Biotech Giant Amgen Sued Over Kickback Schemes

November 2, 2009 Updated: November 3, 2009

New York and 14 other states sued biotech giant Amgen Inc. last Friday for giving medical personnel kickbacks to boost the sales of its anemia drug Aranesp.

The lawsuit is the latest in a string of recent governmental scrutiny over the pharmaceutical industry for improper marketing of drugs.

New York Attorney General Andrew Cuomo filed the lawsuit in the federal court in Massachusetts, and alleged that two subsidiaries of AmerisourceBergen Corp. also conspired with Amgen.

The suit accused Amgen and Amerisource of encouraging doctors and medical professionals to bill third-party insurers on Aranesp samples they received for free. The companies also allegedly offered medical professionals kickbacks, weekend retreats, and other perks for selling its drug.

The Amerisource subsidiaries named were International Nephrology Network (INN), a specialty group purchasing organization, and ASD Healthcare, a drug wholesaler.

“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,” Cuomo said in a statement. “In an egregious violation of the law, Amgen allegedly bribed medical providers and left taxpayers footing the bill for free drug samples.”

Cuomo said that the illegal billings cost the taxpayer-funded program Medicaid and other insurers millions of dollars a year.

In a statement, the Thousand Oaks, Calif.-based Amgen called the lawsuits “without merit.”

Arnesp supposedly boosts red blood cell production for patients with kidney diseases. But the drug has come under scrutiny as higher doses could increase the risk of stroke and heart attacks, according to the Food and Drug Administration (FDA).

Sales of the anemia drug have been falling, according to Amgen’s financial records. Last year, sales totaled $3.1 billion, a 25-percent decrease from 2006 levels.

Recent Spate of Fines

Lawmakers have accused several large pharmaceutical companies over the past several months of illicit drug marketing and other activities to boost drug sales.

Last week, AstraZeneca revealed that it paid over $500 million to settle two federal investigations over illegal marketing of its psychiatric drug Seroquel. The government accused the company of marketing the drug to children and the elderly, which was not approved by the FDA. In a Securities and Exchange Commission filing, AstraZeneca said that it received more than 14,000 complaints of users that received health complications from using the drug.

In September, New York-based Pfizer Inc. was fined a record $2.3 billion for promoting a number of drugs for unapproved uses. Eli Lilly & Co., earlier this year, paid a then record $1.4 billion to settle allegations of illegal marketing of Zyprexa, an anti-psychotic drug.

Doctors sometimes prescribe drugs for “off-the-label” usage, usually for rare diseases and those that are hard to treat. However, the FDA prohibits drug companies from promoting such uses.