Chesco pharma giant fined $260M in scheme that put cancer patients at risk

One of the largest distributors of pharmaceuticals in the United States, the Valley Forge-headquartered AmerisourceBergen Corp., will pay $260 million in penalties after pleading guilty in a subsidiary's scheme that put the health of thousands of cancer patients at risk.

AmerisourceBergen Specialty Group operated divisions in Alabama — Medical Initiatives Inc. and Oncology Supply Co. — that were not registered with the Food and Drug Administration.

Between 2001 and 2014, the Alabama divisions illegally repackaged millions of syringes that had been prefilled with medicines commonly prescribed to reduce the side effects of chemotherapy.

The drugs included Procrit, Aloxi, Anzemet, granisetron, Kytril, and Neupogen and were distributed to patients, doctors, and oncology centers nationwide. Some of those medicines can sell for up to $800 a dose if they're not covered by insurance.

Prefilled syringes often contain a tiny bit more medicine than is listed on the label, called "overfill."

To squeeze out 10 percent more profits, a scheme was hatched at Medical Initiatives to take the originally packed glass vials, empty them, and pool the medicine into larger containers, and then repackage the drugs without the overfill into plastic syringes, according to court papers.

The process exposed the previously sterile drugs to contamination. In some cases, the repackaged medicine contained "floaters," unknown particulate matter, or tested positive for bacteria, according to court papers.

"Injectable drugs prescribed for patients — especially vulnerable cancer patients — must be pure, sterile, and produced in a FDA-compliant facility that is within the supply chain that the FDA oversees," said Mark S. McCormack of the agency's criminal investigations office. "We will continue to pursue and bring to justice those manufacturers who would violate the public's trust and endanger their health by attempting to avoid FDA's oversight authority."

According to AmerisourceBergen, the government never alleged that any patients were harmed by syringes filled by Medical Initiatives.

In addition, the Medical Initiatives operation allegedly dispensed the medicines to individuals in excess of safe dosing or without valid prescriptions. AmerisourceBergen voluntarily closed Medical Initiatives in 2014 as federal agents conducted the investigation.

According to a statement Wednesday released by the U.S. Attorney's Office for the Eastern District of New York, where the case was prosecuted, the repackaging scheme was approved by the highest-level executives at AmerisourceBergen.

Two senior executives resigned this year from AmerisourceBergen. Executive vice president of retail operations, David W. Neu, announced his retirement in April. James Frary, previously an executive vice president of the company's specialty group, resigned in June. A company spokesman said the departures were not related to the scandal.

In August, AmerisourceBergen subsidiary US Bioservices agreed to pay $13.4 million to resolve U.S. government kickback claims.