Drug Maker Aegerion Agrees to Plead Guilty and Pay $35 Million to Resolve Criminal Charges and False Claims Act Allegations

BOSTON – The U.S. Attorney’s Office announced today that Aegerion Pharmaceuticals, Inc, a Cambridge, Massachusetts-based subsidiary of Novelion Therapeutics Inc., has agreed to pay over $35 million to resolve criminal and civil charges relating to its marketing of Juxtapid, a drug that is labeled with a warning that it may cause serious liver and stomach problems and that is approved to treat high cholesterol only for patients with a rare genetic disease called homozygous familial hypercholesterolemia (HoFH).

“Aegerion put profits over patient safety and enriched itself at taxpayer expense,” said Acting U.S. Attorney William D. Weinreb.  “Our Office is committed to protecting patient safety and the integrity of federal health care programs, and we will continue to use our criminal and civil authority to ensure that drug companies play by the rules that protect the public, ensure quality of care, and preserve patient privacy.”

“Today’s settlement shows that the government will continue to hold accountable drug companies that violate laws designed to protect the health and safety of patients,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division.  “Aegerion has agreed to plead guilty to breaking the law.  The Justice Department will continue to ensure that taxpayers do not foot the bill when such conduct occurs.”

In a criminal Information filed today, the United States charged that, from December 2012 to December 2015, Aegerion violated the Federal Food, Drug, and Cosmetic Act in connection with its sale and promotion of the drug Juxtapid.  Aegerion management and sales personnel distributed Juxtapid not only for the treatment of HoFH, but also as a treatment for high cholesterol generally, without adequate directions for such use.  Furthermore, even though the FDA had approved Juxtapid subject to a Risk Evaluation Mitigation Strategy (REMS) to ensure that prescribers were informed of the drug’s risks and that Juxtapid was prescribed only for patients with a clinical or laboratory diagnosis consistent with HoFH, the Information alleges that, during the relevant time period, Aegerion failed to give health care providers complete and accurate information about the clinical diagnosis of HoFH, therefore failing to comply with the required elements under the REMS to assure safe use of Juxtapid.  Under the terms of a plea agreement, Aegerion has agreed to plead guilty to these charges and to pay a criminal fine and forfeiture of $7.2 million.

Today’s resolution includes a deferred prosecution agreement to resolve a felony charge that Aegerion conspired to violate the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Under the terms of the deferred prosecution agreement, Aegerion admitted to facts demonstrating that the company conspired with its sales employees, including senior managers, to obtain patients’ personally identifiable health information, without patient authorization, for commercial gain.  Aegerion has agreed to implement enhanced compliance provisions, including periodic certifications to the government concerning its implementation of those provisions.

Under the terms of a civil False Claims Act settlement, Aegerion will pay $28.8 million over three years to resolve allegations that:  Aegerion distributed Juxtapid for patients without a diagnosis of, or consistent with, HoFH; Aegerion employees, including senior managers, made false and misleading statements to doctors that the use of Juxtapid was appropriate in patients with high cholesterol, irrespective of whether such patients had a diagnosis of HoFH and despite counter-indications to a diagnosis of HoFH; Aegerion employees at times altered or falsified statements of medical necessity and prior authorizations that were submitted to federal health care programs; and Aegerion defrayed patients’ copayment obligations for Juxtapid, in violation of the Anti-Kickback Statute, by funneling funds through Patient Services, Inc., an entity that promoted its ability to create a “reimbursement vehicle” for Aegerion from patients who otherwise would have received free drug. 

As part of the resolution, Aegerion has also agreed to enter into a separate civil consent decree with the FDA to resolve civil liability under the FDCA for its distribution of Juxtapid that was misbranded because Aegerion failed to comply with the requirements of the Juxtapid REMS program and because Juxtapid’s labeling lacked adequate directions for all of Juxtapid’s intended uses..  Aegerion also entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the Department of Health and Human Services.  The five-year CIA requires, among other things, that Aegerion implement measures designed to ensure that its promotional activities and any arrangements and interactions with third-party patient assistance programs are compliant with the law.  In addition, the CIA requires reviews by an independent review organization and compliance-related certifications from company executives and Board members. 

“Today’s settlement with Aegerion shows how the government will hold the pharmaceutical industry accountable for violating important FDA and privacy rules that are intended to keep patients safe and ensure the confidentiality of their information,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The FBI will continue to investigate companies like Aegerion that profit from exploiting patients who are searching for treatments to serious medical conditions.”

“Today’s agreement demonstrates that we will not allow pharmaceutical manufacturers to provide the medical community with false and incomplete information about their products, thereby jeopardizing the health and safety of our citizens,” said Phillip Coyne, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General. “Nor will we allow corporations to profit at the expense of patient care and their personal information.”

“Our corporate integrity agreement increases individual accountability for board members and company executives and it requires Aegerion to strengthen controls around promotional activities and other interactions with health care providers,” said Gregory E. Demske, Chief Counsel to the Inspector General for the U.S. Department of Health and Human Services.  “Importantly, the CIA also requires that Aegerion implement controls and monitoring designed to ensure true independence from any charity patient assistance programs to which it donates in the future.”

“We sometimes require companies to put in place certain measures to more closely manage a drug’s risks when we don’t believe a medicine’s benefits would outweigh its side effects without these risk mitigation strategies. This might include requiring prescribers to undergo certain training on a drug’s risks, or having providers take steps to more closely monitor patients,” said FDA Commissioner Scott Gottlieb, M.D. “By failing to follow the safety requirements that Aegerion had agreed to, the company put patients’ lives at risk and didn’t honor the safety commitments they made as a condition of gaining approval for their drug. This is unacceptable. We will continue to pursue those who skirt the law, and flout safety patient and other post-market commitments, using all of the enforcement tools available to us. Post-market safety requirements are a key element of FDA’s public health protections and we will ensure that they are fulfilled.”

“By failing to comply with all requirements of FDA’s approval of Juxtapid, including its Risk Evaluation and Mitigation Strategy, Aegerion subjected patients to unnecessary risk” said Mark S. McCormack, Special Agent in Charge, FDA Office of Criminal Investigations, Metro Washington Field Office. “When a company subverts FDA’s approval conditions, we will pursue and bring them to justice in order to fulfill our mission of protecting the public health.” 

“EBSA is very pleased to have had the opportunity to work collaboratively with our law enforcement partners on this important investigation,” said Susan A. Hensley, Regional Director, U. S. Dept. of Labor, Employee Benefits Security Administration, Boston Regional Office. “I commend the exceptional work performed by our investigators and their law enforcement partners.  This office will continue to vigorously pursue cases where participants and private sector health benefit plans are victimized by unscrupulous and illegal pharmaceutical sales practices.”

The civil settlement resolves a lawsuit filed by Michele Clarke, Tricia Mullins, and Kristi Winger Szudlo, former employees of Aegerion, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals, known as relators, to sue on behalf of the government for false claims and to share in any recovery.  The qui tam suit was filed in the District of Massachusetts and is captioned United States ex rel. Clarke, et al. v. Aegerion Pharmaceuticals, Inc., et al., No. 13-CV-11785 (D. Mass.).  Relators will receive $4.7 million from the proceeds of the federal civil settlement. 

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

This matter was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services’ Office of Inspector General, the Department of Labor’s Employee Benefits Security Administration, and the FDA. This matter was handled by Assistant U.S. Attorneys Kriss Basil, Young Paik, Sara Bloom and Abraham George of Weinreb’s Office and Trial Attorneys Shannon Pedersen and Holly Snow of the Civil Division’s Consumer Protection Branch and Civil Fraud Section, respectively.