AmerisourceBergen and its subsidiaries have agreed to pay $625 million to resolve its civil liability to the United States under the False Claims Act for causing false claims for the drugs it repackaged to be submitted to federal health care programs.
Last year, AmerisourceBergen Specialty Group, a wholly-owned subsidiary of AmerisourceBergen Corporation, pled guilty to illegally distributing misbranded drugs and agreed to pay $260 million to resolve criminal liability for its distribution of these drugs from a facility that was not registered with the Food and Drug Administration. Under the settlement terms announced Oct. 1, AmerisourceBergen Corporation will pay $581.8 million, plus accrued interest to the federal government, and $43.2 million, plus accrued interest to state Medicaid programs.
“The $885 million combined civil and criminal resolution with AmerisourceBergen Corporation underscores our determination to utilize all tools at our disposal to pursue illicit schemes that seek to profit from circumvention of important safeguards designed to protect the nation’s drug supply,” said Assistant Attorney General Joseph Hunt of the Department of Justice’s Civil Division.
The allegations arise from the company’s operation of a facility that improperly repackaged oncology-supportive injectable drugs into pre-filled syringes and improperly distributed those syringes to physicians treating vulnerable cancer patients. The United States contends that AmerisourceBergen Corporation sought to profit from the excess drug product contained within the original FDA-approved sterile vials for these cancer supportive injectable drugs by establishing a pre-filled syringe program through a subsidiary that it claimed was a pharmacy.
The “pharmacy,” in reality, was a repackaging operation that created and shipped millions of pre-filled syringes to oncology practices for administration to cancer-stricken patients, the government claimed. As part of this operation, AmerisourceBergen Corporation purchased original vials from their respective manufacturers, broke their sterility, pooled the contents, and repackaged the drugs into pre-filled syringes.
AmerisourceBergen Corporation never submitted any safety, stability, or sterility data to the FDA to show that its operation ensured the safety and efficacy of the repackaged drug products, according to the allegations.
In addition, the United States alleged that AmerisourceBergen Corporation’s scheme enabled it to bill multiple health care providers for the same exact same vial of drug, causing some of those providers to bill the federal health care programs for the same vial more than once. The scheme also allegedly enabled the company to increase its market share by offering various product discounts, which it leveraged to obtain new customers and to keep existing customers buying its entire portfolio of oncology drugs.
The settlement also resolves allegations that AmerisourceBergen Corporation gave kickbacks to physicians to induce them to purchase Procrit through the pre-filled syringe program. The alleged kickbacks were in the form of general pharmacy credits provided to customers, but which were not identifiable as specific to Procrit on the invoice.