$24.9 Million Settlement with Biotechnology Company Amgen, Inc. Resolves South Carolina False Claims Act Lawsuit

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April 16, 2013
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COLUMBIA, South Carolina —-United States Attorney Bill Nettles announced a $24.9 million settlement with Amgen, Inc., a California based biotechnology company. Amgen, Inc. agreed to the settlement to address allegations it paid kickbacks to long-term care pharmacy providers Omnicare Inc., PharMerica Corporation, and Kindred Healthcare Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicare and Medicaid beneficiaries from a competitor drug to Aranesp. The Government alleged that the kickbacks took the form of performance-based rebates on Aranesp. As part of that program, the Government alleged that Amgen distributed materials designed to recommend Aranesp’s use in patients who did not have “anemia associated with chronic renal failure,” as specified in the approved labeling for Aranesp.

The Government alleged that the kickbacks took the form of performance-based rebates on Aranesp.

The District of South Carolina began investigating these False Claims Act allegations in the summer of 2010. In particular, the investigation focused on whether Aranesp was marketed to patients, many of whom were in skilled nursing facilities, who did not have “anemia associated with chronic renal failure.”

The False Claims Act allows the government to bring civil actions against entities that knowingly use or cause the use of false documents to obtain money from the government or to conceal an obligation to pay money to the government. The lawsuit in this case was initially filed by an Amgen employee under the qui tam or whistleblower provision of the False Claims Act. This provision entitles a private person to bring a lawsuit on behalf of the United States, where the private person has information that the named defendant has knowingly violated the False Claims Act. Under the False Claims Act, the private person, also known as a “whistleblower,” is entitled to a share of the government’s recovery. In this matter, the whistleblower shall receive over $3 million from the proceeds of the settlement.

“By this agreement we are making important strides in holding drug manufacturers accountable for fraudulent and abusive practices not only in South Carolina, but nationwide. I am proud of the tireless work of this office to investigate this case across the country,” said U.S. Attorney Nettles.

This settlement was the result of a coordinated effort by Assistant United States Attorneys Fran Trapp and James Leventis of the U.S. Attorney’s Office for the District of South Carolina, along with the Commercial Litigation Branch of the Justice Department’s Civil Division, FDA’s Office of Inspector General, HHS’s Office of Inspector General, and Defense Criminal Investigating Service, who diligently worked to investigate the allegations and litigate the case.

The whistleblower was represented by South Carolina attorney Richard Harpootlian along with Reuben Guttman and Traci Buschner, of Guttman, Buschner & Brooks PLLC.