At a hearing at the federal courthouse in Brooklyn, New York on Tuesday, ABSG admitted that, between 2001 and 2014, its subsidiary Medical Initiatives Inc. (MII) sold repackaged cancer meds that had been processed in an unclean, unsterile environment.
Some of the repackaged drugs contained “particles or foreign matter” according to the US Department of Justice (DoJ), which said ABSG had deliberately sought to avoid FDA scrutiny of MII’s processing activities by not registering the firm as a re-packager or manufacturer.
“Instead,” the DoJ said “ABSG inaccurately portrayed MII to its customers and to state agencies as a state-regulated pharmacy in the business of dispensing drugs pursuant valid prescriptions and claimed that MII was otherwise in compliance with state pharmacy laws.”
The DoJ added that “By holding MII out as a pharmacy, ABSG unlawfully exploited an exemption to the FDA registration requirement that is reserved for legitimate pharmacies, not for manufacturers or re-packagers.”
The $260m payment ABSG will make is composed of a $208m criminal fine, plus $52m in criminal forfeiture related.
ABSG signalled its intention to plead guilty last month in a US Securities and Exchange Commission (SEC) filing.
The wholesaler said it intended to “plead guilty to a strict liability misdemeanor offense under the Federal Food, Drug and Cosmetic Act in connection with the failure of Medical Initiatives, Inc. to duly register with the United States Food and Drug Administration.”
MII ceased operations in 2014.
In an emailed statement ABSG told us "We believe this settlement is the right approach to resolving the matter with our formerly operating subsidiary, Medical Initiatives, Inc., allowing us to focus on best meeting the needs of customers and patients. Medical Initiatives, Inc. was licensed and passed all inspections by the Alabama Board of Pharmacy, but resolution with the U.S. Attorney’s criminal division stems from a lack of registration with the U.S. FDA. The MII operation was closed voluntarily by the company in early 2014. Although the government’s investigation had commenced a number of years before then, the government never issued any warning letters, corrective action plans and/or seek the closure of MII operations.
"The government’s Information does not allege that any patient was negatively impacted by any syringe filled by MII. Neither the government nor AmerisourceBergen are aware of any adverse events associated with the use of MII’s syringes. In addition, during its investigation, in July, 2012, the government seized thousands of MII’s syringes and tested some number of those. It is our understanding that testing did not reveal any quality concerns with regard to the drug product they tested.
"AmerisourceBergen takes this matter very seriously and has robust controls in place across all of our businesses to ensure that its handling of products fully complies with all requirements and applicable safety and other standards, and that its operations are properly registered with the appropriate government agencies."