Pharmaceutical giant AmerisourceBergen Corp. has agreed to a $625 million settlement to resolve the government’s False Claims Act (FCA) investigation into the drug wholesaler’s practice of repackaging and selling injectable drugs, without regard to product purity. The agreement to settle was made in principal and is on top of $260 million in fines and forfeitures that Amerisource agreed to pay to resolve a criminal suit. The proposed settlement still needs to be approved by the federal court. As it’s proposed, the settlement is one of the more sizable FCA settlements in recent history.
The settlement comes two months after Amerisource’s now-defunct Alabama subsidiary, Medical Initiatives Inc., pled guilty to a single count of introducing misbranded drugs into interstate commerce. In that case, Medical Initiatives admitted to opening sterile vials of oncology drugs, pooling the medicine and then transferring the drugs into single-dose prefilled syringes. According to court documents, the syringes were often shipped out without a valid prescription, sometimes in doses far exceeding plausible or safe usage for an individual, and occasionally to dead people. Overall, Medical Initiatives produced 9 million prefilled syringes with various drugs, including Johnson & Johnson’s popular anemia drug Procrit. But it only sought sterility testing by an outside laboratory on three occasions. When the test results came back positive for bacteria, Medical Initiatives did not notify regulators, issue recalls or seek out the source of contamination, according to court documents.
Amerisource also admitted that it never registered Medical Initiatives with the U.S. Food and Drug Administration (FDA), as it’s required to do by federal law. Amerisource voluntarily closed Medical Initiatives in 2014. In September, Amerisource agreed to pay a $208 million criminal fine and criminal forfeiture of $52 million to resolve that suit. Amerisource had revealed in an earnings report that it had set aside $575 million to resolve potential FCA claims brought by the U.S. attorney’s office in Brooklyn and the main division of the U.S. Department of Justice. But that amount was $50 million short of the $625 million settlement that it reached with the government. Amerisource, which specializes in drug distribution, is one of the largest U.S. companies in terms of revenue, reporting a fiscal 2017 income of $153 billion.