SETTLEMENT AGREEMENT
This Settlement Agreement (“Agreement”) is entered into among the United States of
America, acting through the United States Department of Justice and on behalf of the Office of
Inspector General (“OIG-HHS”) of the Department of Health and Human Services (“HHS”), the
TRICARE Management Activity (“TMA”), through its General Counsel, the Office of Personnel
Management (“OPM”) which administers the Federal Employees Health Benefits Program
(“FEHBP”) (collectively the “United States”), Relators listed in Paragraph B of the Preamble to
this Agreement (“Relators”) and Amgen Inc. (“Amgen”) (hereafter collectively referred to as the
“Parties”), through their authorized representatives.
PREAMBLE
A.
Amgen is a Delaware corporation with its principal place of business located in
California. At all relevant times, Amgen developed, manufactured, distributed, marketed and
sold biologic products including biologics under the trade names Aranesp, Enbrel, Epogen,
Neulasta, Neupogen, and Sensipar (collectively the “Covered Drugs”).
B.
The Relators listed herein have filed actions against Amgen pursuant to the qui
tam provisions of the False Claims Act, 31 U.S.C. § 3730(b), as follows (collectively the “Civil
Actions”):
(1)
United States ex rel. Cantor v. Amgen, Inc., et al.
Civil Action No. CV-04-2511 (E.D.N.Y.)
(2)
United States ex rel. Osiecki v. Amgen, Inc., et al.
Civil Action No. CV-05-5025 (E.D.N.Y.)
(3)
United States ex rel. Westmoreland v. Amgen, Inc., et al.
Civil Action No. 06-CV-10972 (D. Mass.)
(4)
United States ex rel. Arriazola v. Amgen, Inc., et al.
Civil Action No. CV 06-3232 (E.D.N.Y.)
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(5)
United States ex rel. Horwitz, et al. v. Amgen Inc., et al.
Civil Action No. C07-0248 (W.D. Wash.)
(6)
United States ex rel. Kelly v. Amgen Corporation
Civil Action No. CV-08-4157 (E.D.N.Y.)
(7)
United States ex rel. Hanks v. Amgen, Inc., et al.
Civil Action No. CV 08-3096 (E.D.N.Y.)
(8)
United States ex rel. Ferrante v. Amgen, Inc., and Amgen Washington Inc.
Civil Action No. CV-08-3931 (E.D.N.Y.).
(9)
United States ex rel. Tucker v. Amgen, Inc.
Civil Action No. CV-09-0887 (E.D.N.Y.).
(10)
United States ex rel. DJAE Partnership v. Amgen, Inc.
Civil Action No. 11-CV- 11242 (D. Mass.)
C.
On such date as may be determined by the Court, Amgen will enter a plea of
guilty pursuant to Fed. R. Crim. P. 11(c)(1)(C) to an information to be filed in United States of
America v. Amgen Inc., Criminal Action No. [to be assigned] (Eastern District of New York)
(the “Criminal Action”) that will allege a violation of Title 21, United States Code, Sections
331(a), and 333(a)(1) and Title 18, United States Code, Sections 2 and 3551 et seq., namely, the
introduction into interstate commerce of a drug that was misbranded within the meaning of 21
U.S.C. § 352(a), specifically, Aranesp, in violation of the Food, Drug and Cosmetic Act
(“FDCA”).
D.
Amgen has entered into or will be entering into separate settlement agreements,
described in Paragraph 1.b. below (hereinafter referred to as the “Medicaid State Settlement
Agreements”) with certain states, commonwealths and the District of Columbia in settlement of
the Covered Conduct. States with which Amgen executes a Medicaid State Settlement
Agreement in the form to which Amgen and the National Association of Medicaid Fraud Control
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Units (“NAMFCU”) Negotiating Team have agreed, or in a form otherwise agreed to by Amgen
and an individual State, shall be defined as “Medicaid Participating States.”
E.
The United States contends that Amgen submitted or caused to be submitted
claims for payment to the Medicare Program (Medicare), Title XVIII of the Social Security Act,
42 U.S.C. §§ 1395-1395kkk-1; the TRICARE Program, 10 U.S.C. §§ 1071-1110a; the FEHBP, 5
U.S.C. §§ 8901-8914; the Veterans Affairs Program, 38 U.S.C. §§ 1701-1743; the Railroad
Retirement Medicare Program, administered under the Railroad Retirement Act of 1974, 45
U.S.C. §§ 231-231v, by the United States Railroad Retirement Board; and the Medicaid Program
(Medicaid), 42 U.S.C. §§ 1396-1396w.
F.
Relators in the above Civil Actions contend that Amgen engaged in the following
conduct, as a result of which conduct Relators further contend that Amgen knowingly caused
false and/or fraudulent claims for Covered Drugs to be submitted to, or caused purchase by,
Medicare, Medicaid, and other Federal health care programs: (1) Amgen promoted the use of
Aranesp for certain off-label indications, including for Anemia of Cancer, Anemia of Chronic
Disease, and Myelodysplastic Syndrome, including through the use of articles in which Amgen’s
authorship role was not fully disclosed; (2) Amgen promoted the use of Aranesp for certain offlabel dosing regimens, including bi-weekly and front loading of dosing in oncology as well as
every 3 week and monthly dosing in nephrology; (3) Amgen promoted the use of the drug Enbrel
for the off-label indication mild psoriasis and an off-label dosing regimen for psoriasis patients
and, during the period from April 30, 2004 to September 12, 2012, made unsupported or
insufficiently supported claims regarding Enbrel’s safety and superiority for the treatment of
plaque psoriasis and/or promoted Enbrel for adjunctive use with systemic or topical therapy for
treatment of patients with plaque psoriasis; (4) Amgen promoted the use of the drug Neulasta in
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patients whose incidence of febrile neutropenia is under 38% and by claiming that Neulasta is
superior to Neupogen, including through the use of articles in which Amgen’s authorship role
was not fully disclosed; and (5) Amgen provided kickbacks relating to the sale of the Covered
Drugs, and inaccurately reported and manipulated the Average Sales Prices, Best Prices and
Average Manufacturer Prices for the Covered Drugs, including through promotion of selfadministration of Aranesp and of overfill. Unless otherwise stated in Paragraph F or G, the
relevant time period for the above-described conduct is the period described in the relevant
complaint through September 30, 2011.
