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February 19, 2013

Amgen Settlement and Corporate Integrity Agreement

Corporate Intergrity Agreements
Adding to the long list of pharmaceutical settlements involving off-label promotion, Amgen Inc., the world’s largest biotechnology company, recently entered into a settlement agreement with the U.S. Department of Justice to resolve criminal liability and false claim act allegations involving its improper promotion of certain drugs.  Amgen, a biotechnology company, agreed to pay $762 million—the single largest criminal and civil False Claims Act settlement involving a biotechnology company in U.S. history, according to the announcement.  

Amgen entered a guilty plea before U.S. District Judge Sterling Johnson of the Eastern District of New York to a criminal information charging the company with illegally introducing a misbranded drug, Aranesp, into interstate commerce.  Under the Food, Drug and Cosmetic Act (FDCA), it is illegal for drug companies to introduce into the marketplace drugs that the company intends will be used “off-label,” i.e., for uses or at doses not approved by the FDA.  The conduct occurred between 2002 and 2007.   

Aranesp is an erythropoiesis-stimulating agent (ESA) that was approved by the FDA in 2001 at calibrated doses for particular patient populations suffering from anemia.  In order to increase sales of Aranesp and reap the resulting profits, Amgen illegally sold the drug with the intention that it be used at off-label doses that the FDA had specifically considered and rejected, and for an off-label treatment that the FDA had never approved.  Under the terms of the criminal plea agreement, Amgen will pay a criminal fine of $136 million and criminal forfeiture in the amount of $14 million. 

Aranesp, remains one of Amgen’s largest drugs with sales of $2.3 billion in 2011.  Its sales, and that of a related older red blood cell booster Epogen, have declined significantly over the past few years amid safety concerns, stricter usage guidelines and reimbursement restrictions.  The government said the illegal practices were undertaken in part to help Amgen take market share from Johnson & Johnson's similar anemia drug Procrit. 

In particular, Amgen illegally introduced Aranesp into the oncology and nephrology ESA markets, intending that it be used for patients suffering from anemia due to chronic kidney disease or chemotherapy at off-label, unapproved doses that were larger and less frequently administered than those approved by the FDA for these patient populations.  Amgen also illegally introduced Aranesp into the oncology ESA market intending that it be used to treat anemia caused by cancer, irrespective of whether the patient had been prescribed chemotherapy - a use which the FDA had never approved and which the FDA subsequently determined caused an increased risk of death.   

In particular, in 2007, the FDA mandated that a “black box” label be added to Aranesp’s label, warning that Aranesp “increased the risk of death . . . in patients with active malignant disease [cancer] receiving neither chemotherapy nor radiation.”  At approximately the time that the FDA issued the black box warning, Amgen ceased its promotion of Aranesp for the treatment of anemia caused by cancer rather than the cancer’s treatment. 

Of particular interest, the United States contended that Amgen used journal articles that were insufficient to support the safety and efficacy of the off-label uses at issue, and improperly obtained listings in medical compendia in an effort to establish that the off-label uses were medically accepted, and thereby eligible for coverage by federal health care programs.  Specifically, Amgen sought and obtained the dosage’s listing in the U.S. Pharmacopeia’s Drug Information, a compendium allowing the Centers for Medicare and Medicaid Services (CMS) to reimburse for its off-label use, noted medpage Today

“As part of its strategy to increase sales of Aranesp, Amgen instructed its sales representatives to distribute laminated reprints of the Aranesp compendia listing for the [once monthly] QM dose to healthcare professionals with the intent that the healthcare professionals would use Aranesp for QM dosing," the criminal complaint read. 

For the civil settlement, Amgen has agreed to pay $612 million ($587.2 million to the United States and $24.8 million to the states) to resolve claims that it caused false claims to be submitted to Medicare, Medicaid and other government insurance programs.  The federal civil settlement agreement encompasses allegations that Amgen: (1) promoted Aranesp and two other drugs that it manufactured, Enbrel and Neulasta, for off-label uses and doses that were not approved by the FDA and not properly reimbursable by federal insurance programs; (2) offered illegal kickbacks to a wide range of entities in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal health care programs or were medically necessary; and  (3) engaged in false price reporting practices involving several of its drugs.   

“The government raised important concerns in the criminal prosecution. Amgen acknowledges that mistakes were made, and we did not live up to our standards,” Amgen SVP and chief compliance officer, Cynthia M. Patton, said in a statement. 

"I am pleased a settlement was reached to conclude this matter. With the emphasis and investment we have made in compliance,  I am confident about Amgen's continued adherence to the provisions in this agreement," said Robert A. Bradway, chief executive officer at Amgen. "Amgen remains dedicated to advancing science to dramatically improve people's lives. We are committed to meeting the expectations of the government and the healthcare community as we fulfill our mission in serving the needs of patients.”  It remains yet to be seen whether HHS-OIG will attempt toe exclude any Amgen executives, as was the case for Purdue Pharma and several other recent cases.  

