IHS Global Insight Perspective | |
Significance | Amgen, Wyeth, AmeriSourceBergen and WebMD Health Corp have been accused in a whistleblower lawsuit of using improper marketing practices for anaemia drug Aranesp and rheumatoid arthritis treatment Enbrel. |
Implications | All parties named in the lawsuit have denied the accusations, which range from off-label prescribing to persuading doctors to alter their prescribing practices on cost grounds. Amgen already settled a similar lawsuit last year without admitting wrongdoing, but has since stopped offering discounts on drug bundles. |
Outlook | The lawsuit should have minimal impact on sales for either drug company, but will add to already high legal costs. |
A lawsuit has accused U.S. drug giants Amgen and Wyeth, alongside at least two other defendants, of improper marketing practices on two blockbuster medicines. Initially filed in 2007, the lawsuit has remained "sealed" until now under a U.S. law that protects that identity of corporate whistleblowers. The two companies are named alongside drug distributor AmerisSourceBergen and internet health information portal WebMD Health Corp as having allegedly used illegal tactics to market Amgen's anaemia drug Aranesp (darbepoetin alfa), and rheumatoid arthritis treatment Enbrel (etanercept), which is co-marketed by Amgen and Wyeth. All parties have flatly denied the charges.
According to The Wall Street Journal, the lawsuit was filed in the name of the United States and a handful of individual states, although the U.S. Department of Justice has not yet made any move to officially back the suit. Parts of the suits that have now been unsealed include allegations that:
- Amgen promoted Aranesp to physicians by suggesting that prescribing Aranesp would be more profitable than prescribing rival anaemia drugs.
- Amgen gave "improper" discounts on Aranesp without disclosing them to state health programmes such as Medicare and Medicaid.
- Aranesp and Enbrel were both marketed for off-label indications, including via the Medscape website belonging to WebMD Health Corp.
The lawsuit claims that these actions are reportedly in breach of false-claims laws at federal and state level, as well as the Food, Drug and Cosmetic Act and anti-kickback laws for Medicare and Medicaid. Furthermore, the suit accuses Amgen of using these methods as a means of promoting Aranesp ahead of its main competitor, Procrit (epoetin alfa), produced by U.S. pharma heavyweight Johnson & Johnson (J&J).
Although Amgen has vowed to vigorously defend itself against the accusations in the lawsuit, it is not the first time that the company has had to fend off allegations of improper marketing practice with regards to its top-selling drug. Just last year, Amgen settled a lawsuit brought by J&J, making a US$200-million payment to the company, while still refusing to admit any wrongdoing. J&J had accused Amgen of forcing Procrit out of the market by offering Aranesp to oncology clinics at a discount when bundled with other products (see United States: 14 July 2008: J&J Settles Anaemia Drug Anti-Trust Lawsuit with Amgen). By August, Amgen had halted the practice altogether (see United States: 29 August 2008: Amgen Calls Time on Bundling Rebate Offers for Aranesp).
Aranesp's U.S. sales fell by 23% year-on-year (y/y) to stand at US$1.7 billion in 2008. Enbrel's U.S. sales, as reported by Amgen, grew 11% y/y to US$3.4 billion, while Wyeth's sales of Enbrel in markets outside the U.S. and Canada jumped by 27% y/y to US$2.6 billion.
Outlook and Implications
Whistleblower lawsuits in the pharmaceutical industry tend to be brought by former salespeople of the company the lawsuit is aimed at, and if this is the case here, then Amgen and Wyeth may have insider information to contend with. Amgen, for its part, has stopped its practice of offering discounts on drug "bundles" in U.S. oncology clinics since 1 October 2008, and the effect was immediately visible: Aranesp's fourth-quarter U.S. sales contracted by 22% y/y, compared with a minor contraction of just 0.4% y/y in third-quarter turnover. The fact that the discounts have now demonstrably stopped may allow for an easier defence against this particular accusation in court, although it remains to be seen how the remainder of the suit will pan out. The lawsuit should have minimal impact on sales for both Amgen and Wyeth, though it will add to already high legal costs at each firm.
The case highlights the importance of transparency in drug marketing practices in the United States, particularly at a time when rebates on medicines supplied through the Medicare and Medicaid programmes are being prioritised as a means of expanding subsidised healthcare to the population (see United States: 27 February 2009: President Obama's Healthcare Budget Unveiled in U.S., Generics Push Signalled).