G.
The United States contends that it has certain civil claims against Amgen for
engaging in the following conduct as a result of which the United States further contends that
Amgen knowingly caused false and/or fraudulent claims for Covered Drugs to be submitted to,
or caused purchases by, Medicare, Medicaid, or other Federal health care programs. The
conduct alleged by Relators and stated in Paragraph F together with the conduct set forth in
Paragraph G are together hereinafter referred to as “Covered Conduct”:
1.
Aranesp:
a.
During the period from September 17, 2001 to September 30, 2011, Amgen
knowingly promoted the sale and use of Aranesp for indications which were (a) not
approved by the Food and Drug Administration (“FDA”) (hereinafter in this document
indications not approved by FDA shall be referred to as “Off Label Uses”) and (b) not
medically accepted indications, including anemia caused by cancer, anemia caused by
chronic disease, chronic anemia, and anemia caused by myelodysplastic syndrome,
including through the use of journal articles that were insufficient to support the safety
and efficacy of the Off Label Uses, and by improperly obtaining compendia listings to try
to establish the Off Label Uses as medically accepted indications and thereby seek
coverage by Federal health care programs for the Off Label Uses; and
b.
During the period from September 17, 2001 to September 30, 2011, Amgen
knowingly promoted the sale and use of Aranesp for dosing intervals, amounts, or
regimens that were (a) not approved by the FDA (hereinafter in this document dosing
intervals, amounts, or regimens that were not approved by the FDA shall be referred to as
“Off Label Regimens”) and (b) not reasonable and necessary for the treatment of
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chemotherapy-induced anemia and anemia associated with chronic renal failure, also
known as chronic kidney disease, including through the use of journal articles that were
insufficient to support the safety and efficacy of the Off Label Regimens, and by
improperly obtaining compendia listings to try to establish the Off Label Regimens as
reasonable and necessary and thereby seek coverage by Federal health care programs for
the Off Label Regimens.
2.
Enbrel:
During the period from January 1, 2003 to September 30, 2011, Amgen
knowingly promoted the sale and use of Enbrel for patients with mild psoriasis, (a) an Off
Label Use and (b) not a medically accepted indication for the purpose of coverage by
Federal health care programs.
3.
Neulasta:
During the period from January 31, 2002 to September 16, 2005, Amgen
knowingly promoted the sale and use of Neulasta for patients with an incidence of febrile
neutropenia of less than 38%, (a) an Off Label Use and (b) not a medically accepted
indication for the purpose of coverage by Federal health care programs.
As a result of the foregoing conduct set forth in Paragraphs G.1-3 above, Amgen
knowingly violated the False Claims Act, 31 U.S.C. § 3729 et seq. by causing the
submission of claims for Aranesp, Enbrel, and Neulasta for indications which were not
medically accepted and intervals, amounts, or regimens not reimbursable by Medicare
and other Federal health care programs.
4.
During the period from January 1, 2001 to September 30, 2011, in violation of the
Federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, and/or the False Claims Act, 31
U.S.C. § 3729, et seq., Amgen offered or paid, or caused to be paid directly and indirectly
through Amerisource Bergen Specialty Group, Amerisource Bergen Corp., Cardinal
Health Specialty Pharmaceutical Distribution, International Nephrology Network,
International Oncology Network, Onmark, National Oncology Alliance, Oncology
Supply, Inc., and Oncology Therapeutics, Inc., to health care providers, including,
physicians, pharmacists, physician organizations, hospitals, managed care organizations,
and group purchasing organizations and physician practice management organizations,
remuneration, specifically in the form of cash, free product, free samples, product
overfill, dinners, travel, hotels, consulting fees, education and research grants, free
consulting services, free reimbursement support services to assist physicians to secure
coverage for Amgen products, improper remuneration disguised as proper discounts and
rebates, improperly bundled products, payments for phony data collection studies and
information collection programs, honoraria and speaker fees, for the purpose of
influencing health care providers’ selection and utilization of Aranesp, Enbrel, Epogen,
Neulasta, Neupogen, and Sensipar regardless of whether the product was administered,
reimbursable by federal health care programs, or medically necessary (the “Paragraph
G.4 Conduct”).
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5.
During the period from April 30, 2004 to January 1, 2008, Amgen knowingly
reported inaccurate Average Sales Prices (“ASP”) for Aranesp, Epogen, Neulasta, and
Neupogen by failing to account properly for price concessions, including group
purchasing organization volume discounts, prompt pay discounts, cash discounts, free
goods that are contingent on any purchase requirement, chargebacks, rebates, and price
concessions disguised as bona fide service fees, in the calculation of ASP. Amgen
employees and agents were directed to explain the profitability of the inaccurate ASP.
6.
During the period from April 30, 2004 to September 30, 2011, Amgen knowingly
reported inaccurate ASP for Aranesp, Epogen, Neulasta, and Neupogen by failing to
account properly for price concessions including rebates, volume discounts and free
goods that were contingent on any purchase requirement, referred to in the Complaints as
“bundled pricing” and “overfill.” Amgen employees and agents were directed to explain
the profitability of the inaccurate ASP.
7.
During the period from January 1, 2001 to September 30, 2011, Amgen
knowingly reported inaccurate Best Prices and Average Manufacturer Prices for Aranesp,
Enbrel, Epogen, Neulasta, Neupogen and Sensipar by failing to include remuneration,
specifically in the forms outlined in the Paragraph G.4 Conduct, that was paid to health
care providers and that was conditioned on purchase of Amgen products in violation of
the Medicaid Rebate Statute, 42 U.S.C. § 1396r-8.
