Amgen: The Sales Spreadsheets Reps Were Told Not to Keep

The 2012 Amgen fraud settlement included a $612 million civil agreement over allegations of off-label promotion, kickbacks and false drug-price reporting. The complaints describe sales representatives selling the profit on an injection, discounts kept off invoices, and promotional material presented as an answer to a doctor’s unsolicited question.

Amgen’s pharmaceutical fraud cases also include separate settlements over Xgeva survey payments in 2013 and patient-assistance funds in 2019. Each involved allegations that company spending drove prescriptions and government payments. Taxpayers were paying for drug choices the government said Amgen paid to influence.

What Was the Amgen Fraud Settlement?

The Department of Justice’s December 19, 2012 announcement described allegations that Amgen caused false claims to Medicare, Medicaid and other government health care programs through drug promotion, kickbacks and inaccurate prices. The promotion allegations covered Aranesp, Enbrel and Neulasta, while the price-reporting allegations involved several drugs.

Whistleblowers brought ten False Claims Act cases resolved by that agreement.

How Did Aranesp Promotion Reach Government Reimbursement?

The government’s civil allegation was that Amgen promoted Aranesp for uses and dosing regimens that lacked Food and Drug Administration approval and were not medically accepted, then sought to make those uses eligible for federal coverage. The alleged conduct ran from September 2001 through September 2011. It included promoting the anemia drug for anemia caused by cancer, anemia caused by chronic disease, chronic anemia and anemia caused by myelodysplastic syndrome.

The link between off-label promotion and government reimbursement was unusually concrete. The United States alleged that Amgen used journal articles insufficient to support the safety and effectiveness of the promoted uses and improperly obtained listings in medical compendia, the drug reference works used in coverage decisions. A sales message could reach the doctor through a journal article, then reach the payment decision through a reference listing.

The Question the Sales Representative Was Supposed to Elicit

A whistleblower complaint alleged that Amgen representatives used an unbranded piece about anemia of cancer to prompt a doctor to ask about Aranesp. Once the doctor asked, the representative could present material promoting that use. In the third amended complaint, the alleged instruction was to engineer an “unsolicited question.”

The same complaint alleged that sales management expected off-label materials to appear at almost every physician meeting, even in response to an ordinary greeting about what was new. The sales representative was allegedly helping create the request that supposedly justified the response. Training materials and instructions about when to present a study could therefore show more than the study handed to the doctor.

Another whistleblower complaint alleged that Amgen and the publishers of drug compendia conspired to ghostwrite articles promoting Aranesp for anemia of cancer using false and misleading science. It alleged that tainted studies supported compendia entries that the government then used for reimbursement decisions. The allegation connects the publication effort to the payment: the article supplied support for the listing, and the listing supplied support for coverage.

There is a practical data problem here, too. The 2018 Managed Care article Indication-Specific Drug Pricing–Simple in Theory, Complex in Reality describes a gap between medical records and dispensing data: the reason for prescribing a drug may appear in the medical record but go uncaptured when the drug is dispensed. Where that information is missing, a drug name on a payment record tells less than the treatment record and the promotional material together. In the Aranesp allegations, the particular use was central to the claim for coverage.

The Profit on the Injection

The complaints also alleged that Amgen sold providers on the difference between their drug acquisition cost and their reimbursement. That spread puts a sales pitch inside the provider’s own economics. A lower purchase cost, free product or a higher payment could increase what the provider kept from administering the drug.

One amended complaint alleged that the spreadsheets explaining that profit came with instructions about where they must not remain:

In that account, the sales tool was also evidence the representatives were told not to keep.

The same complaint alleged that off-invoice discounts let providers show a Medicare auditor a purchase price higher than what they had actually paid. The invoice, in that account, showed only part of the deal.

The complaint also alleged that overfill in Aranesp, Epogen and Neupogen vials gave providers extra drug they could bill to Medicare. It described free goods billed to third-party payors and price protection that allegedly kept acquisition costs unchanged while reimbursement rose.

The other complaint described hospital rebates tied to growth in Amgen’s market share. It also alleged that representatives encouraged institutions to move administration of Amgen products to associated clinics with higher reimbursement.

The civil settlement covered allegations that Amgen knowingly reported inaccurate average sales price, average manufacturer price and Best Price figures used in Medicare payments and Medicaid rebates. A complaint further alleged that Amgen passed rebates and discounts through group purchasing organizations and wholesalers to conceal them from price reporting. The allegedly hidden discount could benefit the buyer while leaving the government working from a different price.

What Did the Xgeva Deep Dive Surveys Pay For?

The Xgeva Deep Dive allegations concerned payments restricted to doctors who prescribed Amgen’s drug. On July 11, 2013, the Justice Department announced that Amgen paid more than $15 million to resolve allegations that it used financial incentives to induce Xgeva prescriptions. Xgeva is used in patients with metastatic bone disease to prevent skeletal complications.

