Amgen Pleads Guilty, to Pay $762 Million to Settle False Claims Charge

The American biotech giant Amgen pled guilty illegally introducing a misbranded drug into interstate commerce.

The plea was part of a global settlement with the United States in which Amgen agreed to pay $762 million to resolve criminal and civil liability arising from its sale and promotion of certain drugs.

Amgen pled guilty to illegally introducing a misbranded drug, Aranesp, into interstate commerce.

Amgen was represented in the criminal case by David Rosenbloom of McDermott Will & Emery in Chicago.

Under the Food, Drug and Cosmetic Act, it is illegal for drug companies to introduce into the marketplace drugs that the company intends will be used “off-label” – for uses or at doses not approved by the FDA.

Aranesp is an erythropoiesis-stimulating agent (ESA) that was approved by the FDA at calibrated doses for particular patient populations suffering from anemia.

In order to increase sales of Aranesp and reap the resulting profits, Amgen illegally sold the drug with the intention that it be used at off-label doses that the FDA had specifically considered and rejected, and for an off-label treatment that the FDA had never approved.

Under the terms of the criminal plea agreement, Amgen will pay a criminal fine of $136 million and criminal forfeiture in the amount of $14 million.

Amgen will also pay $612 million – $587.2 million to the United States and $24.8 million to the states – to resolve claims that it caused false claims to be submitted to Medicare, Medicaid and other government insurance programs.

The federal civil settlement agreement encompasses allegations that Amgen promoted Aranesp and two other drugs that it manufactured, Enbrel and Neulasta, for off-label uses and doses that were not approved by the FDA and not properly reimbursable by federal insurance programs; offered illegal kickbacks to a wide range of entities in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal health care programs or were medically necessary; and engaged in false price reporting practices involving several of its drugs.

The $612 million dollar civil settlement encompasses broader allegations by the United States against Amgen than those contained in the criminal information.

The civil settlement agreement resolves claims contained in ten lawsuits against Amgen that were brought under the qui tam, or whistle-blower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery.

Seven of these cases currently are pending in the Eastern District of New York, two are pending in the District of Massachusetts and one in the Western District of Washington.

“This was a clown car of corporations engaged in a conspiracy of fraud, with Amgen as the kickback-maker to doctors, hospitals and influence-peddlers of every variety,” said Patrick Burns of Taxpayers Against Fraud. “Apparently a lot of cancer doctors are little more than crooks who hoover up payola like squirrels at a bird feeder. It’s a sad statement and a reminder that putting on a white coat does not automatically make you ethical and honest.”

“Amgen made billions of dollars ripping off Uncle Sam and consumers, and when the dust finally settled, they had to pay back less than $800 million. I am not sure that’s an equation that is going to prevent future frauds of this kind.”

“So long as there is profit in fraud, even when caught, and no one goes to jail, even when caught, we are going to see prescription drug companies, hospitals and doctors engage in massive frauds,” Burns said. “Something has to change, and the penalty system is one place to start. The fines need to be larger, key executives need to be excluded from management position in companies doing business with Uncle Sam, and some people need to go to jail as well. Only when DoJ cranks up the heat, will these fraudster companies begin to see the light. Recovering back only a portion of the money stolen is simply not enough.”

Whistleblower Kassie Westmoreland played a critical role in the success of the government’s prosecution, which involved her complaint, as well as several other whistleblower-filed suits against Amgen.

Westmoreland, a pharmacist and former Amgen employee, filed suit against her former employer and INN (then known as International Nephrology Network) in 2006 in federal district court in Boston alleging a variety of national fraud schemes involving Amgen’s drug Aranesp.

Her case was assigned to Judge William G. Young, who denied transfer to Brooklyn and ordered the case unsealed in 2009, while other suits against Amgen remained under seal, mostly in Brooklyn, where the government’s investigation was based.

Westmoreland was represented by Bob Thomas and Suzanne Durrell in Boston.

“Judge Young’s decision to unseal Ms. Westmoreland’s complaint against Amgen and INN was a critical moment in the history of not only this case but the government’s overall investigation,” Thomas and Durrell said. “With the federal government electing at that juncture to remain on the sidelines of the litigation in Boston, Kassie Westmoreland showed incredible courage and determination in pressing on with the litigation with her own team and with the state governments who intervened.”

“In the end, after defending her claims from various defense motions to dismiss and motions for summary judgment and obtaining powerful evidence for trial through discovery, the imminent trial date in Ms. Westmoreland’s case as of October 2011 brought Amgen and INN to the table in negotiations with the government.”

Another key whistleblower was Jill Osiecki.

“What Amgen didn’t know after it launched the Aranesp schemes was that our client, Jill Osiecki, a long-time marketing rep, recognized the danger to patients and, on her own, reported her concerns to the government,” said attorney Brian Kenney of Kenney & McCafferty. “Later, Department of Health and Human Services Office of Inspector General Special Agents asked her to work undercover for them.”

“Jill has a master’s degree, spent 15 years at Amgen and before leaving the company, was a top performer in the biotech giant’s top-performing district. In August 2004 she was so troubled by the Amgen schemes, which she feared were putting patients at risk, that she promptly contacted the Government and went undercover at special agents’ request to make numerous recordings in five different states at national, regional, and district meetings,” said Tavy Deming of Kenney & McCafferty.

Osiecki said that “at the 13 sales and marketing meetings I secretly recorded over 18 months at the request of federal authorities I’d hear speakers jokingly tell participants to turn off their tape recorders, or express the hope that no one was recording their session.”

“Those comments were always followed by uproarious laughter. I laughed too, outside and inside, knowing the wire I wore was bringing that guilty comment directly to the Government,” Osiecki said.

Another whistleblower was Angela Kelly Silva.

Kelly alleged kickback violations to doctors and hospitals for Aranesp and Neulasta.

Kelly was represented by lawyers at Sanford Heisler.


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