8.
Notwithstanding the foregoing, the “Covered Conduct” shall not include:
a.
Allegations pertaining to Amgen alleged in the Fourth Amended Complaint (Dkt.
No. 76) filed in United States et al. ex rel. Streck v. Allergan, Inc., et al., CA No. 08-5135
(E.D. Pa.);
b.
Claims that Amgen unlawfully marketed the spread for its products; that is, that
Amgen promoted the profit margins between the prices at which its products were sold to
Amgen’s customers and the higher Medicare and/or Medicaid reimbursement prices for
those products, knowing that the prices it reported to drug pricing compendia (such as
First Data Bank) – specifically, AWP and Wholesale Acquisition Cost (“WAC”) – were
higher than they should have been, that those reported higher prices would be used and/or
relied upon by state Medicaid programs to set reimbursement rates, and that the
difference between Amgen’s reported prices and the actual sales prices to its customers
created substantial profit margins for pharmacists and medical providers as a result of
state Medicaid programs’ reimbursement methodologies; and
c.
Allegations pertaining to Amgen alleged in the Third Amended Complaint filed in
United States et al. ex rel. Piacentile, et al. v. Amgen, Inc., et al., CV-04-3983 (E.D.N.Y)
(the “Action”) to the extent the claims currently alleged in the Action (the “Allegations”)
are dismissed with prejudice as to Relators Piacentile and Kilcoyne exclusively pursuant
to 31 U.S.C. § 3730 (c)(2)(A). For avoidance of doubt, this paragraph 8(c) shall not
apply as to any of the Covered Conduct that could be construed as having been alleged by
Relators Piacentile and/or Kilcoyne but that is dismissed by a Court for any other reason,
including pursuant to Rule 9(b) Fed. R. Civ. P. or 31 U.S.C. §§ 3730 (e)(4)(A), or (b)(5).
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H.
This Settlement Agreement is made in compromise of disputed claims. This
Settlement Agreement is neither an admission of liability by Amgen nor a concession by the
United States or Relators that their claims are not well founded. Amgen expressly denies the
allegations of the United States and the Relators set forth herein and in the Civil Actions and
denies that it, or its subsidiaries or affiliates, have engaged in any wrongful conduct in
connection with the Covered Conduct except as to such admissions as Amgen makes in
connection with its guilty plea under the Plea Agreement. Neither this Agreement, its execution,
nor the performance of any obligation under it, including any payment, nor the fact of settlement,
is intended to be, or shall be understood as, an admission of liability or wrongdoing, or other
expression reflecting upon the merits of the dispute by Amgen.
I.
Relators and/or their counsel claim entitlement under 31 U.S.C. § 3730(d) to a
share of the proceeds of this Settlement Agreement and to Relators’ reasonable expenses,
attorneys’ fees and costs.
J.
To avoid the delay, uncertainty, inconvenience, and expense of protracted
litigation of the above claims, and in consideration of the mutual promises and obligations of this
Settlement Agreement, the Parties agree and covenant as follows:
TERMS AND CONDITIONS
1.
Amgen shall pay to the United States and the Medicaid Participating States,
collectively, $612,174,030 together with interest accrued thereon as follows: at a rate of 1.625%
from October 12, 2011, continuing until and including the day before payment is made on the
amount of $598,174,030 and at a rate of 1.25% from September 21, 2012, continuing until and
including the day before payment is made on the amount of $14,000,000 (collectively the
“Settlement Amount”). The Settlement Amount shall constitute a debt immediately due and
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owing to the United States and the Medicaid Participating States on the Effective Date of this
Agreement. This debt shall be discharged by payments to the United States and the Medicaid
Participating States, under the following Terms and Conditions:
a.
Amgen shall pay the United States the sum of $587,253,356 plus accrued interest
(the “Federal Settlement Amount”). The Federal Settlement Amount shall consist of
$574,796,083, plus accrued interest at the rate of 1.625% per annum from October 12,
2011, continuing until and including the day before payment is made and $12,457,273,
plus accrued interest at a rate of 1.25% from September 21, 2012, continuing until and
including the day before payment is made. The Federal Settlement Amount shall be paid
no later than seven (7) business days (i) after this Agreement is fully executed by the
Parties and delivered to Amgen’s attorneys; or (ii) the Court accepts a Fed. R. Crim. P.
11(c)(1)(C) guilty plea by Amgen as described in Recitals Paragraph C in connection
with the Criminal Action and imposes the agreed upon sentence, whichever occurs later.
The Federal Settlement Amount shall be paid by electronic funds transfer pursuant to
written instructions to be provided by the United States Attorney’s Office for the Eastern
District of New York.
b.
Amgen shall pay the Medicaid Participating States the sum of $24,920,674 plus
accrued interest (the “State Settlement Amount”) in accordance with the Medicaid State
Settlement Agreements. The State Settlement Amount shall consist of $23,377,947 plus
accrued interest at the rate of 1.625% per annum from October 12, 2011, continuing until
and including the day before payment is made and $1,542,727 plus accrued interest at a
rate of 1.25% from September 21, 2012, continuing until and including the day before
payment is made.
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c.
All parties to this Agreement recognize that Amgen is making the effectiveness
of its signature conditional upon the Court accepting the criminal plea and imposing the
agreed-upon sentence. If the criminal plea and agreed-upon sentence are not accepted by
the Court and Amgen withdraws its signature from this Agreement, Amgen will not
plead, argue, or otherwise raise any defenses under theories of statute of limitations,
laches, estoppel, or similar theories, to any civil or administrative claims, actions, or
proceedings arising from the Covered Conduct that are brought by the United States
within 120 days of Amgen’s withdrawal from this Agreement, except to the extent such
defenses were available on the day on which the qui tam complaints, referenced in the
Recitals Paragraph B, above, were filed.
