October 1, 2018 / 6:16 PM / in 2 months

UPDATE 4-AmerisourceBergen to pay $625 mln in U.S. civil fraud settlement

(Adds whistleblower payout, paragraph 11)

By Jonathan Stempel

NEW YORK, Oct 1 (Reuters) - AmerisourceBergen Corp, one of the largest U.S. drug wholesalers, will pay $625 million to resolve civil fraud charges over the sale of syringes containing drugs for cancer patients, double billing, and providing kickbacks to doctors.

The settlement announced on Monday by the U.S. Department of Justice boosts AmerisourceBergen's total payout to $885 million over its repackaging and distribution of pre-filled syringes that were not approved by the U.S. Food and Drug Administration.

In September 2017, the company's AmerisourceBergen Specialty Group unit pleaded guilty to a related misdemeanor, and paid $260 million of criminal fines and forfeitures.

The Chesterbrook, Pennsylvania-based company also entered a five-year corporate integrity agreement to ensure compliance with federal health care rules. It set aside money for the entire civil settlement in its fiscal year ended Sept. 30, 2017.

AmerisourceBergen admitted that from January 2001 to January 2014, its Medical Initiatives Inc pharmacy unit in Alabama shipped millions of syringes for patients undergoing chemotherapy that contained drugs prepared in an unsterile environment.

Authorities said AmerisourceBergen would harvest "overfill" from the original vials of such drugs as Aloxi, Anzemet, Kytril and generic Kytril, Neupogen and Procrit used to combat side effects of chemotherapy, such as nausea and anemia.

That enabled the company to create more doses than it bought, and generate at least $99.6 million of extra profit, authorities said.

AmerisourceBergen was also accused of billing multiple doctors for individual vials, causing them to bill the government more than once, and paying kickbacks to induce doctors to buy drugs through the pre-filled syringe program.

"ABC placed corporate profits over patients' needs, endangering the health of vulnerable cancer patients," U.S. Attorney Richard Donoghue in Brooklyn, New York said in a statement.

New York Attorney General Barbara Underwood said $99.9 million of the payout will go to state Medicaid programs.

Four whistleblowers including Michael Mullen, a former chief operating officer at AmerisourceBergen Specialty Group, will share $99 million from the payout, lawyers for Mullen said.

AmerisourceBergen said in a statement that the settlement reflects its acknowledgment that some practices at the now-closed Medical Initiatives unit "were not consistent with AmerisourceBergen's approach to corporate compliance."

The company's shares rose 57 cents to $92.79 on Monday. (Reporting by Jonathan Stempel in New York Editing by Bill Berkrot and Tom Brown)

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