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Amgen: Drug Maker Bilks Medicare, Endangers Patients

November 3, 2009

Last Friday, the biotech drug company Amgen was sued by thirteen states for kickbacks it paid to boost sales of its controversial anemia drug Aranesp. The complaint alleges that the company gave the drug to doctors and encouraged them to fraudulently bill Medicare for the free samples. The drug is one in a class of anemia drugs that are the single biggest medication expense for the taxpayer-funded Medicare program. Sales of Aranesp have been around $3-4 billion annually.

A chilling allegation in the suit contends that Amgen urged doctors to “overfill” injections with Aranesp in order to boost sales volume and bilk Medicare. Some overfill is common with certain medications to insure against under-dosing patients by leaving a small amount of a drug behind. The suit against Amgen alleges the company urged unnecessary overfills well above recommended dosages, despite studies warning that high doses of Aranesp are associated with potentially lethal risks.

On the same day the lawsuit was filed, a new study reportedly found Aranesp could double the risk of stroke in certain patients, while providing little benefit. As the lead researcher stated, “The benefits we assumed we would have by treating anemia were less striking and the risks were more striking.”

In 2007, Aranesp was one of three Amgen drugs cited by the Food and Drug Administration (FDA) for an increased risk of blood clots, heart attacks and death in kidney patients, leading to the agency issuing new “black box” warning labels (the agency’s strongest warning) on the drugs. The agency had previously issued an alert warning of “serious and life threatening cardiovascular complications” for kidney patients taking the drug.

Earlier this year, a 2007 whistleblower suit against Amgen came to light, charging the company with kickbacks and illegally marketing Aranesp and other drugs for off-label uses. In 2008, Amgen paid $200 million to settle anti-trust charges that it illegally bundled drugs to force doctors to buy the company products instead of competing drugs. Ongoing pressure on the company later forced it to change pricing practices that encouraged over-prescribing of Aranesp and other risky drugs. Later in 2008, Amgen paid $200 million in fines and legal fees to settle a lawsuit by the state of Wisonsin alleging Medicaid fraud against the company. In the suit, Amgen was accused of reporting “grossly inflated” prices to boost its income from the state taxpayer paid fund.

Amgen’s annual revenue is about $15 billion, with about $4.2 billion profit in 2008. CEO Kevin Sharer took home a mere $14.5 million in 2008, down from his 2005 compensation of almost $34.5 million, primarily due to the decline in the value of stock options. Despite the stock decline, his “performance-based” bonus pay rose to nearly $3.8 million in 2008; he also took home $285 in retirement pay, $180,000 for personal uses of company aircraft, $26,000 for a car and driver, and $15,000 for personal finance planning.

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