Biotech Giant Will Pay Massive Settlement For Illegally Promoting Drugs And Committing Insurance Fraud

In a case that encompasses illegal drug promotion, corporate kickbacks to doctors, and pre-meditated Medicare fraud, Los Angeles Times reports that biotech and pharmaceutical conglomerate Amgen will be fined $762 million after pleading guilty to allegations of improper drug marketing.

Kassie Westmoreland, a former Amgen employee and a whistleblower in the suit, was one of several people to charge that Amgen promoted the anemia-treatment drug Aranesp for off-label use and overfilled doctors’ promotional samples of the drug. In a brazen twist, Westmoreland also claims that the company orchestrated a collusive scheme to allow doctors to fraudulently profit off of their patients’ drug benefits:

[Westmoreland’s] suit charged that Amgen overfilled vials of Aranesp to supply doctors with extra medicine at no charge. She alleged the company then encouraged doctors to bill Medicare and private insurers for this surplus amount, reaping them extra profit. Amgen pursued this strategy to take business away from Procrit, a popular anemia drug sold by Johnson & Johnson, according to the suit.

The Westmoreland case cited internal spreadsheets used by Amgen sales representatives to allegedly show doctors how much more money they could make from the overfills.

“Amgen provided extra product in the Aranesp vials as a liquid kickback that doctors could then cash in with federal and state governments through Medicare and Medicaid reimbursements,” said Charles Kester, a Calabasas attorney who represents Westmoreland along with law firms in Boston and Washington, D.C. “Amgen is being held to account in a serious way for its choices to market this drug unlawfully.”

Amgen’s penalties highlight the fact that most federal health care settlements stem from Medicare fraud and pharmaceutical misconduct. While doctors can prescribe drugs for off-label use, it is illegal for pharmaceutical companies to advertise drugs for purposes other than what the Food and Drug Administration (FDA) has approved. But settlements of this kind — and the government’s ability to crack down on drug makers’ practices that may threaten public health — could soon be a thing of the past.

A recent appellate court ruling in favor of the pharmaceutical industries’ right to promote their products as they see fit has set the stage for a Supreme Court showdown over drug makers’ First Amendment rights — and opens up big questions about how stringently the FDA can regulate Big Pharma.