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Pharmaceutical Company Pleads Guilty to Misbranding Oncology Drugs

Executives of AmerisourceBergen Specialty Group (ABSG), a wholly-owned subsidiary of AmerisourceBergen Corporation (ABC), pled guilty in September 2017 to illegally distributing misbranded drugs.

The criminal charges stemmed from ABSG’s behavior between 2001 and 2014. Two of its subsidiaries, Medical Initiatives Inc. (MII) and Oncology Supplies Company, were accused of selling adulterated products. It was revealed that MII was preparing prefilled syringes of oncology care drugs by removing FDA-approved drug product from the glass vials that contained excess drug and repackaging it into plastic syringes that were sold separately. In addition, MII suspected of preparing these plastic syringes in an unclean environment, creating what MII employees noted as particulate matter in the drug product. The exact chemical nature of the foreign matter was not identified in the DOJ announcement.

The investigation also revealed that, in preparation of “single use” vials, MII technicians breached the vials multiple times, thereby increasing the risk of contamination. To avoid detection, ABSG did not register MII as a repackager or manufacturer with the FDA, as they were required to do. ABSG claimed that MII was merely a pharmacy, dispensing drugs with prescriptions only.

At the time of the guilty plea, the total payout to the Department of Justice (DOJ) was thought to be $260 million. But, in a recent filing with the United States Securities and Exchange Commission (SEC), ABC revealed that an additional $625 million will be paid to the government to settle civil allegations brought under the False Claims Act (FCA). The final terms of the agreement are being negotiated and the settlement has not yet been officially announced. The company is required to announce how much money it put in reserve for the settlement — first estimated to be $575 million, and now $625 million.

As part of its agreement with the DOJ, ABSG signed a compliance and ethics agreement promising to increase oversight and accountability of the individuals involved.

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