Attorney General Peter F. Kilmartin announced today that Rhode Island has joined with other states and the federal government and reached agreement with Amgen, Inc. ("Amgen") to settle allegations that Amgen engaged in various illegal marketing practices to promote sales of the drugs Aranesp, Enbrel, Epogen, Neulasta, Neupogen and Sensipar and inaccurately reported and manipulated prices for these drugs causing the submission of false claims.
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. Under the terms of the settlement, Rhode Island's state/federal share will be $54,286.
In 2012, the Attorney General's Medicaid Fraud and Patient Abuse Unit settled 13 joint federal/state investigations into illegal practices by pharmaceutical companies that saw Rhode Island's state/federal program share of approximately $10 million in restitution and recovery.
"Waste and fraud in our Medicaid system is not only perpetrated by individuals. Some of the biggest perpetrators of Medicaid fraud are pharmaceutical companies who illegally market products to promote sales, engage in kickbacks, and pad their bottom line with taxpayer dollars," said Attorney General Kilmartin. "Our Medicaid Fraud and Patient Abuse Unit will continue to work to bring greater accountability and transparency to our Medicaid system."
In addition, Amgen has agreed to plead guilty to an information to be filed by the 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").
The government entities alleged that Amgen engaged in several improper marketing and pricing practices that included the following:
- Amgen illegally marketed the drugs Aranesp, Enbrel and Neulasta;
- Amgen illegally offered, paid or caused 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;
- Amgen knowing reported inaccurate Average Sales Prices ("ASP") for Aranesp, Epogen, Neulasta and Neupogen;
- Amgen knowingly reported inaccurate Best Prices and AMPS 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.