2.
Subject to the exceptions in Paragraph 7 (concerning excluded claims) below, and
conditioned upon Amgen’s full payment of the Settlement Amount, the United States releases
Amgen, together with its current and former parent corporations; direct and indirect subsidiaries;
brother or sister corporations; divisions; current or former owners; and officers, directors,
employees and affiliates; and the successors, transferees, and assigns of any of them, from any
civil or administrative monetary claim the United States has or may have for the Covered
Conduct under the False Claims Act, 31 U.S.C. §§ 3729-3733; the Civil Monetary Penalties
Law, 42 U.S.C. § 1320a-7a; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812;
any statutory provision creating a cause of action for civil damages, civil penalties or
disgorgement for which the Civil Division of the Department of Justice has actual and present
authority to assert and compromise pursuant to 28 C.F.R. Part O, Subpart I, 28 CFR § 0.45(d) or
the common law theories of payment by mistake, breach of contract, unjust enrichment, and
fraud.
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3.
a. In consideration of the obligations of Amgen set forth in the Terms and
Conditions of this Settlement Agreement, and conditioned upon Amgen’s full payment of the
Settlement Amount in accordance with the terms of Paragraph 1, above, Relators, for themselves
and for their heirs, successors, attorneys, agents, assigns, partners, and any other person or entity
acting on their behalf or asserting their rights, agree to dismiss with prejudice any currently
pending claims against Amgen in any federal or state court or in any other forum, and fully and
finally release, waive and forever discharge Amgen, its predecessors, and its current and former
divisions, parents, subsidiaries, related entities, affiliates, successors, and assigns, and their
current and former directors, trustees, agents, officers, employees, representatives, attorneys,
consultants, successors, heirs, executors, administrators, assigns, individually and collectively,
current and former, (collectively, the “Amgen Entities 1”) from any claims or allegations that
Relators or any of their partners have standing to bring, which Relators or any of their partners
may now have or claim to have against the Amgen Entities from any and all claims, claims for
relief, actions, rights, causes of action, suits, debts, obligations, liabilities, demands, losses,
damages (including treble damages and any civil penalties), punitive damages, costs and
expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, in
law or in equity, in contract or tort, or under any state or federal statute or regulation or arising in
any way out of or connected in any way with the facts, claims, and circumstances alleged in,
arising under, or arising from the filing of the Civil Actions, or from any past activities and
actions of the Amgen Entities, or from any civil monetary claim the United States has or may
have for the Covered Conduct under the False Claims Act, 31 U.S.C. § 3730(b) and (d) or any
1
The term Amgen Entities, as used in this Agreement, does not refer or apply to any
named defendants in the Civil Actions except Amgen Inc., Amgen Corp, and Amgen
Washington.
.
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similar federal or state statute. Relators’ release of the Amgen Entities does not extend to any
claim by Relators and/or their Counsel for reasonable attorneys’ fees, expenses and costs
resulting from the Civil Actions pursuant to 31 U.S.C. § 3730(d) or any analogous state statutes
or laws; the claims described in Appendix 1 to this Agreement, including any state or federal
court actions to appeal, confirm, or reject the claims set forth in Appendix 1; any pending claim
against any defendant in the Civil Actions other than the Amgen Entities; nor to any claims
reserved and not released by this Agreement. For avoidance of doubt, nothing in this Paragraph
3.a. shall preclude Relators from bringing claims against the Amgen Entities based on conduct
by the Amgen entities occurring after the date of this Agreement.
b. In consideration of the obligations of the Relators set forth in this Agreement, the
Amgen Entities (as defined in Paragraph 3 of the Terms and Conditions of this Agreement) fully
and finally release, waive, and forever discharge each of the Relators and their respective heirs,
successors, assigns, agents, partners, and attorneys, individually and collectively, from any
claims or allegations the Amgen Entities have asserted or could have asserted, arising from the
Covered Conduct and from all liability, claims, demands, actions or causes of action whatsoever,
whether known or unknown, fixed or contingent, in law or in equity, in contract or in tort, under
any federal or state statute or regulation, or in common law, that the Amgen Entities, their heirs,
successors, attorneys, agents and assigns otherwise would have standing to bring as of the date of
this Agreement. Provided, however, that the Amgen Entities expressly reserve any defenses or
claims related to Relators’ and Relators’ counsel’s claims for reasonable attorneys’ fees,
expenses and costs pursuant to 31 U.S.C. § 3730(d) or any similar federal or state statute; and
any defenses or claims related to the claims described in Appendix 1 to this Agreement; and any
claims or defenses related to the claims which are reserved or not released by this Agreement.
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4.
In consideration of the obligations of Amgen in this Agreement and the Corporate
Integrity Agreement (CIA), entered into between OIG-HHS and Amgen, and conditioned upon
Amgen’s full payment of the Settlement Amount, the OIG-HHS agrees to release and refrain
from instituting, directing, or maintaining any administrative action seeking exclusion from
Medicare, Medicaid, and other Federal health care programs (as defined in 42 U.S.C. § 1320a7b(f)) against Amgen under 42 U.S.C. § 1320a-7a (Civil Monetary Penalties Law) or 42 U.S.C.
§ 1320a-7(b)(7) (permissive exclusion for fraud, kickbacks, and other prohibited activities) for
the Covered Conduct, except as reserved in Paragraph 7 (concerning excluded claims), below,
and as reserved in this Paragraph. The OIG-HHS expressly reserves all rights to comply with
any statutory obligations to exclude Amgen from Medicare, Medicaid, and other Federal health
care programs under 42 U.S.C. § 1320a-7(a) (mandatory exclusion) based upon the Covered
Conduct. Nothing in this Paragraph precludes the OIG-HHS from taking action against entities
or persons, or for conduct and practices, for which claims have been reserved in Paragraph 7,
below.
