Amgen Inc. has agreed to pay $762 million to resolve federal litigation accusing the drug maker of marketing the anemia treatment Aranesp for unapproved uses.
The Thousand Oaks, Calif., company pleaded guilty on Dec. 18 to illegally introducing a misbranded drug into interstate commerce and will pay a $136 million fine and a $14 million forfeiture, according to the U.S. Attorney’s Office for the Eastern District of New York.
Eastern District Judge Sterling Johnson, Jr. accepted the guilty plea and approved Amgen’s global settlement with the United States in which Amgen agreed to pay an additional $612 million—$24.8 million to the states—in a civil settlement.
“Instead of working to extend and enhance human lives, Amgen illegally pursued corporate profits while jeopardizing the safety of vulnerable consumers suffering from disease,” Acting Eastern District U.S. Attorney Marshall L. Miller said in a statement.
Under Justice Department policy, U.S. Attorney Loretta Lynch recused herself from the case because she is a former partner at Hogan & Hartson, which has represented Amgen on some matters although not on this case. Lynch did not personally represent the company while in private practice.
The civil settlement resolves claims in 10 lawsuits against Amgen that were brought under the qui tam, or whistle-blower provisions of the False Claims Act, seven in the Eastern District, two in Massachusetts and one in the state of Washington.
In addition to the fines, the company executed a “corporate integrity agreement,” pledging measures to prevent future wrongdoing.
Amgen general counsel David Scott offered the guilty plea on behalf of his company at a hearing before Johnson on Dec. 18. The company is represented by outside counsel at McDermott Will & Emery.
In a Dec. 18 teleconference, Miller said that the case was “a different type of prosecution” than the government’s conviction of a pharmaceutical sales representative which was overturned by the U.S. Court of Appeals for the Second Circuit earlier this month. In that case, a divided appellate panel found that drug companies and their representatives have a constitutional right to promote prescription drugs for lawful off-label uses under the First Amendment (NYLJ, Dec. 4).
Miller said that though the Second Circuit had found that the communication between the sales reps and doctors was protected speech under the First Amendment, the Amgen case was an instance of a company introducing a product for uses that weren’t approved by the FDA. Miller declined to say whether the Second Circuit’s recent opinion came up during settlement negotiations with Amgen.
Amgen develops biologic medicines, or drugs produced by living cells rather than by mixing chemicals. Aranesp is approved for treating patients with anemia caused by chronic renal failure and chemotherapy.
The Food and Drug Administration approved the drug to be administered once a week or once every two or three weeks, depending on the patient. But prosecutors accused Amgen, among other things, of promoting a once-a-month dose to help Aranesp compete with Johnson & Johnson’s Procrit, which was well-established in the market, according to federal court documents.
Amgen sales representatives created a “Freedom Time” chart to show both doctors and patients how much time they could save if the drug was administered less frequently, the documents said. Sales representatives also used clinical studies to support the dosing, even though the FDA had found the studies insufficient to support its safety and effectiveness.
The guilty plea sends a message to the drug industry that “if you introduce misbranded drugs into interstate commerce, we will find you, prosecute you and hold you accountable,” said Miller.
The agreement is the latest between the Justice Department and a drug maker over allegations of improper marketing. Pharmaceutical companies aren’t allowed to market drugs for unapproved uses, but the issue is far from clear cut.
Doctors can prescribe drugs for unapproved uses, and they say these prescriptions play a crucial role in treating patients, especially those with deadly illnesses and few treatment options.
And while drug companies can’t market for off-label uses, their sales representatives can distribute copies of scientific journal articles that discuss off-label uses.
In July, British drug maker GlaxoSmithKline PLC said it will pay $3 billion in fines for criminal and civil violations involving 10 drugs as part of the largest health care fraud settlement in U.S. history.
In 2009, federal prosecutors hit Pfizer Inc., the world’s largest drug maker, with $2.3 billion in penalties tied to violations of federal drug rules.
The large settlements are smaller than the annual sales top blockbuster drugs can generate, but they generate bad publicity that drug makers want to avoid, said Dr. Adriane Fugh-Berman, a Georgetown University professor. Fugh-Berman has served as a paid witness in court cases over drug marketing and started the watchdog website pharmedout.org, which details industry tactics.
“I like to think [settlements and fines] have some mitigating effect, but it’s hard to gauge,” she said.
Among the government attorneys working on the case were Eastern District Assistant U.S. Attorneys Roger Burlingame, Winston Paes, Deborah Zwany, Paul Kaufman and Erin Argo. Also participating were New York State Assistant Attorneys General Jay Speers, Carolyn Ellis, Christopher Miller, and Laura Meehan.
@|Ross Todd, a reporter for Litigation Daily, an affiliate of the Law Journal, can be contacted at firstname.lastname@example.org. Tom Murphy is a reporter for Associated Press.