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Court approves Amgen's $762 million payment in drug case

By Jessica Dye

NEW YORK (Reuters) - A federal judge on Wednesday approved a $762 million payment from Amgen Inc, the final step to resolve nearly a dozen criminal and civil cases stemming from the sale of its once-blockbuster anemia drug Aranesp and several others.

Prosecutors previously said in Brooklyn federal court on Tuesday the company had agreed to pay $612 million in a civil settlement, a $14 million criminal forfeiture payment, and a $136 million criminal fine. It is the single largest criminal and civil fraud settlement involving a biotechnology company in U.S. history, according to the U.S. attorney's office in Brooklyn.

Amgen pleaded guilty on Tuesday to one misdemeanor criminal count that it promoted Aranesp for higher, less frequent doses than approved in the drug's label by federal regulators. The company was also accused of marketing the drug to treat anemia caused by cancer, for which it was not approved, rather than to combat anemia as a side effect of chemotherapy treatments.

Amgen recorded a $780 million charge in the third quarter of 2011 to resolve civil and criminal litigation. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Amgen said it had set aside $806 million related to the proposed settlement of charges arising out of the federal civil and criminal investigations.

U.S. District Judge Sterling Johnson accepted the company's plea on Wednesday and approved its plea agreement with the government. The agreement includes a call for Amgen to abide by a five-year corporate integrity agreement, which imposes new compliance, transparency and accountability measures on the company's top executives and directors.

The agreement resolves a more than five-year investigation by the U.S. attorney's office in Brooklyn, as well as a related investigation by federal prosecutors in Washington state, according to court papers.

"Instead of working to extend and enhance human lives, Amgen illegally pursued corporate profits while jeopardizing the safety of vulnerable consumers suffering from disease," acting U.S. attorney Marshall Miller of the Eastern District of New York said in a statement.

Details of the $612 million civil portion of the settlement were also unsealed Wednesday, encompassing a wider scope of allegations than the criminal case. The civil settlement resolves 10 whistleblower lawsuits from Brooklyn, Massachusetts and Washington federal courts, prosecutors said.

The civil settlement covers allegations that Amgen market Aranesp and two other drugs, Enbrel and Neulasta, for uses and doses that had not been approved. The company was also accused of offering illegal kickbacks to try to persuade health-care providers to prescribe their drugs, and engaged in false price reporting practices, federal prosecutors said.

Other Amgen drugs named in the civil suits include Epogen, Neupogen and Sensipar, according to court papers.

"The government raised important concerns in the criminal prosecution," Amgen chief compliance officer Cynthia Patton said in a statement. "Amgen acknowledges that mistakes were made, and we did not live up to our standards."

Amgen shares were down 53 cents to $88.76 in midafternoon trading.

(Reporting by Jessica Dye; Editing by Neil Stempleman)

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