Aegerion Pharmaceuticals Inc., a Cambridge, Massachusetts-based subsidiary of Novelion Therapeutics Inc., will plead guilty to charges relating to its prescription drug, Juxtapid.
Aegerion was represented by Joshua Levy of Ropes & Gray in Boston.
Aegerion introduced Juxtapid into interstate commerce that was misbranded because, among other things, Aegerion failed to comply with a Risk Evaluation and Mitigation Strategy (REMS).
The resolution also includes a deferred prosecution agreement relating to criminal liability under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
Aegerion will also settle allegations that it caused false claims to be submitted to federal healthcare programs for Juxtapid.
Aegerion will pay more than $35 million to resolve criminal and civil liability arising from these matters.
Aegerion has also agreed to enter into a civil consent decree of permanent injunction aimed at preventing future violations of the Federal Food, Drug, and Cosmetic Act (FDCA).
Federal officials alleged that from December 2012 to December 2015, Aegerion introduced into interstate commerce Juxtapid, a drug that was misbranded under the FDCA.
During this time period, Juxtapid was approved by the U.S. Food and Drug Administration (FDA) to treat patients with homozygous familial hypercholesterolemia (HoFH), a rare disorder, inherited from both parents, that prevents the removal of LDL-C, often called the “bad” cholesterol, from the blood, causing abnormally high levels of circulating LDL-C.
The Juxtapid label carried a black box warning that Juxtapid may cause liver toxicity, a serious side effect of using the drug, and the label also warned that Juxtapid may cause gastrointestinal adverse reactions.
The FDA required a REMS, which is a risk management plan deemed necessary to ensure that a drug’s benefits outweigh its risks, as part of Juxtapid’s approval.
The specific purpose of the Juxtapid REMS was to educate prescribers about the risks of liver toxicity and to restrict access to Juxtapid only to those patients with a clinical or laboratory diagnosis consistent with HoFH.
Federal officials alleged that Aegerion failed to give health care providers complete and accurate information about HoFH and how to properly diagnose it, and that Aegerion also filed a misleading REMS assessment report.
Aegerion allegedly failed to comply with the required elements under the REMS to assure safe use of Juxtapid, in violation of the FDCA.
The information alleges that Aegerion management and sales personnel distributed Juxtapid not only for the treatment of HoFH, but also as a treatment for high cholesterol generally, without adequate directions for such use.
Aegerion plead guilty to these charges and will pay a criminal fine and forfeiture of $7.2 million.
In a deferred prosecution agreement to resolve a felony charge that Aegerion conspired to violate HIPAA, Aegerion admitted that it conspired to obtain patients’ personally identifiable health information, without patient authorization, for commercial gain.
Under the terms of the deferred prosecution agreement, Aegerion will implement enhanced compliance provisions, including periodic certifications to the government concerning its implementation of those provisions.
Under the civil false claims settlement, Aegerion will pay $28.8 million over three years to resolve federal and state civil liability for causing false claims for Juxtapid to be submitted to government healthcare programs arising from its promotion of Juxtapid for patients without a diagnosis of, or consistent with, HoFH; false and misleading statements to doctors that the use of Juxtapid was appropriate in patients with symptoms including high cholesterol, irrespective of whether such patients had a diagnosis of HoFH and despite counter-indications to a diagnosis of HoFH; and alteration or falsification of statements of medical necessity and prior authorizations that were submitted to federal healthcare programs.
The government alleged that Aegerion defrayed patients’ copayment obligations for Juxtapid, in violation of the Anti-Kickback Statute (AKS), by funneling funds through Patient Services Inc. (PSI), an entity that claimed to be a non-profit patient assistance organization.
The federal share of the $28.8 million civil false claims settlement is $26.1 million and the state portion is $2.7 million.
“Aegerion put profits over patient safety and enriched itself at taxpayer expense,” said Acting U.S. Attorney William D. Weinreb for the District of Massachusetts. “Our Office is committed to protecting patient safety and the integrity of federal healthcare programs, and we will continue to use our criminal and civil authority to ensure that drug companies play by the rules that protect the public, ensure quality of care, and preserve patient privacy.”
Aegerion entered into a separate civil consent decree to resolve civil liability under the FDCA in connection with its failure to comply with the requirements of the Juxtapid REMS program and its distribution of Juxtapid with labeling that lacked adequate directions for all of Juxtapid’s intended uses.
Aegerion also entered into a Corporate Integrity Agreement (CIA) with the HHS-OIG. The five-year CIA requires, among other things, that Aegerion implement measures designed to ensure that its promotional activities and any arrangements and interactions with third-party patient assistance programs comply with the law.
The CIA requires reviews by an independent review organization and compliance-related certifications from company executives and Board members.
“We sometimes require companies to put in place certain measures to more closely manage a drug’s risks when we don’t believe a medicine’s benefits would outweigh its side effects without these risk mitigation strategies,” said FDA Commissioner Scott Gottlieb, M.D. “This might include requiring prescribers to undergo certain training on a drug’s risks, or having providers take steps to more closely monitor patients. By failing to follow the safety requirements that Aegerion had agreed to, the company put patients’ lives at risk and didn’t honor the safety commitments they made as a condition of gaining approval for their drug. This is unacceptable. We will continue to pursue those who skirt the law, and flout patient safety and other post-market commitments, using all of the enforcement tools available to us. Post-market safety requirements are a key element of FDA’s public health protections and we will ensure that they are fulfilled.”
The civil false claims settlement resolves a lawsuit filed by Michele Clarke, Tricia Mullins, and Kristi Winger Szudlo, former employees of Aegerion, under the qui tam or whistleblower, provisions of the False Claims Act, which permit private individuals, known as relators, to sue on behalf of the government for false claims and to share in any recovery.
Relators will receive $4.7 million from the federal proceeds of the civil false claims settlement.
In a parallel action, Aegerion will pay a $4.1 million penalty to settle the charges brought by the Securities and Exchange Commission (SEC) that it misled investors on multiple occasions in 2013.
The SEC’s complaint alleges that Aegerion told investors that the number of unfilled prescriptions for Juxtapid was not material and the ”vast majority” of patients receiving prescriptions ultimately purchased the drug.
The SEC alleges that Aegerion’s records reflect that it was actually around 50 percent of prescriptions that resulted in actual drug purchases.
”By no one’s math is 50 percent a vast majority,” said Paul Levenson, Director of the SEC’s Boston Regional Office. ”When companies publicly discuss their financial data, they must be truthful. Whether they supply hard numbers or give broader descriptions, they cannot mislead investors.”
In 2013 and 2014, Juxtapid was priced at approximately $250,000 to $300,000 annually per patient.
Following Juxtapid’s introduction in 2013, investors and investment analysts had little financial data to estimate Aegerion’s future revenues from sales of the drug.
Aegerion allegedly provided details on the number of Juxtapid prescriptions during several subsequent earnings calls, but this data alone was insufficient for analysts and investors trying to forecast the company’s future revenues because only prescriptions that were actually filled ”converted” into sales.
According to the SEC’s complaint, it wasn’t until October 2014 that Aegerion disclosed to investors that the conversion rate was actually in the range of 50 to 60 percent. But Aegerion allegedly failed to reveal to investors even then that the conversion rate had hovered around 50 percent since 2013.