By Jessica Dye
NEW YORK, Dec 18 (Reuters) - Amgen Inc pleaded guilty in a
New York federal court on Tuesday for improper marketing
practices involving its once top-selling Aranesp anemia drug,
and prosecutors said the company has agreed to pay $762 million
in a civil settlement and criminal fines.
The world's largest biotechnology company had set aside
funds it expected to have to pay as a result of federal and
state investigations, as well as nearly a dozen civil
whistleblower lawsuits.
Federal prosecutors said in court that the company had
agreed to pay $612 million in a civil settlement, a $14 million
criminal forfeiture payment, and a $136 million criminal fine.
Amgen entered the guilty plea to one misdemeanor count.
Acting U.S. attorney Marshall Miller confirmed that under the
agreement Amgen will not lose any federal business or contracts.
Exclusion from federal programs, such as Medicare, could have
crippled its business.
As part of the deal, Amgen will enter into a five-year
corporate integrity agreement with the Office of Inspector
General of the U.S. Department of Health and Human Services,
prosecutors said. The agreement will require Amgen's executives
and members of its board of directors to certify compliance with
applicable regulations, institute new transparency measures and
put corporate officers "on the hook" for compliance failures
within that five-year period, prosecutors said.
The plea agreement must be approved by U.S. District Judge
Sterling Johnson. He has scheduled a hearing for Wednesday
morning.
Aranesp, primarily used to treat anemia in cancer patients
undergoing chemotherapy, 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.
Amgen was accused of promoting Aranesp for anemia caused by
cancer, for which it was not approved, rather than to combat
anemia as a side effect of chemotherapy treatments. The company
was also accused of pushing higher doses and more convenient
treatment schedules than what was approved in the drug's label
for both cancer and chronic kidney disease patients.
The government said the illegal practices were undertaken in
part to help Amgen take market share from Johnson & Johnson's
similar anemia drug Procrit.
Amgen was "pursuing profits at the risk of patients'
safety," Miller told reporters Tuesday after the plea hearing.
He added that while the company "circumvented the FDA approval
process," the investigation had not uncovered any evidence of
fraudulent intent on Amgen's part.
Federal prosecutors declined to comment further on the civil
portion of the settlement, which they said is still under seal.
A spokeswoman for the company, based in Thousand Oaks,
California, said that if the judge accepts the criminal plea
tomorrow, "Amgen expects immediately thereafter to complete the
comprehensive resolution of related civil and criminal matters,"
for which it had previously recorded a $780 million charge in
the third quarter of 2011.
In a recent regulatory filing with the U.S. Securities and
Exchange Commission, Amgen said it had accrued $806 million
related to the proposed settlement of charges arising out of the
federal civil and criminal investigations.
Amgen shares were down 14 cents at $89.36 in late morning
trading on the New York Stock Exchange.
(Additional reporting by Bill Berkrot and Caroline Humer)
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