Arkansas will join with 42 other states and the federal government to reach a settlement with AmerisourceBergen Corporation (ABC) over allegations that the pharmaceutical company introduced adulterated drugs into the market, Arkansas Attorney General Leslie Rutledge announced.
ABC will pay the states and the federal government $625 million. Approximately $99.8 million will go to Medicaid programs.
ABC’s subsidiary, AmerisourceBergen Specialty Group (ABSG) pleaded guilty to illegal distribution of misbranded drugs in September 2017. ABSG has agreed to pay $260 million in forfeitures and criminal fines.
Arkansas will receive about $2.8 million as part of the settlement.
The settlement will resolve allegations that Medical Initiatives, Inc., a purported pharmacy owned by ABSG in Alabama, pooled vials of oncology supportive care drugs used during chemotherapy to create pre-filled syringes to sell to doctors.
The drugs involved in the scheme include Anzemet, Aloxi, Procrit, Neupogen, Kytril and the generic version of Kytril.
An investigation revealed that Medical Initiatives was not a pharmacy, but rather, a repackager and was required to apply for a New Drug Application for the pre-filled syringes.
The company broke the seal of the FDA-approved drug vials and repackaged them into plastic syringes that allowed them to sell excess drug product in “overfill” vials. The pre-filled syringes were prepared in an unsterile environment and contained particles of foreign matter. They were then shipped off to providers through another unit of ABSG called Oncology Supply Company.
Medical Initiatives did not comply with pharmacy regulations in any state in which it was licensed. The drugs were also unapproved by the FDA and adulterated, which meant that they were not eligible for reimbursement by government healthcare programs.
The settlement will also resolve allegations of double billing for the same vial of a drug and unlawful kickbacks given to doctors to encourage patients to purchase the pre-filled syringes instead of the vials.