While he was an employee of Amgen Inc., Steve Harris participated in one of the drug maker’s employee pension plans, which invested part of plan participants’ funds in Amgen stock. In 2005, Amgen stock was trading at $86.17, flying high on strong sales of its anemia drug Aranesp, which the company was aggressively marketing.
But over the next three years, Amgen stock plummeted precipitously as allegations surfaced that Amgen had withheld results of tests that showed Aranesp was not as safe as initially thought, and the company had been illegally marketing the drug for off-label uses. Amgen stock lost a third of its value even before the company pled guilty to federal charges that it illegally marketed the drug for off-label uses and agreed to pay $150 million in criminal penalties and a $612 million civil settlement.
