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Dec 19, 2012

Amgen Pleads Guilty, Offers $762M

  • Amgen will pay the federal government $762 million to settle charges that it improperly promoted off-label uses for the anemia drug Aranesp (darbepoetin alfa), adding another conviction of a biopharma giant to the U.S. Department of Justice (DoJ)’s ongoing probe of industry marketing practices

    The biotech pioneer agreed in a plea deal to a $14 million criminal forfeiture of its gains, as well as a $136 million criminal fine and $612 million civil fine. In the U.S. District Court for the Eastern District of New York yesterday, Amgen pleaded to a single DoJ misdemeanor charge that it misbranded Aranesp by selling it for uses not approved by FDA. During the third quarter of last year, Amgen said it set aside $780 million to settle the federal charges—a sum that rose to $806 million earlier this year.

    As part of the deal, Amgen also agreed to require its day-to-day executives and members of its Board of Directors to certify compliance with regulations, implement new rules to promote greater transparency, and hold corporate officers accountable for failures in compliance over five years. Those requirements are spelled out in a five-year corporate integrity agreement Amgen also agreed to enter into with the Office of Inspector General of the U.S. Department of Health and Human Services.

    U.S. District Judge Sterling Johnson, Jr., was expected to decide today if he accepted the plea deal.

    DoJ accused Amgen of promoting Aranesp for the off-label use of anemia caused by cancer, rather than the approved use of anemia as a side effect of chemotherapy treatments. The company was also accused of pushing higher doses and more varied treatment schedules than permitted by the once-weekly drug's label, which calls primarily for treating anemia caused by chemo as well as the original indication of anemia caused by kidney failure, for which the drug was originally approved in 2001.

    Aranesp generated $2.3 billion in sales in 2011, making it one of Amgen’s best-selling drugs. DoJ alleged that Amgen’s actions stemmed from a competitive motive—namely to seize market share captured by the Johnson & Johnson anemia drug Procrit.

    If the Amgen plea deal is accepted, DoJ will have collected more than $14.5 billion from biopharma companies and others accused of mismarketing their prescription drugs. The biggest recovery was the $3 billion fine GlaxoSmithKline agreed to pay DoJ last July after pleading guilty to charges that it improperly promoted its Paxil and Wellbutrin antidepressants for unapproved uses, and failed to report safety data about the diabetes drug Avandia. In addition, Johnson & Johnson paid $2 billion, and Abbott Laboratories, $1.6 billion following charges of improper marketing.


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