This landmark case was the largest False Claims Act recovery of 2018. AmerisourceBergen Corporation (ABC), one of the nation’s largest wholesale drug companies, paid $625 million to settle its civil liability, on top of paying $260 million to resolve its criminal liability, all arising from ABC’s illegal repackaging of cancer supportive injectable drugs contained in vials into pre-filled syringes at an unlicensed facility to profit from the “overfill” contained in the vials.
The combined $885 million settlement is one of the largest pharmaceutical settlements in history. In addition, ABC entered into a Corporate Integrity Agreement with HHS OIG and the unlicensed facility was closed down in 2014 as a result of the investigation.
Our client, Michael Mullen, the first relator to file a qui tam suit against ABC under federal and state False Claims Acts (FCA), was the former chief operating officer of a subsidiary of ABC. He learned that ABC was operating an unlicensed facility that it called a “pharmacy” outside the regulatory oversight of the U.S. Food and Drug Administration (FDA). There, the defendants illegally harvested the extra drug product manufacturers placed in vials of drugs (known as “overfill”). As part of this operation, ABC purchased original vials from their respective manufacturers, broke their sterility, pooled the contents, and repackaged the drugs into pre-filled syringes. The defendants then offered the syringes to physicians at a discount, and patients unwittingly received drugs that had been manipulated in ways resulting in adulteration and contamination. ABC was repackaging drugs commonly used to treat cancer or the side effects of cancer treatments, including Procrit®, Aloxi®, Kytril®, and its generic form granisetron, Anzemet® and Neupogen®.
Relator Mullen’s inside knowledge played an instrumental role in the $625 million civil FCA settlement over false claims submitted to government health care programs for unapproved and adulterated cancer drugs, double-billing from exploiting overfill, and kickbacks to physicians. The claims the physicians submitted to government health care programs for payment for the pre-filled syringes were false or fraudulent under the FCA; ABC’s civil liability to the United States and the States under the FCAs stemmed from the fact that it caused physicians to submit the claims.
His whistleblowing was also critical in the federal government’s criminal investigation of the company, which led to AmerisourceBergen Specialty Group, a wholly-owned subsidiary of ABC, pleading guilty to illegally distributing misbranded drugs and paying $260 million to resolve criminal liability for its distribution of these drugs from a facility that was not registered with the FDA. He provided the government with the first-hand, operational knowledge necessary to detect ABC’s violations of federal and state laws and force the closure of the unlicensed facility.
The federal and state governments awarded a relator’s share of close to $100 million, one of the largest relator share awards under the FCA.