Corporate Integrity Agreement  

As part of the global settlement, Amgen has also agreed to enter into a 98-page Corporate Integrity Agreement (CIA) with HHS-OIG that will govern its conduct, and ensure careful oversight of its branding and marketing practices.  The five-year CIA includes provisions designed to increase accountability of individuals and Board members, to increase transparency, and to strengthen Amgen’s compliance program.  Reuters noted that corporate officers will be “on the hook” for compliance failures within that five-year period, prosecutors said. 

The CIA requires that a committee of Amgen’s board of directors annually review the effectiveness of the company’s compliance program and that executives in key areas certify to compliance.  It also requires that Amgen post on its company website information about payments to doctors.  Under the CIA, Amgen must establish and maintain a centralized risk assessment and mitigation program and policies relating to research, publications and Amgen’s interactions with federal payors.   The CIA has the following requirements for independent medical education.   

  • all Independent Medical Education activity funding requests are reviewed, tracked, and evaluated by the centralized Healthcare Compliance Operations organization to ensure that the request meets compliance criteria;
  • funding decisions are based on objective criteria such as the qualifications of the requestor, the quality of the Independent Medical Education activity program, and pre-established educational goals;
  • Independent Medical Education activity funding is provided only pursuant to a written agreement with the funding recipient, and payments to the Independent Medical Education activity funding recipient are consistent with the written agreement; and
  • Independent Medical Education activity programs funded by Amgen are developed and implemented independently of Amgen staff involvement 

Amgen must monitor at least 30 Independent Medical Education activities.  In the period January 1, 2013 through December 31, 2013, Monitoring Personnel from Amgen must attend and review at least 150 speaker programs. 

Amgen must continue to post, on a quarterly basis, on its company website the following information with respect to all independent medical education grants and healthcare donations: (i) the name of the recipient; (ii) the program name; and (iii) the amount of the grant or donation. 

Whistleblower Case 

The government built its case on testimony from and evidence gathered surreptitiously by whistleblowers—in particular, Milwaukee rep Jill Osiecki, who wore a wire to sales meetings at the behest of HHS investigators, noted MMM.  Osiecki told the New York Times that when she joined the firm in 1990, it had “good science, good products, strong ethics,” but that corporate culture changed for the worse around 2000, “when new management came in and Aranesp was approved, setting up a fierce marketing battle with Johnson & Johnson and its rival anemia drug, Procrit,” the Times reported.  That was the year that Kevin Sharer took over as CEO of the company. He was succeeded in that role, and subsequently as chairman, this year by Robert Bradaway, and is due to retire from the board of directors at the end of the year.  

Osiecki told the Times that reps were instructed to make “homemade bread” presentations to docs, so that the spreadsheets couldn’t be pinned on the company, and advised not to leave presentations behind after events.  Disgusted, she contacted HHS’s Office of the Inspector General in August 2004 to report these practices.  HHS OIG asked her to wear a wire, and she did, letting the department monitor 13 events over the course of 15 months.  She said she was fired in 2005 after revealing that she had held on to a potentially incriminating voice mail message.  

“I’d hear speakers jokingly tell participants to turn off their tape recorders, or express the hope that no one was recording their session,” said Jill Osiecki, a former rep who recorded 13 meetings for federal investigators.  “Those comments were always followed by uproarious laughter.”  That’s the most sensational bit of Osiecki’s official statement to the press.   

Osiecki filed her whistleblower suit in 2004 and helped the feds gather evidence of Amgen’s marketing misbehavior. Other whistleblowers also filed suit, accusing the company of paying kickbacks, in the form of free doses doctors could sell for extra profit, and promoting off-label use of Aranesp, the anemia drug, and Enbrel, an arthritis and psoriasis treatment, as well as other drugs. 

Assembling a viable case against Amgen--or any drugmaker engaged in marketing misbehavior--isn't easy, Osiecki points out in her statement.   “I’ve seen how difficult and expensive it is to discover and prosecute the fraud I witnessed,” she said.  “Without insiders who can provide a road map ... the [g]overnment may not be able to stop the illegal behavior.” 

Another whistleblower in the case—Kassie Westmoreland, a former Amgen sales representative—claimed that Amgen had overfilled vials of Aranesp as a way of providing doctors with free medicine.  The doctors could bill Medicare and private insurers for this extra amount, providing the doctors with more profit.  The suit said that this was intended to induce doctors to buy Aranesp for their practices rather than Procrit, a competing anemia drug from Johnson & Johnson.

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