In an embarrassing New York Federal court trial, Amgen Inc pleaded guilty for improper marketing practices with respect to its once top-selling drug, Aransep for treating anemia.
Prosecutors said that the company agreed to pay up 762 million dollars towards civil settlement and criminal fines, resulting in a dip in its shares 89.36 dollars on New York Stock Exchange.
The world's biggest name in biotechnology has set aside funds which will be paid for a 612 million dollar civil settlement, 14 million dollar criminal forfeiture, and 136 million dollars towards criminal fine.
The company pleaded guilty for one misdemeanor count as well. Marshall Miller, Acting Attorney for US said that under the agreement, there will be no loss to their federal business or contracts. They could be excluded from federal programs like Medicare which can lead to severe losses in its business.
The prosecutors said that in this deal, Amgen will enter into a corporate integrity agreement for five years with the Office of Inspector General of US Department of Health and Human Services. The plea agreement will be approved by the US District Judge, Sterling Johnson very soon.
The company was accused of promoting its drug, Aranesp for treating anemia caused by cancer when it did not have an approval for it. The approval was granted for using the drug to treat anemia as a side –effect of chemotherapy. Amgen was also accused of forcing higher doses and more convenient treatment schedules in its label than what was approved for use in patients with cancer and chronic kidney disease.
Prosecutors said that Amgen undertook these illegal practices partly to usurp market share from Johnson and Johnson. Marshall Miller said that Amgen pursued profits at the risk of safety of patients. He said that Amgen circumvented FDA approval processes, but the company did not have any fraudulent intent.
The company's spokeswoman at Thousand Oaks, California said that following acceptance of their criminal plea, the company is expected to complete comprehensive resolution of related civil and criminal matters for which Amgen had recorded a charge amounting to 780 million dollars last year.