5.
In consideration of the obligations of Amgen set forth in this Agreement, and
conditioned upon Amgen’s full payment of the Settlement Amount, TMA agrees to release and
refrain from instituting, directing, or maintaining any administrative action seeking exclusion
from the TRICARE Program against Amgen under 32 C.F.R. § 199.9 for the Covered Conduct,
except as reserved in Paragraph 7 (concerning excluded claims), below, and as reserved in this
Paragraph. TMA expressly reserves authority to exclude Amgen from the TRICARE Program
under 32 C.F.R. §§ 199.9 (f)(1)(i)(A), (f)(1)(i)(B), and (f)(1)(iii), based upon the Covered
Conduct. Nothing in this Paragraph precludes TMA or the TRICARE Program from taking
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action against entities or persons, or for conduct and practices, for which claims have been
reserved in Paragraph 7, below.
6.
In consideration of the obligations of Amgen in this Agreement, and conditioned
upon Amgen’s full payment of the Settlement Amount, OPM agrees to release and refrain from
instituting, directing, or maintaining any administrative action against Amgen its predecessors
and current and former parents, affiliates, divisions, subsidiaries, successors, transferees, heirs,
and assigns, and their current and former directors, officers and employees, individually and
collectively, under 5 U.S.C. § 8902a or 5 C.F.R. Part 970 for the Covered Conduct, except as
reserved in Paragraph 7 (concerning excluded claims), below, except if required by 5 U.S.C.
§ 8902a(b). Nothing in this Paragraph precludes OPM from taking action against entities or
persons, or for conduct and practices, for which claims have been reserved in Paragraph 7,
below.
7.
Notwithstanding the releases given in Paragraphs 2 through 6 of this Agreement,
or any other term of this Agreement, the following claims of the United States are specifically
reserved and are not released:
a.
Any liability arising under Title 26, U.S. Code (Internal Revenue Code);
b.
Any criminal liability;
c.
Except as explicitly stated in this Agreement, any administrative liability,
including mandatory exclusion from Federal health care programs;
d.
Any liability to the United States (or its agencies) for any conduct other
than the Covered Conduct;
e.
Any liability based upon obligations created by this Agreement;
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f.
Any liability of individuals other than those specifically released in
Paragraph 2;
g.
Any liability for express or implied warranty claims or other claims for
defective or deficient products or services, including quality of goods and
services;
h.
Any liability for failure to deliver goods and services due; or
i.
Any liability for personal injury or property damage or for other
consequential damages arising from the Covered Conduct.
8.
Relators and their heirs, successors, attorneys, agents, and assigns shall not object
to this Agreement but agree and confirm that this Agreement is fair, adequate, and reasonable
under all the circumstances, and expressly waive the opportunity for a hearing on any objections
to the Settlement Agreement pursuant to 31 U.S.C. § 3730(c)(2)(B) and that the Settlement
Amounts for each individual claim are fair, adequate, and reasonable under all the circumstances.
In connection with this Agreement and the Civil Actions, Relators and their heirs, successors,
attorneys, agents, and assigns agree that neither this Agreement, any intervention by the United
States in the Civil Actions in order to dismiss the Civil Actions, nor any dismissal of the Civil
Actions, shall waive or otherwise affect the ability of the United States to contend that provisions
in the False Claims Act, including 31 U.S.C. §§ 3730(d)(3) and 3730(e), bar Relators from
sharing in the proceeds of this Agreement. Moreover, the United States and Relators and their
heirs, successors, attorneys, agents, and assigns agree that they each retain all of their rights
pursuant to the False Claims Act on the issue of the share percentage, if any, that Relators should
receive of any proceeds of the settlement of their claim(s). Relators, for themselves individually
and for their heirs, successors, agents and assigns, fully and finally release, waive, and forever
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discharge the United States, its officers, agents and employees from any claims arising from or
relating to 31 U.S.C. § 3730; from any claims arising from the filing of the Civil Actions; and in
full settlement of any claims Relators may have under this Agreement, other than the claims by
the Relators for a share of the Settlement Amount.
9.
Amgen waives and shall not assert any defenses Amgen may have to any criminal
prosecution or administrative action relating to the Covered Conduct that may be based in whole
or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution,
this Agreement bars a remedy sought in such criminal prosecution or administrative action.
Nothing in this paragraph or any other provision of this Agreement constitutes an agreement by
the United States concerning the characterization of the Settlement Amount for purposes of the
Internal Revenue laws, Title 26 of the United States Code.
10.
Amgen fully and finally releases the United States, its agencies, officers, agents,
employees, and servants, from any claims (including attorney’s fees, costs, and expenses of
every kind and however denominated) that Amgen has asserted, could have asserted, or may
assert in the future against the United States, its agencies, officers, agents, employees, and
servants, related to the Covered Conduct and the United States’ investigation and prosecution
thereof.
11.
Should this Agreement be challenged by any person as not fair, adequate or
reasonable pursuant to 31 U.S.C. § 3730(c)(2)(B), Amgen agrees to assist the United States to
defend this Agreement.
12.
The Settlement Amount shall not be decreased as a result of the denial of claims
for payment now being withheld from payment by any Medicare carrier or intermediary, TMA,
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FEHBP, OPM, the Department of Veterans Affairs or the Railroad Retirement Board carrier or
payer, or any state payer, related to the Covered Conduct; and Amgen agrees not to resubmit to
any Medicare carrier or intermediary, TMA, FEHBP, OPM, the Department of Veterans Affairs
or the Railroad Retirement Board carrier or payer, or any state payer any previously denied
claims related to the Covered Conduct, and agrees not to appeal any such denials of claims.
13.
Amgen agrees to the following:
a.
