NY AG Announces $612 Million Settlement With Biotech Firm For Illegal Off-Label Drug Marketing Schemes

New York, NY (WorkersCompensation.com) - Attorney General Eric T. Schneiderman today announced that New York, along with 49 other states, the District of Columbia and the federal government, reached a $612 million agreement with biotechnology giant Amgen Inc. The agreement settles charges that Amgen engaged in various illegal marketing practices to promote sales of several drugs for unapproved uses, including treating kidney disease and cancer. The company also inaccurately reported and manipulated prices for the drugs, Aranesp, Enbrel, Epogen, Neulasta, Neupogen and Sensipar. Besides kickbacks paid to health care professionals, this scheme also caused the submission of false claims by doctors for reimbursement from Medicaid and Medicare and other federal health care programs. The alleged illegal marketing ran from 2001 to 2011.

“There are no excuses for illegally marketing off label drugs, offering kickbacks to health care professionals and ripping off the taxpayers by defrauding Medicaid and other programs," said Attorney General Schneiderman. "With this settlement the message we are sending is clear: biotechnology giants are not above the law and my office will continue to ensure that prescriptions be written based on medical judgment—not profit motive.”

Amgen will pay the states and the federal government a total of $612 million in civil damages and penalties to compensate Medicaid, Medicare and various federal healthcare programs for harm suffered as a result of its conduct. New York led the National Association of Medicaid Fraud Control Unit Team representing the states. The other states represented on the team were from California, Illinois, Indiana, North Carolina and Massachusetts. New York State will receive $12.5 million of these monies under the agreement.

A multi-national corporation headquartered in Thousand Oaks, Calif., Amgen will pay an additional $150 million in fines and forfeitures to federal authorities for criminal conduct. In addition, Amgen pleaded guilty today to a misdemeanor charge in the United States District Court for the Eastern District of New York, in Brooklyn, for introducing a misbranded drug into interstate commerce.

Acting United States Attorney Marshall L. Miller of the Eastern District of New Yorksaid, “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. Today'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. To all who might consider introducing misbranded drugs into the marketplace, you are on notice: we remain steadfastly committed to prosecuting such violations of law.”

According to settlement papers, Aranesp, which was approved by the Food and Drug Administration for stimulating red blood cell production in anemia patients, was illegally marketed and prescribed to patients suffering from anemia, cancer and kidney diseases and at doses larger and less frequent than approved by the FDA.

While the bulk of the settlement proceeds deals with Amgen's conduct related to the drug Aranesp, the government also investigated Amgen's practices involving other pharmaceuticals concerning both Amgen's pricing and marketing activities.

The settlement resolves claims that the following drugs were also marketed off label:

Enbrel is approved by the FDA only for the treatment of severe psoriasis. It is alleged that Amgen also promoted it as a drug for mild psoriasis and at a dosing regimen not approved by the FDA. In addition, the company allegedly made unsupported or insufficiently supported claims regarding Enbrel's safety and superiority for the treatment of the more severe plaque psoriasis.

Neulasta, which is approved to promote the production of white blood cells, was marketed at dosing regimens not approved by the FDA for treating cancer patients suffering from infection.

In addition to the off label marketing, this settlement resolves allegations that Amgen in violation of the federal anti-kickback statute and other state laws, improperly influenced medical professionals by offering price concessions, improper rebates, improper bundling of products and other inducements for the following drugs (in addition to Aranesp, Enbrel and Neulasta): Epogen, which is approved for patients with chronic kidney disease who have lower-than-normal red blood cell counts; Neupogen, which is used for treating a common side effect of chemotherapy, neutropenia; and Sensipar, which is approved as a drug to lower calcium in the blood. The failure to report these improper rebates, improper bundling and other inducements, violated the Medicaid Rebate Statue.

As a condition of the settlement, Amgen will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company's future marketing and sales practices.

This settlement arose out of allegations in nine whistleblower lawsuits filed in United States District Courts in Massachusetts, Brooklyn and the Western District of Washington under state and federal false claims statutes. Eighteen States intervened in the qui tam action filed in the District of Massachusetts. As part of the settlement, the State of New York will receive $12,541,138.01 in restitution and other recovery. While the Attorney General thanks those whistleblowers who brought all the actions, the Attorney General specifically thanks relator Kassie Westmoreland and her counsel for their assistance in litigating this matter in the District of Massachusetts.

This matter was handled by Special Assistant Attorney General Jay Speers, Counsel for the New York Medicaid Fraud Control Unit, Special Assistant Attorneys General Carolyn T. Ellis, Christopher Y. Miller, and Laura Meehan; Assistant Chief Auditor Michael LaCasse; Associate Special Auditor/Investigator Meghan Collins; Associate Auditor/Investigator Karin Flynn; Associate Special Auditor Investigator Matthew Tandle; Computer Programmer Analyst Nicholas Furnari; Investigators Wayne Rivers, Carlos Miranda, Ken Deis, Lisa McDonald and James Zablonski; all under the supervision of Deputy Attorney General Monica Hickey-Martin and Executive Deputy Attorney General Kelly Donovan.

In addition to the Medicaid Fraud Control Unit, Richard Dearing, Deputy Solicitor General, and Steven Wu, Special Counsel to the Solicitor General, of the Attorney General's Division of Appeals and Opinions, worked with the MFCU in the appeal of one of the qui tam matters under the supervision of Solicitor General Barbara D. Underwood.

A copy of today's settlement can be found here: www.ag.ny.gov/sites/default/files/press-releases/2012/DOC.PDF

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