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Sunday, May 28, 2023

Investors Easily Swallow Amgen Drug Charges

When Amgen Inc. agreed last week to pay $762 million in fines and penalties for promoting the unsafe use of one of its anemia drugs, investors barely shrugged. The stock of the Thousand Oaks biotech lost just a dollar even though the firm pleaded guilty Dec. 18 to one misdemeanor count of misbranding anemia drug Aranesp in U.S. District Court in Brooklyn. Prosecutors said the company actively promoted higher doses and frequency of use than the drug was labeled for by the Food and Drug Administration. It also urged use of the drug in cancer patients with anemia who were not undergoing chemotherapy, which later was proven to be dangerous. “When you stretch a gray area, you get into trouble,” said Ahmed Enany, chief executive of the Southern California Biomedical Council, a Los Angeles trade group. “Obviously, because of the lawsuit practices are bound to change. The plea bargain includes $136 million in criminal fines, $14 million in criminal forfeiture and $612 million to settle civil lawsuits related to Aranesp. After Amgen General Counsel David Scott entered the guilty plea, prosecutor Marshall Miller said in a statement that “Instead of working to extend and enhance human lives, Amgen illegally pursued corporate profits while jeopardizing the safety of vulnerable consumers suffering from disease.” However, shareholders were generally prepared for the settlement, as the company had set aside funds for the payouts earlier this year and made note of the possibility in filings with the Securities and Exchange Commission. Amgen is also not the only major drug company to plead guilty to such charges in recent years. Others include Pfizer Inc. and Merck & Co. As part of the deal, the company’s board of directors and executives must sign an agreement with the Department of Health and Human Services in which they agree to personally oversee regulatory compliance. Failure to do so could trigger personal criminal and civil liabilities. Amgen Chief Executive Robert Bradway, who took his position after the time when prosecutors say the Aranesp misrepresentation ended in 2007, addressed the charges in a statement. “I am pleased a settlement was reached to conclude this matter. I am confident about Amgen’s continued adherence to the provisions in this agreement,” he said.. Once the company’s biggest drug, sales of Aranesp have fallen in recent years from a high of $2.1 billion in 2006 as concerns about the safety of the drug increased. There are fears it causes heart attacks or can worsen cancer.

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