Unallowable Costs Defined: All costs (as defined in the Federal Acquisition
Regulation, 48 C.F.R. § 31.205-47; and in Titles XVIII and XIX of the Social Security Act, 42
U.S.C. §§ 1395-1395kkk-1 and 1396-1396w-5; and the regulations and official program
directives promulgated thereunder) incurred by or on behalf of Amgen, its present or former
officers, directors, employees, shareholders, and agents in connection with:
(1)
the matters covered by this Agreement and related plea agreement;
(2)
the United States’ audit(s) and civil and criminal investigation(s) of the matters
covered by this Agreement;
(3)
Amgen’s investigation, defense, and corrective actions undertaken in response to
the United States’ audit(s) and civil and criminal investigation(s) in connection with the matters
covered by this Agreement (including attorney’s fees);
(4)
the negotiation and performance of this Agreement and Plea Agreement;
(5)
the payment Amgen makes to the United States pursuant to this Agreement and
any payments that Amgen may make to Relator, including costs and attorneys’ fees; and
(6)
the negotiation of, and obligations undertaken pursuant to, the CIA to:
(i)
retain an independent review organization to perform annual reviews as
described in Section III of the CIA; and
16
(ii)
prepare and submit reports to the OIG-HHS, are unallowable costs for
government contracting purposes and under the Medicare Program, Medicaid Program,
TRICARE Program, and FEHBP (hereinafter referred to as Unallowable Costs). However,
nothing in this paragraph13.a.(6) that may apply to the obligations undertaken pursuant to the
CIA affects the status of costs that are not allowable based on any other authority applicable to
Amgen.
b.
Future Treatment of Unallowable Costs: Unallowable Costs shall be separately
determined and accounted for by Amgen, and Amgen shall not charge such Unallowable Costs
directly or indirectly to any contracts with the United States or any State Medicaid program, or
seek payment for such Unallowable Costs through any cost report, cost statement, information
statement, or payment request submitted by Amgen or any of its subsidiaries or affiliates to the
Medicare, Medicaid, TRICARE, or FEHBP Programs.
c.
Treatment of Unallowable Costs Previously Submitted for Payment: Amgen
further agrees that within 90 days of the Effective Date of this Agreement it shall identify to
applicable Medicare and TRICARE fiscal intermediaries, carriers, and/or contractors, and
Medicaid and FEHBP fiscal agents, any Unallowable Costs (as defined in this Paragraph)
included in payments previously sought from the United States, or any State Medicaid program,
including, but not limited to, payments sought in any cost reports, cost statements, information
reports, or payment requests already submitted by Amgen or any of its subsidiaries or affiliates,
and shall request, and agree, that such cost reports, cost statements, information reports, or
payment requests, even if already settled, be adjusted to account for the effect of the inclusion of
the unallowable costs. Amgen agrees that the United States, at a minimum, shall be entitled to
recoup from Amgen any overpayment plus applicable interest and penalties as a result of the
17
inclusion of such Unallowable Costs on previously-submitted cost reports, information reports,
cost statements, or requests for payment.
Any payments due after the adjustments have been made shall be paid to the United
States pursuant to the direction of the Department of Justice and/or the affected agencies. The
United States reserves its rights to disagree with any calculations submitted by Amgen or any of
its subsidiaries or affiliates on the effect of inclusion of Unallowable Costs (as defined in this
Paragraph) on Amgen or any of its subsidiaries or affiliates’ cost reports, cost statements, or
information reports.
d.
Nothing in this Agreement shall constitute a waiver of the rights of the United
States to audit, examine, or re-examine Amgen’s books and records to determine that no
Unallowable Costs have been claimed in accordance with the provisions of this Paragraph.
14.
Amgen agrees to cooperate fully and truthfully with the United States’
investigation of individuals and entities not released in this Agreement. Upon reasonable notice,
Amgen shall encourage, and agrees not to impair, the cooperation of its directors, officers, and
employees, and shall use its best efforts to make available, and encourage, the cooperation of
former directors, officers, and employees for interviews and testimony, consistent with the rights
and privileges of such individuals. Amgen further agrees to furnish to the United States, upon
request, complete and unredacted copies of all non-privileged documents, reports, memoranda of
interviews, and records in its possession, custody, or control concerning any investigation of the
Covered Conduct that it has undertaken, or that has been performed by another on its behalf.
15.
This Agreement is intended to be for the benefit of the Parties only. The Parties
do not release any claims against any other person or entity, except to the extent provided for in
Paragraph 16 (waiver for beneficiaries paragraph), below.
18
16.
Amgen agrees that it waives and shall not seek payment for any of the health care
billings covered by this Agreement from any health care beneficiaries or their parents, sponsors,
legally responsible individuals, or third party payors based upon the claims defined as Covered
Conduct.
17.
a. Upon receipt of payment of the Settlement Amount described in Paragraph 1,
above, the Parties shall promptly sign and file in each of the Civil Actions a Joint Stipulation of
Dismissal of the Civil Action pursuant to Rule 41(a)(1) as follows:
(1)
Each stipulation of dismissal shall be with prejudice as to the United States’ and
Relators’ claims against Amgen and all named Amgen defendants in the Civil Actions as to the
Covered Conduct in each Civil Action pursuant to and consistent with the Terms and Conditions
of this Agreement; and
(2)
Each stipulation shall be without prejudice as to the United States and with
prejudice as to Relators as to all other claims against Amgen, and without prejudice as to the
United States and Relators as to all other entities and individuals named as defendants in the
Civil Actions pursuant to and consistent with the Terms and Conditions of this Agreement.
b.
Provided, however, that the following claims shall not be dismissed, unless they
are settled, adjudicated, or otherwise resolved, and any required consent by the United States is
obtained, and the Court is so informed:
(1)
Relators’ claims for reasonable attorneys’ fees, expenses, and costs pursuant to 31
U.S.C. § 3730(d);
(2)
Relators’ claims under § 3730(h) and comparable state laws, or in connection
with any claim reserved in Paragraph 3 and Appendix 1;
19
(3)
Relators’ claims for a relator’s share under the Medicaid State Settlement
Agreements;
(4)
Relators’ claims for a relator’s share under 31 U.S.C. § 3730(d).
