Amgen Ordered to Pay $25 Million to Settle Kickback Allegations

The U.S. Department of Justice (DOJ) has reached a settlement with California-based biotechnology firm, Amgen, over alleged kickback payments tied to its anemia drug.  It was alleged that long-term pharmacy providers were enticed to use Aranesp, an anemia drug, as opposed to the rival medicine, by Amgen by paying kickbacks, as well as Amgen’s encouraging the “off-label” use of Aranesp in order to increase sales.

The DOJ charged that the world’s largest biotechnology company violated the False Claims Act by kickbacks paid to Omnicare Inc. of Cincinnati, and PharMerica Corp., and Kindred Healthcare Inc., both of Louisville, Kentucky, in exchange for switching Medicare and Medicaid patients to Aranesp to treat their anemia.

According to the lawsuit, Amgen made payments to Omnicare Inc. of Cincinnati, and PharMerica Corp., and Kindred Healthcare Inc., both of Louisville, Kentucky, for eight years in exchange for their efforts to switch Medicare and Medicaid beneficiaries from competitor’s medications to Aranesp (darbepoetin alfa). The companies specialize in providing pharmaceuticals to nursing homes and other long-term-care facilities.

“We will continue to pursue pharmaceutical companies that pay kickbacks to long-term care pharmacy providers to influence drug-prescribing decisions,” Stuart Delery, acting assistant attorney general for the Justice Department’s Civil Division, said in a statement.

“Patients in skilled nursing facilities deserve care that is free of improper financial influences,” he added.

The civil settlement resolves a lawsuit filed in the U.S. District Court for the District of South Carolina under the whistleblower provision of the False Claims Act, the DOJ said. This suit was one of five qui tam, or whistleblower, lawsuits filed against Amgen involving alleged kickbacks. It was reported that two of the suits were dismissed and another had been settled.

Whistleblower Frank Kurnik, the Amgen employee who filed the suit prompting the government investigation, will receive between 15 and 20 percent of the total settlement amount, according to reports.

Kurnik alleges that from 2003 through 2011, Amgen worked to influence health care providers’ selection and use of Aranesp, which was approved for use in patients with severe anemia in danger of kidney failure form frequent blood transfusions.

It is alleged that Amgen paid kickbacks to the companies by means of volume-based grants, honoraria and speaker fees, dinners and travel expenses for their personnel, and the purchase of what the government calls “unnecessary data,” the Justice Department said.

According to the suit, Amgen also urged long-term-care pharmacies to expand Aranesp use by pressuring their consultant pharmacists to recommend their drug for patients who did not have “anemia associated with chronic renal failure,” as described on the drug’s Food and Drug Administration-approved package insert.

According to federal prosecutors, pharmaceutical manufacturers who pay long-term care providers to improperly influence medical decisions for patients will be violated and held accountable.

Thousands of prescriptions were written for elderly patients who did not need this medication and Medicare and Medicaid were billed for this. This not only places the patients at risk, but it costs the U.S. government a tremendous amount of money, unnecessarily.

Back in February, Merck agreed to settle shareholder lawsuits relating to disclosures about its cholesterol drug Vytorin for $688 million.

Hopefully this settlement will serve as an example to pharmaceutical companies that violate the law. Feel free to comment on this blog post. For more information, contact one of our Gacovino Lake attorneys at 1-800-246-HURT (4878).

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