Oct. 30 (Bloomberg) -- Amgen Inc., the world’s largest biotechnology company, was sued by New York and 14 other states following an investigation into a nationwide kickback scheme to boost drug sales, New York Attorney General Andrew Cuomo said.

Amgen and two units of AmerisourceBergen Corp. offered kickbacks to medical providers to increase sales of the drugmaker’s anemia medicine, Aranesp, Cuomo said in a statement.

The companies encouraged providers to bill third-party payers such as Medicaid for free Aranesp, Cuomo said. Amgen also conspired with the AmerisourceBergen units to provide sham consultant agreements, weekend retreats and other services to get them to purchase and prescribe Aranesp, he said in the statement.

“Drugs should be prescribed to patients on the basis of need, effectiveness and safety, not on a corporate giant’s promise of an all-expense paid vacation,” Cuomo said.

Aranesp was Amgen’s third-biggest drug in 2008 with $3.1 billion in sales, according to data compiled by Bloomberg from company releases.

“We believe that the allegations are without merit, and we look forward to the opportunity to examine these matters with the states before the court,” David Polk, an Amgen spokesman, said in an e-mail. He said employees are expected to follow the company’s code of conduct, called “Do the Right Thing.” Amgen can’t comment further because the matter is in litigation, he said.

AmerisourceBergen ‘Cooperating’

Mike Kilpatric, a spokesman for AmerisourceBergen, the Chesterbrook, Pennsylvania-based parent of Integrated Nephrology Network and ASD Healthcare, said his company learned of the action by the attorneys general today and was “cooperating fully” with a subpoena the company previously received from the U.S. Department of Justice.

“We have had no contact on this case with anyone in the New York AG’s office or other states attorneys general and we expect to defend ourselves vigorously,” he said in a telephone interview today. Federal prosecutors have so far declined to intervene in the case, he said.

Integrated Nephrology Network, formerly known as International Nephrology Network, is a specialty group purchasing organization and ASD Health Care is a distribution unit. They buy and distribute drugs used in kidney treatment to doctors and specialty clinics such as dialysis centers, Kilpatric said.

The suit was filed in federal court in Massachusetts, according to Cuomo’s office, which said a whistleblower suit was filed in 2006.

Lost Sales

Aranesp, once Amgen’s best-selling product, has lost sales since 2006 when high doses of the drug were linked to increased rates of heart attack and death in kidney patients. Aranesp sales fell 25 percent in 2008 from $4.1 billion in 2006.

Aranesp has had sales revenue of more than $11 billion since it was first introduced, Cuomo said in his statement. It was approved by the U.S. Food and Drug Administration in 2001 to treat anemia associated with renal failure and in 2002 to treat chemotherapy-induced anemia. The drug was developed and manufactured by Amgen to stimulate and boost the production of red blood cells in the body, Cuomo said.

The other jurisdictions that joined in the suit are California, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Nevada, New Hampshire, New York, Tennessee and Virginia.

Amgen fell 67 cents to $53.62 in New York Stock Exchange composite trading.

To contact the reporters responsible for this story: Karen Freifeld in New York at kfreifeld@bloomberg.net; Rob Waters in San Francisco at rwaters5@bloomberg.net.

Last Updated: October 30, 2009 16:08 EDT