AmerisourceBergen Specialty Group to Pay $260-Million Criminal Penalty

On Sep. 27, 2017, the US Department of Justice (DOJ) reported that AmerisourceBergen Specialty Group (ABSG), a wholly owned subsidiary of AmerisourceBergen Corporation, a major wholesale drug company, pled guilty in a federal courthouse in Brooklyn, NY to illegally distributing misbranded drugs. ABSG agreed to pay $260 million in total to resolve criminal liability for distributing oncology supportive-care drugs from a facility that was not registered with FDA. The guilty plea and sentencing took place before US District Judge Nina Gershon.

The $260-million penalty comprises a $208-million criminal fine plus $52 million in criminal forfeiture. In addition, ABSG has entered into an agreement with the US Attorney’s Office for the Eastern District of New York and the DOJ’s Consumer Protection Branch to maintain a compliance and ethics program. The program is designed to increase accountability of individuals and corporate board members, increase transparency, and  strengthen the company’s compliance with the Food, Drug and Cosmetic Act (FDCA). The program also requires corporate board members to annually review the effectiveness of the company’s compliance program and requires the company to maintain a hotline for complaints about any improper practices. In connection with the guilty plea, the company filed a statement for the facts that it is admitting. 

The criminal resolution was announced by several agents, including Bridget M. Rohde, acting US attorney for the Eastern District of New York; Mark S. McCormack, special agent-in-charge, FDA Office of Criminal Investigations Metro Washington Field Office;  Scott J. Lampert, special agent-in-charge, US Department of Health and Human Services, Office of Inspector General, New York Region; Leigh-Alistair Barzey, special agent-in charge, Defense Criminal Investigative Service, Northeast Field Office; and Scott Rezendes, special agent-in-charge,  Office of Personnel Management, Office of Inspector General.

Distribution practices

According to court records, between 2001 and 2014, two of ABSG’s Alabama-based subsidiaries, Medical Initiatives Inc. (MII) and Oncology Supply Company (OSC), prepared syringes that had been pre-filled with oncology supportive care drugs-specifically, Aloxi (palonsetron hydrochloride), Anzemet (dolasetron mesylate), generic versions of granisetron injection, Kytril (granisetron hydrochloride), Neupogen (filgrastim), and Procrit (epoetin alfa). The syringes were shipped to oncology centers, medical practices, and physicians for administration to immunocompromised cancer patients undergoing chemotherapy treatment in 50 states, including to approximately 37 healthcare providers located in the Eastern District of New York.

The court documents alleged that MII removed FDA-approved drug products from the original glass vials in which they were packaged and repackaged the drugs into plastic syringes.  This was done to prepare the plastic syringes as pre-filled syringes (PFS). The process also allowed MII to access and extract excess drug product in the original vials and to sell the excess product. The court documents alleged that MII prepared PFS in an unclean, unsterile environment. As a result, some PFS contained particles or foreign matter and some lacked the quality and purity that MII and OSC represented to customers. 

The business model followed by MII included “pooling”, that is, combining the contents of multiple vials. According to court documents, many of the vials used by MII to prepare PFS were designated by the original drug manufacturer as “single use” vials. This meant the manufacturer could not guarantee drug product sterility if the vials were breached.  In MII’s pooling process, the company’s technicians frequently breached drug vials multiple times, which increased the risk of contamination.

ABSG did not register MII as a re-packager or manufacturer with FDA as required by the FDCA, according to DOJ.  Instead, the company portrayed MII to its customers and to state agencies as a state-regulated pharmacy that dispensed prescription drugs and claimed that MII was otherwise in compliance with state pharmacy laws, the agency said. 

“By holding MII out as a pharmacy, ABSG unlawfully exploited an exemption to [FDA] registration requirement that is reserved for legitimate pharmacies, not for manufacturers or re-packagers,” DOJ stated in a press release.

“Injectable drugs prescribed for patients-especially vulnerable cancer patients-must be pure, sterile and produced in an FDA-compliant facility that is within the supply chain that FDA oversees,” stated Special Agent-in-Charge McCormack in the press release.

Source: US Department of Justice