PharMerica Reaches Settlement in Amgen Payoff Case

Various pills

MorgueFile / Wikimedia Commons

Various pills

PharMerica Corp. has reached a preliminary out-of-court settlement with Kentucky and 25 other states that accused the Jeffersontown-based company of accepting payoffs from Amgen Inc. for switching nursing home patients to an Amgen anemia drug.

Terms of the settlement were not disclosed. The federal judge in South Carolina who dismissed the civil complaint Tuesday ruled that the case could be revived if the settlement isn’t finalized within 45 days.

“We have reached a settlement in principle with PharMerica,” said Allison Martin, a spokeswoman for Kentucky Attorney General Jack Conway. “That settlement has not been executed. The parties have 45 days to do so.”

By participating in the settlement, Kentucky ensures itself a share of the proceeds. On Wednesday, Conway’s office announced a settlement with the company accused of paying  kickbacks to PharMerica. Amgen agreed to pay $71 million to 49 states — $1.1 million to Kentucky — to settle charges that it improperly promoted its Aranesp anemia drug and Enbrel arthritis drug.

Amgen had already settled federal kickback and fraud charges related to Aranesp in December 2012. It paid $762 million in fines and pleaded guilty to one charge of drug misbranding.

A PharMerica spokesman did not return a phone call Thursday. An attorney for the company said it doesn’t comment on active cases.

The kickback accusations against PharMerica were brought by a former Amgen manager named Frank Kurnik in 2011. He alleged that Amgen paid generous incentives to PharMerica and Omnicare Inc. — the two-biggest suppliers of meds to nursing homes — to expand the sale of Aranesp beyond its FDA-approved uses. PharMerica denied the allegation. Omnicare paid a $4.2 million settlement.

Kurnik’s lead attorney, Reuben Guttman of Washington, D.C., would not disclose settlement terms with PharMerica.

“While not in a position to discuss the terms of any potential resolution, it is clear from our experience in this type of litigation that state and federal regulators need to do serious oversight of nursing homes and the pharmacy services that they use,” he said by email.

Reporter James McNair can be reached at jmcnair@kycir.org and (502) 814-6543.

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