In the single largest criminal and civil fraud settlement against a biotechnology company, Amgen Inc. pled guilty to illegally introducing a misbranded drug (Aranesp®) into interstate commerce, paid $150 million in criminal fines and forfeitures, and paid $612 million to resolve claims brought by our client (and other whistleblowers) under the federal and state False Claims Act, for a combined total recovery of $762 million.
Our whistleblower client’s case centered around allegations that Amgen, in manufacturing single use vials of its drug Aranesp, had intentionally manipulated the amount of “overfill” to increase the vial volume beyond that needed to ensure delivery of the labeled dosage. Amgen then encouraged doctors to bill Medicare and Medicaid for the overfill, which typically was more than the indicated or prescribed dose, and thereby increase their reimbursement from government insurers. By providing extra Aranesp in every vial and encouraging doctors to bill insurers – including Medicare and Medicaid and other government programs– for that overfill, Amgen presented an economic inducement for doctors to purchase Aranesp rather than the competing drug Procrit. This scheme constituted a kickback funded unknowingly by the government, and increased Aranesp’s market share and profits. This kind of economic inducement, designed to alter a physician’s medical judgment, violates the federal and Anti‐Kickback laws.
The qui tam case was unsealed by the court in 2009, at which time several States intervened. However, the United States indicated it was “not intervening at that time” but was nevertheless continuing its civil and criminal investigation of the company, an investigation which ultimately resulted in the record settlement. But, this meant that relator and her legal team had to “carry the ball” as the government prosecutors continued to investigate.
The relator, with the assistance of her attorneys, alleged that Amgen (and co-defendant International Nephrology Network (“INN”), a subsidiary of AmerisourceBergen Corporation), had systematically promoted “overfill billing” in order to change doctors’ prescribing patterns. During discovery, documents and deposition testimony confirmed that Amgen, in conspiracy with INN, had used overfill to entice physicians to choose Aranesp based on the promise of increased Medicare and Medicaid reimbursement for the overfill. Five Amgen employees at different levels of the company – from sales representative to National Sales Director – elected to stand on their Fifth Amendment rights against self‐incrimination rather than provide any testimony regarding these practices at Amgen. (When witnesses assert the Fifth in a civil case, a presumption arises that the testimony would be adverse to the party whose interests are aligned with the witnesses.)
After over two years of intense litigation in the trial and appellate courts resulting in four published federal court opinions, the case was scheduled to go to trial in the United States District Court in Boston on October 17, 2011. Just prior to trial, Amgen reached agreement with the United States and the States for a global $762 million criminal and civil settlement. The settlement resolved relator’s case on the eve of trial, as well as other whistleblower suits that had remained under seal while her case was being litigated.
Several co-counsel assisted in the litigation, which was styled as:
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