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States sue Amgen, alleging drug kickback scheme

By   /   Friday, October 30th, 2009  /   Comments Off on States sue Amgen, alleging drug kickback scheme

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Thousand Oaks-based Amgen faces a lawsuit from New York, California and 13 other states alleging that the company took illegal kickbacks for Aranesp, one of the biotech firm’s top-selling kidney drugs.

The case, filed Oct. 29 in federal court and being led by New York, accuses Amgen, a purchasing group and a wholesale provider of offering kickbacks to medical providers to boost Aranesp’s sales, the New York Attorney General’s Office said in a press release.

The complaint alleges Amgen would pressure medical companies to bill Medicare for free Aranesp samples. It also accuses Amgen of providing “sham consultancy agreements” and “weekend retreats” to medical companies to persuade them to prescribe more Aranesp, the release said.

“In an egregious violation of the law, Amgen allegedly bribed medical providers and left taxpayers footing the bill for free drug samples,” New York Attorney General Andrew Cuomo said in a release.

An Amgen spokesman told news Bloomberg News and other outlets that the company believes the allegations have no merit and is reviewing the case.

Aranesp remains pivotal to the company. Even though its sales were down 20 percent in the third quarter, it still brought in $685 million of the company’s $3.7 billion in revenue, making it the company’s third-best-selling drug. Through cost cuts and healthy sales of other drugs, Amgen raked in a $1.4 billion profit last quarter, up 24 percent from a year earlier.

This is not the first setback for Amgen with Aranesp. The drug set off safety concerns in 2006 after some studies linked high doses to heart problems in some patients. That moved sparked a series of Food and Drug Administration examinations and a so-called “black box” warning label on the drug.

Sales of Aranesp declined, contributing to a slump that led the company to slash more than 1,000 jobs in the summer of 2007.
Amgen’s stock declined 1.2 percent to $53.62 on Oct. 30.

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