AmerisourceBergen drug co pays $625 mill. to settle charges of repackaging cancer drugs and 3 whistleblowers to share $93 million

AmerisourceBergen Corporation and its subsidiaries  have agreed to pay $625 million to settle charges  that improperly repackaged oncology-supportive injectable drugs into pre-filled syringes and improperly distributed those syringes to physicians treating vulnerable cancer patients.  Last year, AmerisourceBergen Specialty Group, a wholly-owned subsidiary of AmerisourceBergen Corporation, pled guilty to illegally distributing misbranded drugs and agreed to pay $260 million to resolve criminal liability for its distribution of these drugs from a facility that was not registered with the Food and Drug Administration (FDA).  The settlement announced today resolves ABC’s civil liability to the United States under the False Claims Act for causing false claims for the drugs it repackaged to be submitted to federal health care programs.

The United States contends that ABC sought to profit from the excess drug product or “overfill” contained within the original FDA-approved sterile vials for these cancer supportive injectable drugs by establishing a pre-filled syringe program through a subsidiary that it claimed was a pharmacy.  The United States alleged that the “pharmacy” was in reality a repackaging operation that created and shipped millions of pre-filled syringes to oncology practices for administration to cancer-stricken patients.  As part of this operation, ABC purchased original vials from their respective manufacturers, broke their sterility, pooled the contents, and repackaged the drugs into pre-filled syringes. The United States alleged that ABC never submitted any safety, stability, or sterility data to the FDA to show that its operation ensured the safety and efficacy of the repackaged drug products.  It further alleged that, at times, these pre-filled syringes were prepared in non-sterile conditions, contaminated with bacteria and other unknown particles, and lacked the required quality and purity.In addition, by harvesting the overfill, ABC was able to create more doses than it bought from the original vial manufacturers.  The United States alleged that ABC’s scheme enabled it to bill multiple health care providers for the same exact same vial of drug, causing some of those providers to bill the Federal Health Care Programs for the same vial more than once.  The scheme also allegedly enabled ABC to increase its market share by offering various product discounts, which it leveraged to obtain new customers and to keep existing customers buying its entire portfolio of oncology drugs.

“The $885 million combined civil and criminal resolution with ABC underscores our determination to utilize all tools at our disposal to pursue illicit schemes that seek to profit from circumvention of important safeguards designed to protect the nation’s drug supply,” said Assistant Attorney General Joseph H. Hunt of the Department of Justice’s Civil Division.  “We will continue to be particularly vigilant where these schemes put the health and safety of vulnerable patients at risk.”

Through these actions, the United States contended that ABC caused false claims to be submitted to the Centers for Medicare and Medicaid Services (“CMS”), the Department of Defense’s Defense Health Agency, which administers TRICARE, the Office of Personnel Management, which administers the Federal Employees Health Benefit Program, and the United States Department of Veterans Affairs (collectively, the “Federal Healthcare Payors”). Under the terms of today’s settlement, ABC will pay $581,809,006 plus accrued interest to the federal government and $43,190,994 plus accrued interest to state Medicaid programs.

“Drug companies such as ABC that seek to boost profits at the expense of cancer patients unnecessarily put the health and safety of this vulnerable population at risk,” stated HHS-OIG Special Agent-in-Charge Lampert.  “Greed must never be a part of medical decision making.  HHS-OIG, along with our law enforcement partners, is committed to protecting patient quality of care, and this settlement should serve as a warning to drug companies that are tempted to shortchange patient well-being.”

The whistleblower’s share of the federal portion of the civil settlement will be $93,089,441. The former chief operating officer of an Americore source unit ABC unit Michael Mullen was the first to alert the government which led to the company’s $625 million settlement with federal and state authorities over allegations that the firm distributed adulterated and misbranded pharmaceuticals. His lawyer is Bob Thomas of Boston. The $93,089 will be split between three whistleblowers.