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AmerisourceBergen to pay $625M to resolve claims from federal investigation

AmerisourceBergen Corp. said it agreed to pay $625 million to resolve a U.S. government investigation in connection with the company's illegal distribution of syringes.

In September, the company pleaded guilty to distributing syringes prefilled with cancer drugs prepared in facilities unregistered with the U.S. Food and Drug Administration. The syringes were prepared by AmerisourceBergen units Medical Initiatives Inc. and Oncology Supply Company between 2001 and 2014.

The drug wholesaler had then agreed to pay $260 million to resolve criminal liability as part of a plea agreement with the U.S. Attorney's Office for the Eastern District of New York. The investigators, however, also intended to pursue alleged civil claims under the False Claims Act, under which the government can recover taxpayer money paid out based on fraudulent claims.

The new in-principle agreement would resolve the alleged civil claims in their entirety, subject to negotiation of final terms as well as approval by the court.

The parties would also need to resolve issues with other interested parties, including the resolution of any potential administrative action by the Office of Inspector General of the U.S. Department of Health and Human Services.

While reporting its fiscal-year 2017 earnings results on Nov. 2, the company said it accrued a $575 million reserve based on advanced settlement discussions with the investigators.

With the new deal, the company increased its reserve accrual to $625.0 million for the fiscal year ended Sept. 30, 2017.