The settlement would include a payment to a former Aranesp product manager, Kassie Westmoreland, to resolve a whistleblower lawsuit. Westmorland worked at Amgen from 2002 to 2005. The suit alleged that the company gave "liquid kickbacks" to doctors, as well as other incentives. She accused the company of overfilling Aranesp vials so that doctors could have extra medication free of charge, the company would then encourage the doctors to overcharge private insurers and Medicare for this extra amount, resulting in more profits for the company.
The court has not yet revealed how much the whistleblower settlement is. Law firm, Sanford Heisler, which represents the former Amgen employee, wrote in a communiqué that it could amount to $612 million. The law firm then withdrew its statement after the judge said clearly that the settlement would not be approved until Wednesday.
Westmoreland is also suing the company for retaliation and wrongful termination. She will most likely receive a part of the Amgen settlement under federal law for whistleblowers.
Amgen knew it would find it hard to compete against Johnson & Johnson's Procrit (Epoetin alfa), a well established medication which is used once every two weeks. The company used a statement in the product labeling to its advantage that stated that Aranesp had a longer serum half-life than Procrit, which may suggest a less-frequent dosing schedule for the patient.
Pursuing profits at the risk of patient safetyAmgen pharmaceutical sales representatives promoted Aranesp for the once monthly dose (off label), according to a complaint filed by the US Attorney's Office in the Eastern District of New York. The complaint was filed last Tuesday.
The company had tried to get Aranesp's dosage's listing in the Pharmacopeia's Drug Information, which would then allow Medicare and Medicaid to reimburse its usage off-label.
The criminal complaint stated "As part of its strategy to increase sales of Aranesp, Amgen instructed its sales representatives to distribute laminated reprints of the Aranesp compendia listing for the (once monthly) QM dose to healthcare professionals with the intent that the healthcare professionals would use Aranesp for QM dosing."
Prosecutors explained that Aranesp is administered intravenously or by injection. Patients often find it painful, so changing from twice a month to once a month would make it more desirable.
Prosecutors said that Amgen had been "pursuing profits at the risk of patient safety".
A doctor can legally prescribe a medication for off-label uses. However, pharmaceutical and biotech companies are not allowed to promote off label usage to doctors.
According to Amgen in October 2011, $780 million had been put aside to settle the allegations. At least 15 states have filed lawsuits against the company, alleging that it tried to encourage doctors to overcharge Medicaid and Medicare for Aranesp prescriptions.
According to Amgen, the company will enter into a corporate integrity agreement with the US government so that it can carry on selling medications through public health care programs.
Should Amgen board members and executives commit similar offenses in the future, the agreement makes these people personally liable. Marshall Miller, a US Attorney's Office for the Eastern District prosecutor said "We're placing those individuals on the hook for any future violations."
According to the Justice Department charges, Amgen promoted Aranesp at higher doses and at intervals the FDA had not approved. Aranesp had been approved for use in kidney disease and cancer. It was initially approved in September 2001 for the treatment of anemia caused by chronic kidney (renal) failure and chemotherapy.
Marshall L. Miller, from the US Attorney's Office in Brooklyn said after the proceeding "Today's guilty plea represents a sweeping victory for the American public."
Aranesp sales reached $2.3 billion in 2011, down from $4.1 billion in 2006. Sales declined steadily amid increased scrutiny regarding its costs to Medicare and safety warnings.
Written by Christian Nordqvist