Dec. 19 (Bloomberg) -- Amgen Inc., the world’s largest biotechnology company, agreed to pay $762 million in criminal penalties and civil settlements as it pleaded guilty to misbranding its anemia drug Aranesp.
The company, based in Thousand Oaks, California, entered a guilty plea yesterday to one misdemeanor charge before U.S. District Judge Sterling Johnson in Brooklyn, New York. Johnson said he will decide today whether to accept the firm’s deal with the government.
“On behalf of the company, I offer a plea of guilty to the misbranding charge,” Amgen General Counsel David Scott told the judge.
Amgen promoted Aranesp for uses not approved by the U.S. Food and Drug Administration from 2001 through March 2007 in an effort to gain market share from Johnson & Johnson’s anemia treatment Procrit, according to a criminal information filed yesterday in court.
Aranesp was approved for patients suffering from anemia caused by chronic kidney failure and chemotherapy, according to the filing. Amgen sales representatives promoted the drug for larger, less frequent doses than indicated on the drug’s label, and for unapproved use in patients with anemia caused by cancer, prosecutors said in the filing.
The anemia treatments, which are administered intravenously or by injection, can cause patients pain, making less frequent dosing desirable, prosecutors said.
The FDA declined to approve changes for dosing indications requested by Amgen in 2005, 2007 and 2008, according to the information. In 2007, the agency issued a statement that Aranesp “increased the risk of death” in cancer patients not receiving chemotherapy or radiation treatment, and required a warning against that use on the label, according to the filing.
Amgen stopped promoting the drug for that use when the warning was issued, according to prosecutors.
The company agreed to pay $150 million in criminal fines and penalties. It will also pay $612 million in civil settlements, prosecutors said during yesterday’s hearing.
Amgen was “pursing profits at the expense of patient safety,” said Marshall L. Miller, head of the criminal division of the U.S. Attorney’s Office in Brooklyn, after yesterday’s proceeding. “Today’s guilty plea represents a sweeping victory for the American public.”
‘On the Hook’
As part of the company’s plea, it will sign on to a corporate integrity agreement under which management will be “on the hook” in the event of any future misbranding, Miller said. Amgen will also have to regularly report its compliance with drug promotion regulations to the government, he said.
No criminal charges have so far been filed against any individuals as part of the misbranding case, Miller said. The company’s participation in government programs, including Medicaid or Medicare coverage of Aranesp, will not be affected, he said.
The company also faces whistle-blower lawsuits that haven’t been made public over its marketing practices. One of the whistle-blowers is an oncology sales representative who worked for Amgen from 2002 to 2005, according to a statement from her law firm Sanford Heisler LLP. Amgen is accused in the lawsuit of using illegal kickbacks to encourage the use of Aranesp in addition to promoting off-label use of the drug, according to the law firm.
$780 Million Charge
The company announced in October 2011 that it took a $780 million charge to cover the costs of settling civil and criminal probes into whether it engaged in improper sales of drugs, including Aranesp. At least 15 states have sued the company and alleged that it encouraged doctors to overbill third-party payers, including Medicaid, for Aranesp prescriptions.
“If the court accepts the plea and enters an agreed sentence, Amgen expects immediately thereafter to complete the comprehensive resolution of related civil and criminal matters for which a $780 million charge was recorded in the third quarter of 2011 and to enter into a corporate integrity agreement,” Ashleigh Koss, an Amgen spokeswoman, said in a statement.
Prosecutors had planned to obtain Johnson’s approval for the plea deal in court yesterday. Johnson refused to grant it, saying that he wanted more time to review the terms.
“You dumped this on me,” Johnson said in court, adding that he had only received the sentencing information that morning.
“This is a very important case,” he said. “This is a significant case. You have gotten together the highest levels of government and you agreed on it.”
“I am not prepared to go forward in the blind,” Johnson said.
The case is U.S. v. Amgen Inc., 1:12-cr-00760, U.S. District Court, Eastern District of New York (Brooklyn).
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