Shares of Amgen (AMGN) falling…
Breaking from the New York Attorney General’s Office:
NEW YORK, NY (October 30, 2009) – Attorney General Andrew M. Cuomo today announced that New York and 14 other states are filing a lawsuit against Biotech giant Amgen following an investigation spearheaded by
his office into a nationwide kickback scheme to boost drug sales.
In a lawsuit filed today in federal court the states charge drug manufacturer Amgen, International Nephrology Network (INN), a specialty group purchasing organisation, and ASD Healthcare, a wholesaler, with offering kickbacks to medical providers to increase sales of Amgen’s anemia drug, Aranesp.
“Drugs should be prescribed to patients on the basis of need, effectiveness, and safety, not on a corporate giant’s promise of an all-expense paid vacation,” said Attorney General Cuomo. “In an egregious violation of the law, Amgen allegedly bribed medical providers and left taxpayers footing the bill for free drug samples. My office’s Medicaid Fraud Control Unit will continue to work with our partners in other states to uncover these kinds of abuses.”
According to the multi-state complaint, the companies would encourage medical providers to bill third party payers such as Medicaid for free Aranesp that were provided at no cost. Amgen is further alleged to have conspired with INN and ASD Healthcare to offer illegal kickbacks to medical providers, such as sham consultancy agreements, weekend retreats, or other services to induce them to purchase and prescribe Aranesp with the intention and effect of increasing sales of Aranesp and converting new providers from competitor drugs to Aranesp.
As a result of the illegal inducements to increase sales of Aranesp, the complaint asserts the companies caused medical providers to falsely certify to state Medicaid programs that the providers were in compliance
with federal and state anti-kickback statutes, which prohibits bribes to medical providers. Because compliance with these laws is a condition of payment by the Medicare and Medicaid programs, defendants allegedly caused thousands of ineligible claims for Aranesp to be paid and millions of dollars in damages to state Medicaid programs. This 15-state action joins a whistleblower suit filed in the United States District
Court for the District of Massachusetts in 2006. The United States Department of Justice continues to investigate these allegations.
Aranesp (darbepoetin alfa) is an erythropoiesis-stimulating agent (ESA) and injectable drug product developed and manufactured by Amgen to stimulate and boost the production of red blood cells in the body. It was approved by the FDA in 2001 to treat anemia associated with chronic renal failure and in 2002 to treat chemotherapy-induced anemia in certain types of cancer patients. Aranesp has been a lucrative product
for Amgen with total sales revenue reaching over $11 billion dollars since the drug was first introduced into the marketplace. The Medicare and Medicaid programs have paid hundred of millions of dollars for
The states involved in the complaint are: California, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Indiana, Louisiana, the Commonwealth of Massachusetts, Michigan, Nevada, New Hampshire, New
York, Tennessee, and the Commonwealth of Virginia.
The case is being lead by Special Assistant Attorney General Margot Schoenborn of the Attorney General’s Medicaid Fraud Control Unit. The multi-state investigation was coordinated by a team appointed by the
National Association of Medicaid Fraud Control Units.
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