Fines, Payouts Near $1B for 'Adulterated' Cancer Drugs

AmerisourceBergen Corporation, a major US drug wholesaler, agreed this week to pay $625 million to resolve federal civil liability stemming from its "repackaging and sale of adulterated and unapproved new drugs" as well as from double billing and paying kickbacks to physicians, according to the US Department of Justice.

The settlement comes more than a year after AmerisourceBergen pleaded guilty to introducing these same adulterated and "misbranded" drugs into interstate commerce, which is a federal offense, and agreed to pay $260 million to settle the criminal charge.

"AmerisourceBergen Corporation placed corporate profits over patients' needs, endangering the health of vulnerable cancer patients," Richard P. Donoghue, US Attorney for the Eastern District of New York, said in a press statement this week.

The civil and criminal charges — and the $885 million in total fines and payouts — are all connected to a 13-year-long scheme perpetrated by a division of AmerisourceBergen.

Between 2001 and 2014, workers at the company's division Medical Initiatives, in Dothan, Alabama, created and shipped millions of prefilled syringes containing oncology drugs.

The drug-containing syringes were sent to oncology centers, medical practices, and physicians in all 50 states for use in the supportive care of patients with cancer undergoing chemotherapy.

The drugs included Procrit (epoetin alfa), Aloxi (palonosetron), Kytril (granisetron) and its generic form granisetron, Anzemet (dolasetron), and Neupogen (filgrastim).

Glass vials of the drugs were purchased by Medical Initiatives and then illegally repackaged into plastic syringes at the Alabama facility.

The repackaging took advantage of the vials' "overfill," or an extra 10% of drug. That amount is added into glass vials ensure that a full dose is available when drug is pulled in cancer clinics (because some might get stuck on the glass).

A clever exploitation of that overfill was the profit source for Medical Initiatives and its parent company, AmerisourceBergen, and their prefilled syringe product line. The company profited because it needed only 10 vials of drug to create 11 prefilled syringes thanks to the 10% overfill in each vial.

The US Department of Justice estimated a minimum profit of $99 million from the scheme from 2001-2014.

Medical Initiatives workers extracted the drugs — including the overfill — from the glass vials and "pooled" the drugs into intravenous bags or larger containers. From those containers, which were reportedly sometimes left out overnight uncovered, the syringes would be filled.

Sanitary conditions at Medical Initiatives were allegedly substandard, with a packaging "cleanroom" that, at times, contained open adhesive bandages, iPods and exposed earbuds, skin lotion, aloe gel, chewing gum, and nonsterile mops, as reported by Medscape Medical News last year.

Also, according to company logs, the facility had on average more than 100 syringes each week that contained "floaters"; employees would not destroy these syringes but instead filtered out the debris. In the case of Procrit, this was a clear violation of US Food and Drug Administration (FDA) labeling, which calls for destruction of any such compromised product.

How They Avoided FDA Scrutiny

Notably, AmerisourceBergen did not register Medical Initiatives with the FDA as a repackager.

By avoiding registration, the company evaded FDA inspection and important safety and sterility safeguards, including current good manufacturing practices, according to the US Department of Justice.

The prefilled syringe manufacturing process at Medical Initiatives was illegal; what they did to drugs and biologics (that is, altering them) requires that a company file a new drug application or biologic license application. It did neither. Instead the company claimed to be a pharmacy, which the federal authorities called a "sham."

Last year, an expert not involved with the United States' case commented on the safety of the prefilled syringes.

"There are always risks (low) — even from the original manufacturers' vials. But those risks rise significantly when that sterile product is transferred to a prefilled syringe, especially if appropriate sterile procedures and validations are not uniformly followed," said Dwight Kloth, PharmD, director of pharmacy at Fox Chase Cancer Center in Philadelphia, Pennsylvania, in an email to Medscape Medical News.

However, last year in a statement AmerisourceBergen said that "neither the government nor AmerisourceBergen are aware of any adverse events [among patients] associated with the use of Medical Initiatives Inc syringes."

In the civil charges settled this week, AmerisourceBergen was also accused of billing multiple physicians for individual vials, causing those physicians to bill the government more than once, and paying kickbacks to get physicians to purchase their cancer supportive-care drugs through the pre-filled syringe program.

In a statement reported by Reuters, AmerisourceBergen said that the recent settlement is indicative that some practices at the now disbanded Medical Initiatives unit "were not consistent with AmerisourceBergen's approach to corporate compliance."

The federal charges against AmerisourceBergen stem from three whistleblower suits filed by former Amerisource employee Michael Mullen, a Florida oncology practice Omni Healthcare, and Michigan pharmacy workers Daniel Sypula and Kelly Hodge, according to the legal news website Law360. The group will share $93 million in whistleblower reward money, but the terms were not disclosed.

Follow Medscape senior journalist Nick Mulcahy on Twitter: @MulcahyNick

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