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Catch of the Week – AmerisourceBergen Corporation

Posted  October 12, 2018

Last Monday, one of the largest drug wholesalers in the country agreed to pay $625 million to settle allegations that it put cancer patients at risk by illegally repackaging and distributing millions of vials of oncology drugs. The federal government and forty-four states claimed that AmerisourceBergen Corp. (“ABC”) and one of its subsidiaries, Medical Initiatives, Inc. (“MII”) engaged in a thirteen-year-long scheme to open sterile vials of oncology drugs, pool their contents in plastic containers, and repackage them in pre-filled syringes. The repackaging took place in nonsterile environments that often contaminated the syringes with particles of foreign matter. These syringes were then distributed to oncology practices and physicians, who prescribed them to cancer patients undergoing chemotherapy treatment. The scheme allowed ABC to use the “overfill”—the amount of extra drug beyond the labeled dose that is typically contained in an FDA-approved vial of drug—to create more doses than it bought from the original manufacturers. It enabled ABC to bill multiple health care providers for the same vial of drug, in turn causing providers to bill various federal healthcare programs more than once for the same vial. ABC’s total profit from 2001 to 2014 amounted to at least $99.6 million.

The federal and state civil suits, a multi-agency effort led by the Department of Justice, the U.S. Food and Drug Administration, the U.S. Department of Health and Human Services, and the New York Attorney General’s office, among others, were originally brought under the Federal False Claims Act and its state equivalents. Of the $625 million settlement, over $99 million will go to the states’ Medicaid programs, and over $93 million will go to co-whistleblowers Michael Mullen, Daniel Sypula, Kelly Hodge, and Omni Healthcare, Inc.

ABC was one of many distributors to have been sued last year by West Virginia counties for its alleged contribution to the opioid epidemic. Also in 2017, another ABC subsidiary pleaded guilty to illegally distributing misbranded drugs.

Scott J. Lampert, Health and Human Services special agent-in-charge said of the settlement announcement: “Greed must never be a part of medical decision making. (T)his settlement should serve as a warning to drug companies that are tempted to shortchange patient well-being.” New York Attorney General Barbara Underwood similarly stated: “We have zero tolerance for big corporations that skirt federal and state laws to boost their profits at the expense of vulnerable individuals – such as cancer patients during chemotherapy.”


Tagged in: Catch of the Week, FCA Federal, Healthcare Fraud, Pharma Fraud, Whistleblower Case,