Md. Enters Into Fraud Settlement with Amgen, Inc.

Company pays $612 million to states to resolve Medicaid fraud allegations

BALTIMORE (January 4, 2013) – Attorney General Douglas F. Gansler announced today that Maryland, joined by other states and the federal government, reached an agreement with Amgen, Inc. to settle allegations that the company engaged in various illegal marketing practices to promote sales of the drugs Aranesp, Enbrel, Epogen, Neulasta, Neupogen and Sensipar. Amgen was also alleged to have inaccurately reported and manipulated prices for these drugs, causing the submission of false claims.

“This is unfortunately not the first time a pharmaceutical company has improperly marketed one or more of its products to the public,” said Attorney General Gansler. “Hopefully, this settlement sends yet another message to drug manufacturers that state and federal regulators are monitoring their conduct and will come down hard on entities that violate the public trust.”

Amgen will pay the states and the federal government a total of $612 million in civil damages and penalties to compensate Medicaid, Medicare and various federal healthcare programs for harm suffered as a result of its conduct. The Maryland Medicaid program will receive $856,473.73 from the settlement. That payment will provide restitution and other penalties to both the State and Federal governments for the false Medicaid claims.

In addition, Amgen pleaded guilty on December 18 to a criminal information to be filed by the federal government in the United States District Court for the Eastern District of New York, that will allege a violation of Title 21, United States Code, Sections 331(a), and 333(a)(1) and Title 18, United States Code, Sections 2 and 3551 et seq., namely, the introduction into interstate commerce of a drug that was misbranded within the meaning of 21 U.S.C. ? 352(a), specifically, Aranesp, in violation of the Food, Drug and Cosmetic Act (“FDCA”). In addition to the civil damages, Amgen will pay a $136 million fine and a $14 million forfeiture.

The government entities alleged that Amgen engaged in several improper marketing and pricing practices, including:

-- illegally marketing the drugs Aranesp, Enbrel and Neulasta;

-- illegally offering, paying or causing to be paid kickbacks for the purpose of influencing health care providers’ selection and utilization of Aranesp, Enbrel, Epogen, Neulasta, Neupogen and Sensipar for Medicaid recipients;

-- knowingly reporting inaccurate Average Sales Prices (ASPs) for Aranesp, Epogen, Neulasta and Neupogen;

-- knowingly reporting inaccurate Best Prices and Average Manufacturer Prices for Aranesp, Enbrel, Epogen, Neulasta, Neupogen and Sensipar by failing to include remuneration that was paid to health care providers and that was conditioned on purchase of Amgen products in violation of the Medicaid Rebate Statute, 42 U.S.C. ? 1396r-8.

As a condition of the settlement, Amgen will enter into a Corporate Integrity Agreement with the United States Department of Health and Human Services, Office of the Inspector General, which will closely monitor the company’s future marketing and sales practices.

This settlement is based on ten qui tam cases that were filed in the United States District Court for the District of Massachusetts, the United States District Court for the Eastern District of New York and the United States District Court for the Western District of Washington by private individuals who filed actions under state and federal false claims statutes.

A National Association of Medicaid Fraud Control Units team participated in the investigation and conducted the settlement negotiations with Amgen on behalf of the settling states. Team members included representatives from the Offices of the Attorneys General for the states of California, Massachusetts, Indiana, Illinois, New York and North Carolina. In announcing the settlement, Attorney General Gansler thanked Medicaid Fraud Control Unit Chief Auditor Ruth Jarrell for her work on this matter.

Source: Office of Md. Attorney General Douglas F. Gansler

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