18.
Each Party shall bear its own legal and other costs incurred in connection with
this matter, including the preparation and performance of this Agreement, except Relators
reserve their rights against Amgen to seek attorneys’ fees, costs and expenses pursuant to 31
U.S.C. § 3730(d) and comparable state laws, or in connection with any claim reserved in
Paragraph 3 and Appendix 1.
19.
Each party and signatory to this Agreement represents that it freely and
voluntarily enters in to this Agreement without any degree of duress or compulsion.
20.
This Agreement is governed by the laws of the United States. The Parties agree
that the exclusive jurisdiction and venue for any dispute arising between and among the Parties
under this Agreement shall be the United States District Court for the Eastern District of New
York, except that the jurisdiction for any dispute regarding claims for reasonable attorneys’ fees,
expenses, and costs pursuant to 31 U.S.C. § 3730(d) and/or for wrongful termination under
subsection 3730(h) and comparable state laws, or in connection with any claim reserved in
Paragraph 3 and Appendix 1, shall be the district court in which the Civil Action was pending on
the Effective Date of this Agreement. For purposes of construing this Agreement, this
Agreement shall be deemed to have been drafted by all Parties to this Agreement and shall not,
therefore, be construed against any Party for that reason in any subsequent dispute.
21.
This Agreement constitutes the complete agreement between the Parties. This
Agreement may not be amended except by written consent of the Parties.
20
22.
The undersigned counsel represent and warrant that they are fully authorized to
execute this Agreement on behalf of the persons and entities indicated below.
23.
This Agreement may be executed in counterparts, each of which constitutes an
original and all of which constitute one and the same Agreement.
24.
This Agreement is binding on Amgen’s successors, transferees, heirs, and assigns.
25.
This Agreement is binding on Relators’ successors, transferees, heirs, and assigns.
26.
All parties consent to the United States’ disclosure of this Agreement, and
information about this Agreement, to the public.
27.
This Agreement is effective on the date of signature of the last signatory to the
Agreement (Effective Date of this Agreement). Facsimiles of signatures shall constitute
acceptable, binding signatures for purposes of this Agreement.
21
FOR THE UNITED STATES OF AMERICA
MARSHALL L. MILLER
Acting United States Attorney
Eastern District of New York
DATED:______________
BY: ______________________________
DEBORAH B. ZWANY
PAUL KAUFMAN
ERIN ARGO
Assistant U.S. Attorneys
STUART F. DELERY
Principal Deputy Assistant Attorney General
DATED:______________
BY:_______________________________
JESSICA CHAMPA
JOHN HENEBERY
DOUGLAS ROSENTHAL
Trial Attorneys
Commercial Litigation Branch
Civil Division
United States Department of Justice
22
CARMEN MILAGROS ORTIZ
United States Attorney
District of Massachusetts
DATED:______________
BY: ______________________________
ZACHARY CUNHA
BRIAN A. PEREZ-DAPLE
Assistant U.S. Attorneys
JENNY A. DURKAN
United States Attorney
Western District of Washington
DATED:______________
BY: ______________________________
HAROLD MALKIN
Assistant U.S. Attorney
DATED:______________
BY: _____________________________
ROBERT K. DeCONTI
Assistant Inspector General for Legal Affairs
Office of Inspector General
United States Department of
Health and Human Services
DATED:______________
BY: _____________________________
PAUL J. HUTTER
General Counsel
TRICARE Management Activity
United States Department of Defense
23
DATED:______________
BY: _____________________________
SHIRLEY PATTERSON
Assistant Director for Federal Employee
Insurance Operations
United States Office of Personnel Management
DATED:______________
BY: _________________________________
DAVID COPE
Assistant Inspector General
for Legal Affairs
United States Office of Personnel Management
24
FOR AMGEN INC.
AMGEN INC.
DATED:______________
By: ___________________________________
DAVID J. SCOTT
Sr. Vice President, General Counsel
Amgen Inc.
DATED:______________
By:_________________________________
DAVID S. ROSENBLOOM
McDERMOTT, WILL & EMERY, LLP.
227 West Monroe Street
Chicago, Illinois 60606-5096
Attorneys for Amgen Inc.
DATED:
By: _________________________________
BRIEN T. O’CONNOR
KIRSTEN V. MAYER
ROPES & GRAY LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
Attorneys for Amgen Inc.
25
FOR RELATOR PAMELA ARRIAZOLA
DATED:
By: _________________________________
PAM ARRIAZOLA
BRIAN KENNEY
DATED:
By: _________________________________
BRIAN KENNEY
TAVY DEMING
KENNEY & McCAFFERTY, PC
1787 Sentry Parkway West
Building 18 Suite 410
Blue Bell, PA 19422
Counsel to Relator Pam Arriazola
26
FOR RELATOR THOMAS CANTOR
DATED:
