Amgen Inc. Pleads Guilty to Federal Charge; Pays $762 Million to Resolve Criminal Liability and False Claims Act Allegations

WASHINGTON New York, U.S. District Judge Sterling Johnson, Jr. has accepted a guilty plea by American biotechnology giant Amgen Inc. (Amgen) for illegally introducing a misbranded drug into interstate commerce. The plea is 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. The settlement represents the single largest criminal and civil False Claims Act settlement involving a biotechnology company in U.S. history. As part of the plea agreement and criminal settlement, Amgen entered a guilty plea to a criminal information charging the company with illegally introducing a misbranded drug, Aranesp, into interstate commerce. 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, i.e., 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. As part of the civil settlement, Amgen has agreed to 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: (1) 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; (2) 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 (3) engaged in false price reporting practices involving several of its drugs. As part of the global settlement, Amgen has also agreed to enter into a Corporate Integrity Agreement (CIA) with HHS-OIG that will govern its conduct and ensure careful oversight of its branding and marketing practices. The Criminal Plea Agreement The information alleges the following: Beginning at the launch of Aranesp in 2002 and extending until 2007, Amgen illegally introduced Aranesp for uses and at dosage levels that the FDA had specifically declined to approve due to insufficient clinical evidence to establish their safety and efficacy. In particular, Amgen illegally introduced Aranesp into the oncology and nephrology ESA markets, intending that it be used for patients suffering from anemia due to chronic kidney disease or chemotherapy at off-label, unapproved doses that were larger and less frequently administered than those approved by the FDA for these patient populations. Amgen also illegally introduced Aranesp into the oncology ESA market intending that it be used to treat anemia caused by cancer, irrespective of whether the patient had been prescribed chemotherapya use which the FDA had never approved and which the FDA subsequently determined caused an increased risk of death. In particular, in 2007, the FDA mandated that a black box label be added to Aranesps label, warning that Aranesp increased the risk of death...in patients with active malignant disease [cancer] receiving neither chemotherapy nor radiation. At approximately the time that the FDA issued the black box warning, Amgen ceased its promotion of Aranesp for the treatment of anemia caused by cancer rather than the cancers treatment. Amgens internal sales and marketing materials made plain that Amgens misbranding of Aranesp was the companys core business strategy to gain market share from its only ESA competitor, Procrit, sold by Johnson & Johnson. At the time of Aranesps 2002 launch, doctors typically prescribed Procrit to treat the anemic patient populations for which Aranesp was approved. To compete with Procrit, Amgen built the Aranesp commercial strategy around the unapproved, off-label approach of a less frequent dosing schedule, which Amgen sales representatives argued was more convenient for patients and more profitable for doctors. Amgen implemented this illegal commercial effort through its promotion of off-label doses from two to four times larger than those approved by the FDA, administered far less frequently than approved by the FDA. When this unapproved, off-label dosing effort proved commercially successful, Amgen sales and marketing executives determined that capturing the population of anemic cancer patients who were not undergoing chemotherapy was the next big thing and would give Amgen a 51 percent [ESA] market share. Accordingly, the company set about capturing the off-label market of patients suffering from anemia caused by cancer itself, rather than anemia caused by chemotherapy, and its sales representatives began marketing the safety and efficacy of Aranesp in that population. Ultimately, in 2007, the FDA determined that Aranesp increased the risk of death in that very population. Aware that its misbranding of Aranesp was illegal, Amgen instructed its sales representatives to promote off-label uses through the guise of reactive marketing. This technique attempted to circumvent the law by inducing doctors to ask questions about an off-label use, to serve as a smokescreen to hide Amgens intentional effort to introduce the drug for unapproved, off-label uses. Amgen thus trained its sales representatives to intentionally elicit questions from doctors about off-label uses as legal cover to then provide the doctors with studies supporting the off-label use, thereby promoting the drug for that unapproved use. The studies Amgen provided to doctors to support off-label uses were often the very same studies that the FDA had rejected as insufficient to support the safety and efficacy of those off-label uses, when Amgen had applied to expand Aranesps label to encompass them. The Civil Settlement Agreement The $612 million dollar civil settlement encompasses broader allegations by the United States against Amgen than those contained in the Information. The civil settlement agreement resolves claims contained in 10 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. The 10 cases are: United States ex rel. Cantor v. Amgen Inc., Civil Action No. CV-04-2511 (E.D.N.Y.); United States ex rel. Osiecki v. Amgen Inc., Civil Action No. CV-05-5025 (E.D.N.Y.); United States ex rel. Westmoreland v. Amgen Inc., Civil Action No. 06-CV-10972 (D. Mass.); United States ex rel. Arriazola v. Amgen Inc., Civil Action No. CV 06-3232 (E.D.N.Y.); United States ex rel. Horwitz v. Amgen Inc., Civil Action No. C07-0248 (W.D. Wash.); United States ex rel. Kelly v. Amgen Corporation, Civil Action No. CV-08-4157 (E.D.N.Y.); United States ex rel. Hanks v. Amgen Inc., Civil Action No. CV 08-3096 (E.D.N.Y.); United States ex rel. Ferrante v. Amgen Inc., Civil Action No. CV-08-3931 (E.D.N.Y.); United States ex rel. Tucker v. Amgen Inc., Civil Action No. CV-09-0887 (E.D.N.Y.); and United States ex rel. DJAE Partnership v. Amgen Inc., Civil Action No. 11-CV- 11242 (D. Mass.). Like the Information, the civil settlement contains allegations that Amgen improperly marketed Aranesp. More specifically, the United States contends that between September 2001 and September 2011, Amgen knowingly promoted the sale and use of Aranesp for dosing regiments and indications which were (a) not approved by the FDA and (b) not medically accepted indications, including anemia caused by cancer, anemia caused by chronic disease, chronic anemia, and anemia caused by myelodysplastic syndrome. The United States further contends that Amgen used journal articles that were insufficient to support the safety and efficacy of the off-label uses at issue and improperly obtained listings in medical compendia in an effort to establish that the off-label uses were medically accepted, and thereby eligible for coverage by federal health care programs. The United States contends that Amgen similarly promoted its drugs Enbrel and Neulasta for off-label indications that were not eligible for coverage by federal health care programs. The civil settlement agreement also covers claims that Amgen knowingly reported inaccurate pricing information such as Average Sales Prices, Best Prices, and Average Manufacturer Prices for several drugs. In a separate civil settlement, International Nephrology Network (INN), renamed Integrated Nephrology Network, a subsidiary of AmerisourceBergen Corporation, has also agreed to pay $15 million to resolve civil liability arising from its role in the marketing of Aranesp. The agreement encompasses claims that INN offered illegal kickbacks to influence health care providers selection of Aranesp for treatment of kidney disease and in so doing also caused false price reporting for Aranesp. This agreement resolves a single qui tam action. The Corporate Integrity Agreement In addition to the criminal and civil resolutions, Amgen also executed a CIA with HHS-OIG. The five-year CIA includes provisions designed to increase accountability of individuals and Board members, to increase transparency, and to strengthen Amgens compliance program. The CIA requires that a committee of Amgens board of directors annually review the effectiveness of the companys compliance program and that executives in key areas certify to compliance. It also requires that Amgen post on its company website information about payments to doctors. Under the CIA, Amgen must establish and maintain a centralized risk assessment and mitigation program and policies relating to research, publications, and Amgens interactions with federal payors. Amgen is subject to exclusion from federal health care programs for a material breach of the CIA and subject to monetary penalties for less significant breaches.