The DOJ initially intervened in this case after a whistleblower came forward and filed a False Claims Act lawsuit. The whistleblower, a former Amgen employee, filed suit in 2011 and alleged that Amgen paid kickbacks in the form of “grants, honoraria, speaker fees and travel” to the employees working at Omnicare, PharMerica and Kindred Healthcare. In return for the kickbacks, each pharmacy allegedly manufactured a “therapeutic interchange” program. The interchange program essentially took nursing home patients off of a competitor’s anti-anemia medication, then switched them over to Amgen’s Aranesp. This process increased the use of Aranesp by leaps and bounds across the country.
In addition to the “therapeutic interchange” program, Amgen allegedly attempted to increase the use of Aranesp by pressuring some pharmacists to recommend the drug to patients who did not medically require it. Pharmaceutical companies are not allowed to promote any medication for off-label use of any kind, nor can they promote the drug for uses which are not medically necessary. Nonetheless, using promotional materials and fraudulent program information, Amgen allegedly pushed pharmacists to prescribe Aranesp to nursing home patients who were not diagnosed with anemia associated with chronic renal failure.
Aranesp is statistically one of Amgen’s best-selling medications. However, sales of the drug have taken a big dip since 2007 due to a string of problems and restrictions on it use. After a series of studies found that high doses of Aranesp could lead to an increased risk of heart attack, stroke, heart failure and tumor growth, the Food and Drug Administration slapped the drug with a black-box warning. Shortly after the black-box warning was issued, a new study in The New England Journal of Medicine raised an additional set of safety concerns about Aranesp. The study discovered that for people diagnosed with diabetes and chronic kidney problems not yet requiring dialysis, Aranesp nearly doubled their risk of stroke.
“By this agreement we are making important strides in holding drug manufacturers accountable for fraudulent and abusive practices not only in South Carolina but nationwide,” said William Nettles, U.S. Attorney for the District of South Carolina. “I am proud of the tireless work of this office to investigate this case across the country.”
In a statement released earlier, Amgen denied the government’s allegations, saying they were related to events in “the early- to mid-2000s.” Despite the timing of the violations, Amgen is no stranger to allegations of this nature. The most recent False Claims Act settlement is actually the second of its kind between Amgen and the DOJ during the last six months. In December 2012, Amgen pled guilty to misdemeanor off-label promotion of Aranesp and was forced to pay $762 million in order to settle civil allegations filed against the company.
In total, there have been five whistleblower lawsuits filed against Amgen related to the marketing and sales of Aransep. In addition to the most recent settlement, two whistleblower suits were previously dismissed Amgen settled another one in December, and one is still pending.
According to the terms of the settlement, Amgen will pay $17.8 million to the federal government and almost $7.1 million to state Medicaid programs.
“We will continue to pursue pharmaceutical companies that pay kickbacks to long-term care pharmacy providers to influence drug prescribing decisions,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Patients in skilled nursing facilities deserve care that is free of improper financial influences.”