AmerisourceBergen Corporation (ABC), one of the nation’s largest wholesale drug companies, and some of its subsidiaries entered into a settlement with the United States in which it agreed to pay $625 million to resolve civil liability under the False Claims Act. The claims against ABC arise from its repackaging and distributing of Pre-Filled Syringes (PFS) that were not approved for sale or use by the U.S. Food and Drug Administration (FDA).

The term “overfill” is a frequently used term in the pharmaceutical industry generally meaning the amount of extra drug above and beyond the labeled dose that is contained in an FDA-approved vial of drug. The overfill is not listed on the FDA-approved drug label. The reason manufacturers put overfill in each vial of drug is to ensure that the health care provider administering the drug will be able to extract the full labeled dose from the vial to give to the patient.

ABC admitted its subsidiaries operated a program that created, packed and shipped millions of PFS to oncology practices after the drug product was removed from the original glass vials and multiple vials of the product were pooled in untested plastic containers. Then the drug, including the overfill, was extracted and repackaged into syringes.

By harvesting the overfill, ABC was able to create more doses than it bought from the original vial manufacturers and avoid opening some of the vials. ABC retained the unopened vials and sold them to other customers and to its subsidiary for resale. These syringes were sold throughout the United States.The profit from the PFS Program was between $2.3 and $14.4 million annually for a total profit of at least $99.6 million.

ABC’s scheme enabled it to bill multiple health care providers for the same vial of drug, causing some of those providers to bill the Federal Health Care Programs for the same vial more than once. The scheme also enabled ABC to increase its market share by offering various product discounts, which it leveraged to obtain new customers and to keep existing customers who purchased its entire portfolio of oncology drugs.

This civil settlement brings to $885 million the total penalties that ABC has paid to resolve liability resulting from the PFS Program.

The settlement also resolves allegations that ABC gave kickbacks to physicians to induce them to purchase drugs through the PFS program. The alleged kickbacks were in the form of general pharmacy credits provided to the customer.

AmerisourceBergen said in a statement that the settlement reflects its acknowledgment that some practices at the now-closed Medical Initiatives unit “were not consistent with AmerisourceBergen’s approach to corporate compliance.”

Four whistleblowers including Michael Mullen, the former chief operating officer of a subsidiary of AmerisourceBergen Corporation, played an instrumental role in the civil settlement. His amended qui tam complaint filed in the United States District Court for the Eastern District of New York, details AmerisourceBergen’s overfill laundering scheme and the executives who knew about the oncology business model and regulatory issues, including the former and current AmerisourceBergen CEOs.

The whistleblowers will share $99 million from the settlement.