Forty-four states and the federal government have reached an agreement with drug distributor AmerisourceBergen Corp. for the illegal distribution of adulterated and misbranded drugs. ABC will pay the states and the federal government $625 million, of which $99.9 million will go to the states’ Medicaid programs.
“ABC placed corporate profits over patients’ needs, endangering the health of vulnerable cancer patients,” said U.S. Attorney Donoghue.
The settlement came after ABC’s AmerisourceBergen Specialty Group pleaded guilty to illegally distributing misbranded drugs in September 2017. ABSG agreed to pay $260 million in fines and payments.
The settlements resolve allegations that Medical Initiatives Inc., a “pharmacy” ABSG opened in Dothan, Alabama, submitted false claims to Medicaid for unapproved new drugs and defective or contaminated drugs, and double-billing for the same vial.
MII created, packed, and shipped pre-filled syringes to oncology practices and physicians treating cancer patients during chemotherapy. The drugs include Aloxi, Anzemet, Kytril, Neupogen, Procrit, and the generic version of Kytril.
To prepare the syringes, MII broke the seal of the FDA-approved drug vials, combined the drugs from the vials, and repackaged them into smaller plastic syringes. MII created a greater number of syringes than the number of vials purchased, which allowed MII to sell and profit from the increased number of vials, known as “overfill.” The syringes, which were prepared in an unsterile environment and often contained particles of foreign matter, were then shipped to providers through Oncology Supply Company, another branch of ABSG.
The investigation showed that MII didn’t act as a pharmacy but instead as a repackager and was required to apply for a New Drug Application to fill syringes. However, no NDA was submitted to the U.S. Food and Drug Administration. MII also didn’t comply with pharmacy regulations in the states where it was licensed, so the drugs weren’t eligible for reimbursement by government healthcare programs.
The settlement also resolves charges that ABC provided kickbacks to physicians to get them to purchase Procrit in pre-filled syringes rather than vials, which resulted in providers improperly billing for the overfill syringes.