The original Deep Dive plan called for doctors to complete a short Internet survey about how they treated patients with bone cancer, including which drugs they used. Payment was supposed to be available whether or not a doctor prescribed Xgeva. According to the government, Amgen changed the design: it increased the payment and offered it only to doctors who prescribed Xgeva.

That change made the drug choice a condition of getting paid. The government also said the Xgeva marketing team could access the identities of participating doctors, even though it was not supposed to know them.

The whistleblower complaint alleged a particularly direct example at an oncology practice: a data agreement paid the practice $200 per patient put on Xgeva, making the margin favorable and prompting plans to prescribe more. The complaint described the role of the intermediary, P4, this way:

The government’s allegations also covered cash honoraria for oncologists and urologists taking part in audience-response sessions, market-research surveys and advisory programs promoting Xgeva. The label on the payment was research. The alleged purpose was more prescriptions.

A parallel appears in Biogen’s physician-payment settlement, which covered alleged speaker honoraria, training and consulting fees, and meals intended to induce prescriptions. Amgen’s survey case adds a particularly useful detail to that pattern: the government identified a change in who could qualify for payment. For an insider, the earlier and later program designs can explain what the payment was intended to buy.

How Did the Patient-Assistance Funds Work?

Amgen’s patient-assistance settlement covered alleged use of foundation funding to benefit patients taking its own products. The April 25, 2019 announcement put Amgen’s civil settlement at $24.75 million. The allegations involved a Sensipar copay fund and a Kyprolis travel fund. As part of the settlement, Amgen entered a five-year corporate integrity agreement requiring measures, controls and monitoring designed to promote its independence from any patient assistance programs to which it donates, a risk assessment program, and compliance-related certifications from executives and board members.

Sensipar and the Cost of Giving the Drug Away

The government alleged that a secondary-hyperparathyroidism fund supported only Sensipar. According to the government, Amgen stopped donating in late 2011 to a foundation that supported patients taking any of several secondary-hyperparathyroidism drugs, worked with a new foundation to set the new fund’s coverage, and was the fund’s sole donor when it launched in November 2011. Until June 2014, the fund covered only Sensipar. It also alleged that Amgen’s payments to the fund exceeded what it would have cost the company to provide free Sensipar to financially needy patients.

Paying more for assistance made commercial sense in the government’s account. Free product would generate no drug-sale revenue. Funding Medicare patients’ copays allowed claims to go to Medicare and generated revenue for Amgen. The company allegedly spent more on the foundation route because that route brought government money back into the sale.

That is why the choice of assistance program matters in a pharmaceutical kickback case. The fund’s eligibility terms determine whose prescriptions receive help. Here, the allegation was that a fund named for a disease supported a single manufacturer’s product.

Kyprolis and the Travel Fund

The Kyprolis allegation concerned travel expenses. The fund ostensibly covered healthcare-related travel for patients taking any multiple myeloma drug. The government alleged that it was actually used almost exclusively for patients taking Kyprolis. The gap between the stated purpose and the patients who received help was the point. The government alleged that Amgen’s predecessor, Onyx Pharmaceuticals, which Amgen acquired in 2013, asked the foundation to create the travel fund and was its sole donor, and that Amgen kept donating after integrating Onyx into its operations in 2015. It also alleged that, for 2013, Onyx used the foundation’s data on a second, multiple-donor copay fund’s anticipated and actual Kyprolis expenses to tailor its donations to just the amount needed to cover Kyprolis patients’ copays.

Biogen’s separate copay-funding case illustrates another way to direct assistance toward a manufacturer’s products. The government alleged that Biogen coordinated foundation payments with the transfer of financially needy patients from free-drug support. In Amgen’s allegations, the fund’s product coverage and travel spending supplied the connection. In Biogen’s, the timing supplied it.

What Evidence Is Needed to Prove Fraud?

For these Amgen allegations, the evidence connects the company’s commercial decisions to prescriptions, coverage and government payments. The complaints identify concrete material: sales instructions, profit spreadsheets, off-invoice discounts, rebate arrangements, scientific articles and data-purchase agreements. The government’s survey account adds a change in eligibility and marketing access to physician identities.

A sales employee may know what representatives were told to say about provider profit. A pricing employee may understand the rebate behind an invoice. Someone working on publications, market research or patient assistance may know why a study, survey or fund was designed as it was. We work with pharmaceutical whistleblowers to connect that inside knowledge to the transaction and the government payment it affected.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Xgeva case, two Amgen employees brought the case, and the government took over part of it and negotiated the settlement. The Justice Department announced a collective $2.75 million whistleblower reward for the employees.

What looked like a market-research expense carried a prescribing condition that people inside the business could recognize.

You Know What the Payment Was Buying

If you worked with the sales pitch, survey contracts or patient-assistance payments, tell our whistleblower experts what the company was paying for. We build your strongest pharmaceutical whistleblower case with you and bring in pharmaceutical fraud whistleblower lawyers who understand promotion, research payments and government reimbursement. We stay beside you as the evidence moves from the company’s internal decisions to the case for recovery.