(Adds details on court hearing, background)
By Nate Raymond
BOSTON, Oct 18 (Reuters) - A U.S. judge on Wednesday said he may reject a plea agreement that was part of Aegerion Pharmaceuticals Inc’s recent $36 million settlement with the U.S. Justice Department, saying he was not happy with its sentencing terms.
U.S. District Judge William Young at a court hearing in Boston held off on definitively not accepting the deal, in which the Novelion Therapeutics Inc unit would plead guilty to two misdemeanors related to its marketing of an expensive cholesterol drug. But he said his “instinct is to reject it.”
Young noted he had in prior cases criticized plea agreements that made the parties’ sentencing recommendations binding on the court. However, he said he would take further briefing on why he should accept the plea deal.
“I’ll carefully review it and inform you whether I accept it or not,” Young said.
The judge’s comments marked an unexpected complication for Aegerion to finalize a settlement with the Justice Department announced Sept. 22 aimed at resolving a long-running investigation centered on its cholesterol drug Juxtapid.
Prosecutors said that after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating high cholesterol in people with a rare genetic disease, Aegerion promoted it for patients who did not have the condition.
As part of a deal with the Justice Department, Aegerion agreed to plead guilty to two misdemeanor drug misbranding violations of the Food, Drug and Cosmetic Act and pay $36 million to resolve criminal and civil claims.
It also entered into a deferred prosecution agreement to resolve a charge that it conspired to violate the Health Insurance Portability and Accountability Act.
The settlements finalized agreements Aegerion disclosed in May 2016. The Cambridge, Massachusetts-based company in November 2016 merged with QLT Inc and became a subsidiary of the newly named Novelion.
Aegerion said in a statement that Young’s comments were “consistent with his previously stated views that he will only accept binding corporate plea agreements where there are ‘special reasons’ to do so.”
He had previously in 2012 and 2013 rejected similar corporate plea deals in cases against Orthofix Inc and APTx Vehicle Systems Ltd, saying the deals were “insufficiently protective of the public interest.”
At Wednesday’s hearing, Young cited those cases in saying it was not his practice to accept plea deals with binding sentencing recommendations.
He set a trial date for April 30, which he said would give the “parties time to continue their negotiations and review their positions.”
The case is U.S. v. Aegerion Pharmaceuticals Inc, U.S. District Court, District of Massachusetts, No. 17-cr-10288. (Reporting by Nate Raymond in Boston; Editing by Marguerita Choy and Chris Reese)