Amgen Inc. is a pharmaceutical company based out of California. In 2009, there were 15 states that filed lawsuits against the company for accusations of participating in Medicaid kickback schemes. Amgen was out to push the sale of their new drug Aranesp, which was developed to treat amnesia associated with chronic renal failure. Despite numerous reports of complaints with the new drug, Amgen continued to sweeten the deal for long-term care pharmacy providers to switch Medicare and Medicaid patients to this medicine in exchange for performance-based rebates and lavish vacations. The following report will summarize the ethical issues surrounding the case along. The Amgen code of conduct states that the standard is to “uphold ethical and legal standards vigorously”. The company violated both ethical and legal standards.
Federal law requires after-market reporting on all new drugs under the FDA drug compliance program. The integrity of the company was jeopardized when they chose to withhold information received regarding adverse effects of the drug. Shawn O’Brien was a senior project manager who was hired to improve the company compliance process with FDA reporting. He became aware of the lack of reporting complaints and took this information to top management and was told to be quite about his findings. When he did not comply, he was later fired. He sued the company under the “whistleblower-protection” act of Sarbanes Oxley. Whistleblowing is the act of an employee exposing a company’s misconduct, illegal activity, or threats to public interest. The SOX act specifically grants protection to whistleblowers of publicly held companies when there are federal offenses including fraud to shareholders. A kickback is when payment or something of value is given with the intention of influencing the decision of that person, or company. In this case, the kickbacks given to doctors and long-term care facilities were illegal. Amgen was giving kickbacks in the...
References: Mintz, Steven. Ethical Obligations and Decision Making in Accounting: Text and Cases. 2nd Edition. McGraw-Hill Learning Solutions, 2011.
Drug Compliance Programs. Retrieved from: http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation on 3/16/14
Amgen to Pay U.S. $24.9 Million to Resolve False Claims Act Allegations. Retrieved from http://www.justice.gov on 3/16/14
Pollack, Andrew. Amgen is Accused of Illegal Kickbacks. Published 10/30/09. Retrieved from http://www.nytimes.com on 3/16/14
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