Amgen pays nearly $25 million to settle kickback allegations

by Ben Vernia | April 16th, 2013

On April 16, the Department of Justice announced that California-based Amgen, Inc., has agreed to pay nearly $25 million to settle charges, initially brought by a whistleblower, that it paid kickbacks to long-term care pharmacies to encourage physicians to switch to the company’s drug, Aranesp. According to DOJ’s press release:

Amgen Inc., a California-based biotechnology company, has agreed to pay the United States $24.9 million to settle allegations that it violated the False Claims Act, the Justice Department announced today. Amgen develops, manufactures, and sells pharmaceutical products, including products sold under the trade name Aranesp.

The settlement resolves allegations that Amgen paid kickbacks to long-term care pharmacy providers Omnicare Inc., PharMerica Corporation and Kindred Healthcare Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicare and Medicaid beneficiaries from a competitor drug to Aranesp. The government alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds. The government further alleged that, as part of the therapeutic interchange program, Amgen distributed materials to consultant pharmacists and nursing home staff encouraging the use of Aranesp for patients who did not have anemia associated with chronic renal failure.

Although DOJ disclosed that the case was initially brought by a whistleblower, the Department did not identify the amount the qui tam relator will receive as a result of the settlement.

Disclosure: The Vernia Law Firm represents a whistleblower in an unrelated qui tam case against Omnicare, Inc., which was named as a kickback recipient in DOJ’s press release. (That suit, U.S. ex rel Fox Rx, Inc. v. Omnicare, Inc. (N.D.Ga.), alleges that Omnicare knowingly submitted claims for a different class of drugs (atypical antipsychotics) to Medicare’s Part D program that lacked a medically accepted indication.)

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