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UPDATE:Whistleblower Suit Filed Vs Amgen Over Drug Marketing
Dow Jones
February 27, 2009: 01:34 PM ET
(Adds details and background throughout; comments from Amgen in 6th paragraph, Wyeth in 10th paragraph, WebMD in 13th paragraph and AmerisourceBergen in 18th paragraph; updates stock prices.)
By Peter Loftus
Of DOW JONES NEWSWIRES
An unidentified whistleblower has filed a lawsuit against Amgen Inc. (AMGN) accusing the biotechnology company of illegal marketing of its blockbuster drugs Enbrel and Aranesp.
Wyeth (WYE), which co-markets Enbrel with Amgen, also was named as a defendant, along with wholesale drug distributor AmerisourceBergen Corp. (ABC), online health-information provider WebMD Health Corp. (WBMD) and other defendants.
An amended version of the lawsuit was filed in 2007 in the U.S. District Court for the District of Massachusetts in Boston, but had been under seal in accordance with a federal whistleblower law that protects the identify of the plaintiff. In the drug industry, such suits are often filed by former employees including sales representatives. A plaintiff's lawyer listed in the suit couldn't immediately be reached.
NOTE: In the drugs industry the suit are often field by former employees including sales presentatative.
A U.S. judge decided earlier this month to unseal portions of the lawsuit, and Wyeth disclosed the development in a regulatory filing on Friday.
The suit was filed on behalf of the U.S. and several states, though Wyeth said in its filing Friday that the U.S. Justice Department hasn't decided whether to intervene, and the department hasn't sought any information from Wyeth. A Justice Department spokesperson couldn't immediately be reached.
"Amgen believes the allegations made in the complaint are without merit and will vigorously defend against the litigation," said David Polk, spokesman for the Thousand Oaks, Calif, company.
Amgen shares declined $1.38, or 2.7%, to $59.84 Friday afternoon. Shares of Wyeth, which has agreed to be acquired by Pfizer Inc. (PFE), fell 23 cents to $ 40.91.
According to the lawsuit, the defendants violated federal and state false- claim laws, Medicare and Medicaid anti-kickback laws and the U.S. Food, Drug and Cosmetic Act "by engaging in numerous unlawful activities in their marketing of Aranesp and/or Enbrel."
Aranesp is an anti-anemia treatment that raked in $3.1 billion in sales in 2008. Aranesp and other anemia drugs are among the biggest drug expenses for Medicare, the federal health program for seniors. Medicare has tightened its reimbursement policies over the past couple years because clinical studies have shown the drugs can increase risk for heart problems and other conditions when used in certain ways. This has hurt sales.
NOTE: medicare has tightened its reimburesement.
Enbrel, a treatment for rheumatoid arthritis and psoriasis, generated $3.6 billion in 2008 sales for Amgen. Amgen co-markets Enbrel with Wyeth in the U.S. and Canada. Wyeth has exclusive rights to the drug outside these countries, and it recorded $2.6 billion in Enbrel sales for 2008 outside the U.S. and Canada.
Doug Petkus, spokesman for Madison, N.J.-based Wyeth, said "we believe the allegations as regard to Wyeth are without merit and we will defend ourselves vigorously."
According to the lawsuit, Amgen improperly marketed the attractive economics of Aranesp to customers - essentially that they could profit more from prescribing Aranesp than competing drugs. The lawsuit also alleges Amgen offered improper price discounts for Aranesp to customers and hid these prices from government health programs.
The suit also alleges that both Aranesp and Enbrel were marketed for uses not approved by the Food and Drug Administration. The suit alleges that part of this so-called "off-label" marketing was conducted on the online physician-education site Medscape, which is owned by WebMD.
New York-based WebMD spokeswoman Kate Hahn said "after a preliminary review of the WebMD programs that may be relevant, WebMD believes we complied with the rules and regulations applicable to our services."
The lawsuit alleges Amgen took these steps to gain an edge over rival anemia drug Procrit, which is marketed by Johnson & Johnson (JNJ), New Brunswick, N.J. Procrit is identical to Amgen's own Epogen, and J&J markets Procrit under a license deal with Amgen.
Last year, Amgen agreed to pay $200 million to J&J to settle J&J's allegations that Amgen violated antitrust laws by offering discounts to cancer clinics on Aranesp and certain other Amgen drugs. Amgen admitted to no wrongdoing under the settlement. Amgen has previously disclosed federal prosecutors have filed requests for documents related to its products.
J&J's own marketing practices for Procrit also have come under a cloud. A separate whistleblower suit against J&J, brought in 2003 by former sales representatives, alleged J&J offered kickbacks to health-care providers and encouraged off-label use of Procrit in an effort to counter Aranesp. The Justice Department declined to intervene, and the suit was later dismissed at J&J's request. The whistleblowers have appealed the action.
J&J also has previously disclosed that the U.S. Office of Inspector General's field office in Denver and the New York State Attorney General have sent subpoenas seeking documents related to Procrit.
Michael Kilpatric, spokesman for Chesterbrook, Pa.-based AmerisourceBergen, said the company couldn't comment on the allegations because the unsealed lawsuit has redacted portions and the government hasn't contacted the company.
-Peter Loftus; Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com
(END) Dow Jones Newswires
02-27-09 1334ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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