Fifteen states have filed a lawsuit against Amgen Inc., the biotech giant, accusing the company of offering kickbacks to medical providers to boost sales across the country of its anemia drug Aranesp. This is a drug that has been beset by safety concerns. In a suit, filed in federal court in Massachusetts, the states accuse Amgen sales representatives of encouraging doctors and other healthcare providers to bill insurers for Aranesp that the practitioners received free from the company.
The practice, which the suit contends was known to Amgen’s upper management, is said to have cost taxpayer-funded Medicaid programs and other insurers millions of dollars in overpayments. The suit also alleges that Amgen, which is based in Thousand Oaks, California, conspired with two other Defendants – ASD Healthcare (a drug wholesaler) and International Nephrology (a group drug-purchasing network) – to offer “illegal inducements” to medical providers to increase sales of Aranesp. These allegedly included sham consulting agreements, weekend retreats and other rewards.
Anemia drugs, including Aranesp and two others produced by Amgen — Epogen and Procrit — are given to kidney disease and cancer patients to boost red blood cell production and raise hemoglobin levels. According to a report on a 2006 Congressional hearing, the drugs are the single biggest medication expense for the Medicare program.
The recently-filed lawsuit against Amgen focuses on a practice known as “overfill.” Aranesp is often sold in one-dose vials. Pharmaceutical industry standards require that drug makers include a small amount of medicine in excess of the prescribed dosage — known as overfill — in such vials, according to the suit. However, the suit alleges that at least as far back as 2002, Amgen manufactured Aranesp with overfills that were well above the recommended amounts. According to the suit, the overfill allowed doctors, hospitals and other medical providers to bill their patients’ insurers for medicine that the provider had essentially gotten free. It’s alleged in the suit that: “In offering the overfill inducement to medical providers, Amgen’s sales force encouraged medical providers to administer higher doses of Aranesp to patients without any clinical need for that higher dose.”
Amgen prepared spreadsheets calculating potential revenue from overfill billings that the drug maker’s sales reps could show to their clients during office visits, the lawsuit contends. In the suit, one Amgen saleswoman alleges that she was trained “how to show medical providers the overfill and other economic incentives without leaving any documentation behind.” The lawsuit describes alleged instances of New York healthcare facilities submitting Medicaid reimbursement claims for Aranesp that were ineligible for payment because Amgen’s alleged overfill practices violated the state’s anti-kickback laws.
The states involved in the lawsuit accuse Amgen of violating a variety of state laws, including fraud, false claims and unjust-enrichment statutes. The suit is seeking triple damages and civil penalties, which in some states amount to $10,000 per violation.
Source: Los Angeles Times
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