For Immediate Release - October 30, 2009

Attorney General Martha Coakley's Office and 14 Other States File Court Action Against Biotech Company Amgen and Others

Complaint alleges Kickbacks to Medical Providers to Increase Sales of Blockbuster Anemia Drug Aranesp

BOSTON - Today, Massachusetts Attorney General Martha Coakley's Office, and 14 other states filed a joint complaint in federal court intervening against pharmaceutical manufacturer Amgen, International Nephrology Network (INN), a specialty group purchasing organization, and ASD Healthcare, a wholesaler. The complaint alleges the companies knowingly offered illegal kickbacks to medical providers to increase sales of Amgen's anemia drug, Aranesp, including offering free Aranesp product to medical providers and encouraging them to bill third party payers including the state Medicaid programs for the free Aranesp. Amgen is also alleged to have conspired with INN and ASD Healthcare to offer illegal kickbacks to medical providers, such as so-called "honoraria" to attend all-expense paid meetings with the intention and effect of increasing sales of Aranesp and converting new providers from competitor drugs to Aranesp.

"Taxpayers lose out when medical providers and pharmaceutical manufacturers operate outside of the boundaries of the law to pad bottom lines," said Attorney General Coakley. "Our office will continue to work in collaboration with our partners in state and federal law enforcement to identify kickback schemes in the health care market to ensure that Medicaid funds are not being obtained improperly."

In filing the complaint, Massachusetts was joined by California, Delaware, the District of Columbia, Florida, Hawaii, Illinois, Indiana, Louisiana, Michigan, Nevada, New Hampshire, New York, Tennessee, and Virginia.

As a result of the illegal inducements to increase sales of Aranesp, the complaint asserts the companies caused medical providers to falsely certify to state Medicaid programs that the providers were in compliance with federal and state anti-kickback statutes, which prohibits bribes to medical providers. Because compliance with these laws is a condition of payment by the Medicare and Medicaid programs, defendants allegedly caused thousands of ineligible claims for Aranesp to be paid and millions of dollars in damages to state Medicaid programs. This 15-state action joins a whistleblower suit filed in the United States District Court for the District of Massachusetts in 2006 which remained under seal while the federal and state governments investigated the allegations brought by a former Amgen sales and marketing professional. The United States Department of Justice continues to investigate these allegations.

Aranesp (darbepoetin alfa) is an erythropoiesis-stimulating agent (ESA), an injectable drug product developed and manufactured by Amgen to stimulate and boost the production of red blood cells in the body. It was approved by the Food and Drug Administration (FDA) in 2001 to treat anemia associated with chronic renal failure and in 2002 to treat chemotherapy-induced anemia in certain types of cancer patients. Aranesp has been a lucrative product for Amgen with total sales revenue reaching over $11 billion dollars since the drug was first introduced into the marketplace. The Medicare and Medicaid programs have paid hundreds of millions of dollars for Aranesp treatments.

Aranesp is not without risk to patients. In 2007, the FDA issued "black box" warnings (the most serious warning on a drug's label) that Aranesp treatment could increase the risk of death, serious cardiovascular events and increased tumor growth and cautioned physicians to use the lowest effective dose to achieve blood counts in a range to avoid blood transfusions, but not higher.

The case for Massachusetts is being handled by Assistant Attorney General Ann Ackil, of Attorney General Martha Coakley's Medicaid Fraud Division. The multi-state investigation was coordinated by a team appointed by the National Association of Medicaid Fraud Control Units that includes attorneys, investigators and auditors from New York, Massachusetts, Michigan, and California working in coordination with the ongoing federal investigation.