Amgen to Pay $11 Million Nationwide Medicaid Settlement

Attorney General Peter F. Kilmartin announced Tuesday that Rhode Island, as part of a nationwide settlement against the drug manufacturer Amgen, Inc., has resolved allegations that the company violated certain state false claims acts, by reporting inflated pricing data for its prescription drugs Aransep, Enbrel, Epogen, Neulats, Neupogen, and Sensipar, causing Rhode Island and other states Medicaid programs to overpay for those drugs. Rhode Island’s recovery pursuant to the multi-state settlement is $54,248.

Amgen's 73-acre Rhode Island campus, located at 40 Technology Way in West Greenwich, is dedicated to the manufacture of Enbrel, one of the drugs involved in the settlement. Enbrel is used to treat rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, and plaque psoriasis in adults, as well as juvenile idiopathic arthritis in children.

The drug pricing data at issue in this settlement concerns the “Average Wholesale Price” (AWP) and “Wholesale Acquisition Cost” (WAC) benchmarks used by states’ Medicaid programs, including Rhode Island, to set pharmacy reimbursement rates for pharmaceuticals dispensed to Medicaid beneficiaries.

Rhode Island and 35 other states alleged that Amgen reported inflated AWP and WAC pricing data to drug pricing summaries, thereby creating an artificially inflated “spread” between the price for which Medicaid providers dispensed the named drugs to beneficiaries and the price at which the states reimbursed providers for those drugs. 

The states further alleged that after creating the inflated spread, Amgen marketed that spread to Medicaid providers in order to boost Amgen’s sales of the named drugs.

“Despite settlement after settlement, we continue to see pharmaceutical companies engage in practices that boost their bottom line at the expense of states’ Medicaid programs,” said Attorney General Kilmartin. “Our Medicaid Fraud and Control Unit works diligently with its counterparts across the nation to end these practices, hold the companies engaging in this type of activity accountable, and return vital funds to the state’s Medicaid program.”

The settlement follows an April 16 deal in which Amgen agreed to pay $24.9 million to settle charges that it paid kickbacks to long-term care pharmacists and nursing home staff to dispense its drug Aranesp for unapproved uses. Aranesp is approved to treat anemia associated with chronic renal failure or those undergoing chemotherapy.

Amgen did not accept fault as part of the settlement.