Amgen: A Rebate Target Behind the Drug Switch

In the Amgen Aranesp nursing homes fraud case, Amgen Inc. agreed to pay $24.9 million to resolve allegations that it paid pharmacy kickbacks to switch Medicare and Medicaid beneficiaries to Aranesp. The alleged arrangement reached into medication reviews, requests to physicians and employee bonuses. Taxpayers funded the prescriptions while nursing-home residents faced drug switches driven by the pharmacy’s rebate targets.

Amgen manufactures and sells Aranesp. The government alleged that it paid long-term-care pharmacy providers Omnicare, PharMerica and Kindred Healthcare to implement therapeutic interchange programs.

An Amgen corporate account manager brought the qui tam case in South Carolina. The complaint describes the whistleblower as a former director of Amgen’s Long Term Care/Home Health Care division who had managed the Aranesp sales team. That role put the pharmacy contracts and the effort to increase prescriptions within the same person’s view.

How the Aranesp Interchange Worked

The alleged Aranesp therapeutic interchange moved patients from Procrit to Aranesp, with pharmacy rebates tied to purchase volume or market share. The complaint explains why a manufacturer would pursue that business through a pharmacy: nursing homes contracted for drugs, consultant-pharmacist services, educational programs and treatment protocols. The pharmacy had access to the people making medication decisions throughout the facility.

The rebate schedule made the sales target concrete. According to the complaint, Omnicare could earn a 3% rebate by purchasing at least $9,900,000 of Aranesp from October 1 through December 31, 2005. Purchases of at least $13,400,000 qualified for a 23% rebate. Amgen allegedly calculated the rebate by multiplying purchases by the applicable percentage and also offered a rebate tied to Aranesp’s market share against Procrit.

The rebate rewarded total purchases for the quarter. A drug switch could help the pharmacy reach a better rate on all those purchases.

The complaint alleges that nursing homes complained about repeated requests to move patients back and forth between the competing drugs. Their objection was specific: the switches followed the rebates available to Omnicare, rather than patient care or prices that helped the nursing homes.

Medication Reviews and Bonuses Carried the Switch

The complaint alleges that Amgen and the pharmacies used recurring medication reviews to encourage physicians to switch patients to Aranesp. Consultant pharmacists’ reviews gave the interchange program a regular opportunity to reach the prescribing physician.

At PharMerica, the complaint describes a Houston Clinical HUB staffed with nurses and other healthcare professionals who contacted physicians by phone and mail. Regional scorecards tracked interchange success and helped determine employee bonuses. A PharMerica memorandum quoted in the complaint put the financial objective plainly:

Amgen’s own sales incentives allegedly reached into facility protocols. The complaint describes a contest that awarded employees credit for the number of beds in nursing homes adopting anemia protocols developed or influenced by Amgen. Employees with the most points earned bonuses. A facility’s decision to adopt a treatment protocol became a sales employee’s score.

That route through the consultant pharmacist also appears in a separate PharMerica settlement involving Abbott’s Depakote. The government alleged that rebates, educational grants and financial support encouraged recommendations for Depakote during monthly medication reviews. The recurring review gave manufacturer money a way to influence prescribing beyond a sales representative’s own visits.

When Anemia Education Had a Sales Target

The government alleged that Amgen distributed material to consultant pharmacists and nursing-home staff encouraging Aranesp use for patients without anemia associated with chronic renal failure.

The educational programs allegedly served those sales goals too. According to the complaint, sales and marketing personnel chose speakers, Amgen trained them on company scripts and PowerPoint slides, and speakers were told to stay with those materials. Grants, honoraria, speaker fees and paid travel targeted physicians, consultant pharmacists and nursing administrative coordinators.

An email from Amgen’s corporate accounts director, quoted in the complaint, shows the concern when anemia education might help a competing drug:

The concern in that message was which product the education would sell. The complaint also alleges that Amgen routed some grants through health care associations and pharmacies so that speaker fees appeared to come from those intermediaries.

The Manufacturer and the Pharmacies Settled Separately

The Justice Department announced Amgen’s civil settlement on April 16, 2013, resolving the manufacturer’s part of the whistleblower case filed in the U.S. District Court for the District of South Carolina.

Omnicare later agreed to pay $4.19 million in its own settlement, announced February 27, 2014. That agreement concerned alleged receipts of rebates, grants, speaker and consulting payments, data fees, meals and travel tied to switching Medicaid beneficiaries to Aranesp.

PharMerica agreed to a separate $2.5 million settlement, announced December 23, 2015. The Justice Department put the combined settlements at just over $31.5 million, with the manufacturer’s payment larger than either pharmacy’s.

What Evidence Is Needed to Prove Fraud?

For an Aranesp pharmacy-kickback case, we look for the connection between the rebate contract, the prescription change and the government claim. The complaint shows where insiders saw that connection: purchasing thresholds, instructions to consultant pharmacists, physician request forms, speaker materials and scorecards tying results to bonuses.

The payment path matters too. A nursing home’s pharmacy contractor can be affiliated or independent, and consolidated billing can leave the facility responsible for paying the vendor. We connect the pharmacy’s financial benefit to the resident’s prescription and the payer for that service. The contract, the clinical decision and the claim each answer a different part of the question.

An account manager may know who approved the rebate terms and promotional budget. A consultant pharmacist may know how a medication recommendation was generated. A facility or billing employee may see the prescription change and the payment record. Our work is to connect those views into a case about how the financial arrangement affected government-paid prescriptions.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The Justice Department also reported a whistleblower reward from Omnicare’s settlement in this case.

You Saw How the Switch Was Sold

If you worked with pharmacy rebates, interchange programs or manufacturer-funded education, tell our whistleblower experts how the drug switch was sold. We build your strongest case with you, bring in pharmaceutical kickback whistleblower lawyers who understand nursing-home prescribing, and stay with you from the first review through the pursuit of a recovery.