Amgen Agrees to Pay $762 Million to Settle Aranesp False Claims Case

Amgen pled guilty yesterday to marketing its blockbuster anemia drug darbepoetin alfa (Aranesp) for off-label dosing regimens, agreeing to pay more than $760 million in fines. The drug, administered once weekly, was initially approved in September 2001 to treat anemia caused by chronic renal failure.

Simply put, here’s what Amgen did:

  • Because Amgen knew it would have a difficult time competing with JNJ’s Procrit –which had a FDA approved dosing schedule of every other week– Amgen intentionally misused a statement in the Aranesp label that said it had a longer serum half-life –a statement it used to justify a less-frequent dosing protocol. The company had also successfully obtained a tacit endorsement for the unapproved dosage by getting it listed in a U.S. Pharmacopeia’s Drug Information publication, a compendia which CMS recognizes and uses to qualify drugs for off-label reimbursement. With all the pieces of the puzzle in place, Amgen sales reps hit the streets promoting Aranesp on a once monthly dosing schedule. And why not? Amgen had used a very similar strategy in marketing Aranesp for yet another unapproved off-label use –for patients with chemotherapy-induced anemia, an indication approved by the FDA for a once-weekly dose back in July 2002. Once again, the company had sought FDA approval for a once-monthly dose, but the FDA never approved it. The FDA found that the higher, less frequent dose led to a higher risk of death, the complaint read.

The settlement includes a $612 million civil settlement, a $14 million forfeiture, and $136 million in criminal fines, according to the law firm Sanford Heisler, which represented the whisteblower, a former Amgen sales representative, in the qui tam case. And it would know, because its fee should be somewhere in the $40 million range (i.e. the whistleblower’s fee is usually about 16% of the total fines collected; attorneys typically receive 30% of that number). The plea agreement must be accepted by U.S. District Judge Sterling Johnson, which could be done as soon as Wednesday morning. And as part of the plea agreement, “Amgen will also enter into a Corporate Integrity Agreement that will make personally accountable Amgen board members and executives, increase corporate transparency, and strengthen its legal compliance structures,” Miller said. “If the court accepts the plea and enters an agreed sentence, Amgen expects immediately thereafter to complete the comprehensive resolution of related civil and criminal matters for which a $780 million charge was recorded in the third quarter of 2011 and to enter into a corporate integrity agreement,” Amgen said in a statement.

In street parlance, do you think Amgen was asking for it? Consider this: Aranesp did $1.6 billion in sales in just the first 9 months of this year. In fact, illegal gambles like these almost always pay off for the perps. That’s why  Corporate Integrity Agreements are becoming more popular. Senior executives are far less reckless with their own money  –and the prospect of jail time just isn’t in their cards. But it’s a dance. The DOJ/US Treasury survives by those fines, so a few good “fine slaps” will generally precede holding executives personally accountable. One thing is an absolute: For those with the stomach for it, a whistleblower’s odds are excellent, relative to playing the lottery.

Editors Note: Whistleblowers were paid $2.39 billion from 1987 to 2009, or 16 percent of the $15.19 billion collected in False Claims lawsuits where the federal government joined a case, according to the Justice Department, Bloomberg News reports. However, the US government rejects about 80 percent of federal cases, which means whistleblowers are more often than not, on their own.

Source: PRNewswire, Reuters

—Tom Finn

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