5 Amgen Execs Plead the Fifth on Alleged Kickbacks Described in Spreadsheet

Last Updated Mar 2, 2011 6:12 PM EST

Five former Amgen (AMGN) employees and the office manager of one of their customers have asserted their Fifth Amendment rights against self-incrimination rather than testify in a civil case alleging that the company offered doctors the equivalent of kickbacks to prescribe the anemia drug Aranesp.

Their silence comes after the plaintiff in the case, former Amgen pharmacist Kassie Westmoreland, produced a set of spreadsheets that allegedly detail how much extra money doctors could make if they went along with Amgen's scheme to overbill Medicare.

If there's a management lesson here, it's, "if you are operating a kickback scheme at work, don't create a financial model of it in an Excel file."

Westmoreland alleges that Amgen supplied vials of Aranesp that contained more of the drug than doctors needed for each dose, allowing them to save the "overfill" for use on other patients. The docs then allegedly billed Medicare for both the regular doses they paid for and the free "overfill" they had not -- and that functioned as Amgen's kickback, Westmoreland claims. Amgen has denied the claims.

The former Amgen executives are not named in court papers. The sixth witness is described only as "the office manager of a medical provider who purchased Aranesp from Amgen." In pretrial depositions, the six witnesses refused to provide any substantive testimony about their role in the case. Subsequently, their lawyers demanded that the sections of the deposition transcripts where the witnesses took the Fifth be sealed and kept confidential, citing the "risk of embarrassment and harassment." Westmoreland's lawyers then moved to challenge the confidentiality demand; a judge has yet to rule.

Westmoreland's case was dismissed without prejudice last year, allowing her to file again with more detailed allegations. This time, she attached a set of spreadsheets describing the financial incentives for doctors who use Aranesp instead of Johnson & Johnson's (JNJ) Procrit:


A 300 milliliter vial of Aranesp actually contained 350.4 ml of the drug, raising the base rate that doctors could claim from Medicare from $1,422 to $1,661.

The witnesses' lawyers have yet to respond to the motion regarding their testimony. The New York State attorney general has alleged in a different but related case that Amgen CEO Kevin Sharer was aware that overfill levels in vials of Aranesp were manipulated.

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