Dated: _________________
By: _________________________________
THOMAS CANTOR
PHILLIPS & COHEN LLP
By: ___________________________
MARY LOUISE COHEN
ERIKA A. KELTON
LARRY P. ZOGLIN
Phillips & Cohen LLP
2000 Massachusetts Ave, N.W.
Washington, D.C. 20036
Counsel to Relator Thomas Cantor
27
FOR RELATOR DJAE PARTNERSHIP
DATED:
By: _________________________________
DAVID FARBER, INDIVIDUALLY
AND ON BEHALF OF DJAE
PARTNERSHIP 2011, LLP
DATED:
By: _________________________________
EMILY FARBER, INDIVIDUALLY
AND ON BEHALF OF DJAE
PARTNERSHIP 2011, LLP
DATED:
By: _________________________________
W. SCOTT SIMMER
Blank Rome LLP
Watergate 600 New Hampshire Avenue NW
Washington, DC 20037
Counsel to Relators DJAE Partnership 2011, LLP,
David Farber and Emily Farber
28
FOR RELATORS ELANA FERRANTE AND MARC ENGELMAN
DATED:
By: _________________________________
ELENA FERRANTE
DATED:
By: _________________________________
MARC ENGELMAN
DATED:
By: _________________________________
LYDIA B. COTZ
Cotz & Cotz
47 S. Franklin Turnpike
Ramsey, New Jersey 07446
Counsel to Relators Elena Ferrante and
Marc Engelman
29
FOR RELATOR DON HANKS
DATED:
By: _________________________________
DON HANKS
DATED:
By: _________________________________
ROB HENNIG
Law Offices of Rob Hennig
1875 Century Park E., Suite 1770
Los Angeles, California 90067
Counsel to Relator Don Hanks
30
FOR RELATOR MARSHALL S. HORWITZ
DATED:
By: _________________________________
MARSHALL S. HORWITZ
DATED:
By: _________________________________
STEVE W. BERMAN
Hagens Berman Sobol Shapiro LLP
1918 Eighth Ave., Ste. 3300
Seattle, WA 98101
Attorneys for Relator Marshall S. Horwitz
31
FOR RELATOR ANGELA KELLY
DATED:
By:
ANGELA KELLY A/K/A ANGELA SILVA
DATED:
By: _________________________________
DAVID W. SANFORD
ROSS B. BROOKS
GRANT E. MORRIS
Sanford Heisler LLP
Counsel to Angela Kelly a/k/a Angela Silva
32
FOR RELATOR JILL OSIECKI
DATED:
By: _________________________________
JILL OSIECKI
BRIAN KENNEY
DATED:
By: _________________________________
BRIAN KENNEY
TAVY DEMING
KENNEY & McCAFFERTY, PC
1787 Sentry Parkway West
Building 18 Suite 410
Blue Bell, PA 19422
Counsel to Relator Jill Osiecki
33
FOR RELATOR MICHAEL TUCKER
DATED:
By: _________________________________
MICHAEL TUCKER
DATED:
By: _________________________________
LYDIA B. COTZ
Cotz & Cotz
47 S. Franklin Turnpike
Ramsey, New Jersey 07446
Counsel to Relator Michael Tucker
DATED:
By: _________________________________
JOHN J. FAHY
RICHARD VUERNICK
Fahy Choi LLC
Meadows Office Complex
301 Route 17 North
Suite 900
Rutherford, New Jersey 07070
Counsel to Relator Michael Tucker
34
FOR RELATOR KASSIE WESTMORELAND
DATED:______________
__________________________
KASSIE WESTMORELAND
DATED:______________
_________________
__
SUZANNE E. DURRELL
DURRELL LAW OFFICE
180 Williams Avenue
Milton, Massachusetts 02186
DATED:______________
________________________
ROBERT M. THOMAS, JR.
THOMAS & ASSOCIATES
280 Summer Street, 5th Floor
Boston, Massachusetts 02210-1131
DATED:______________
_________________________
RORY DELANEY
7 Liberty Square, 2nd Floor
Boston, Massachusetts 02109
DATED:______________
___________________________
CHARLES F. KESTER
LAWRENCE M. ISENBERG
KESTER & ISENBERG
4505 Las Virgenes Road, Suite 203
Calabasas, California 91302
DATED:______________
_________________________
SILVIJA A. STRIKIS
Kellogg, Huber, Hansen, Todd,
Evans & Figel PLLC
1615 M Street, Suite 400
Washington, DC 20036
35
APPENDIX 1 – RELATING TO PARAGRAPH 3
The following shall constitute “the claims described in Appendix 1 to the Agreement,” as
referred to in Paragraphs 3(a) and (b) of this Agreement:
1.
2.
3.
4.
For Relator Engelman, the claims pending in:
(a)
Marc Engelman v. Amgen USA Inc., et al., 30-2008-00106725-CU-WT-CJC
(Orange County Superior Court, California).
(b)
Marc Engelman v. Amgen USA Inc. et al., American Arbitration Association Ref.
No. 72 160 0020 08.
For Relator Ferrante, the claims pending in:
(a)
In the Matter of Arbitration between Elena Ferrante and Amgen Inc. et al., JAMS
Ref No. 1420018077.
(b)
Amgen Inc. et al. v. Elena Ferrante, C-89-12 (Essex County Superior Court, New
Jersey).
(c)
Ferrante v Amgen, Superior Court of New Jersey, Law Division, Passaic County,
Docket No. PAS-L- 4215-12.
For Relator Hanks, the claims pending in:
(a)
Don Hanks v. Amgen Inc. et al., 56-2009-00342748-CU-WT-VTA (Ventura
County Superior Court, California).
(b)
Harris v. Amgen, Inc., CV-07-05442PSG (consolidated with Hanks v. Amgen,
Inc., CV-09-03973-PSG) (Central District California).
For Relator Tucker, the claims pending in:
(a)
5.
In the Matter of Arbitration between Michael Tucker and Amgen USA Inc., JAMS
Ref No.1425002319.
For Relator Westmoreland, the claims against the Amgen Entities described in:
(a)
Counts Eight and Nine only of the Fourth Amended Complaint in U.S. ex rel.
Westmoreland v. Amgen Inc. et al., 06-10972-WGY (D. Mass), provided,
however, that such claims may proceed only in arbitration, consistent with the
Stipulation to Binding Arbitration, Stay of Arbitrable Claims, and Stay of
Arbitration Pending Completion of Qui Tam Litigation, entered in the abovereferenced case on March 31, 2010.
36
6.
For Relator DJAE Partnership:
Employment claims of David Farber asserted in the letter to Brian McNamee, Sr. VP,
Human Resources at Amgen, dated October 23, 2012.
37