Amgen whistleblower went undercover for the feds
In Hollywood, when undercover agents are planning to secretly record a meeting, there's often a scene meant to engage the audience's fear and sympathy: "Are you wearing a wire?" someone accuses, usually someone armed with a gun or enormous fists.
At Amgen, an undercover whistleblower faced the same question. But the very idea was so ludicrous, it became a joke. Sales and marketing speakers used it to warm up their audience.
"I'd hear speakers jokingly tell participants to turn off their tape recorders, or express the hope that no one was recording their session," said Jill Osiecki, a former rep who recorded 13 meetings for federal investigators. "Those comments were always followed by uproarious laughter."
That's the most sensational bit of Osiecki's official statement to the press, released after Amgen's $762 million marketing settlement won court approval on Wednesday. That deal included a guilty plea--to a single count of misbranding--and a $136 million criminal fine, plus $14 million in criminal forfeiture payments.
Amgen ($AMGN) also accepted a corporate integrity agreement, which is essentially a promise to stop violating marketing rules, and a blueprint for stamping out bad behavior. "The government raised important concerns in the criminal prosecution. Amgen acknowledges that mistakes were made, and we did not live up to our standards," Amgen SVP and chief compliance officer, Cynthia M. Patton, said in a statement.
Osiecki filed her whistleblower suit in 2004 and helped the feds gather evidence of Amgen's marketing misbehavior. Other whistleblowers also filed suit, accusing the company of paying kickbacks, in the form of free doses doctors could sell for extra profit, and promoting off-label use of Aranesp, the anemia drug, and Enbrel, an arthritis and psoriasis treatment, as well as other drugs.
The criminal plea relates to Aranesp, which Amgen allegedly promoted for off-label use in cancer patients. The drug was FDA-approved for patients undergoing chemotherapy, but Amgen touted it for other cancer patients, a much larger market. Over the past few years, questions about the safety of Aranesp, particularly at high doses, have depressed its sales.
Assembling a viable case against Amgen--or any drugmaker engaged in marketing misbehavior--isn't easy, Osiecki points out in her statement. "I've seen how difficult and expensive it is to discover and prosecute the fraud I witnessed," she said. "Without insiders who can provide a road map ... the [g]overnment may not be able to stop the illegal behavior."
Osiecki and other whistleblowers won't go uncompensated; the False Claims Act apportions a percentage of settlement proceeds to whistleblowers who come forward with a case.
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