By Debbie Cai 
 

Amgen Inc. (AMGN) will pay $24.9 million to settle allegations that it paid kickbacks to certain long-term care pharmacy providers, the Justice Department said.

The biotechnology company develops, manufactures, and sells pharmaceutical products, including products sold under the trade name Aranesp.

The settlement resolves allegations that Amgen paid Omnicare Inc. (OCR), PharMerica Corp. (PMC) and Kindred Healthcare Inc. (KND) for implementing "therapeutic interchange" programs that were designed to switch Medicare and Medicaid beneficiaries from a competitor drug to Aranesp, the DoJ said.

Representatives for Amgen weren't immediately available for comment.

The government alleged that the kickbacks were in the form of performance-based rebates that were tied to market-share or volume thresholds. The government also alleged that, as part of the therapeutic interchange program, Amgen distributed materials to consultant pharmacists and nursing home staff encouraging the use of Aranesp for patients who didn't have anemia associated with chronic renal failure.

The lawsuit was filed in the U.S. District Court for the District of South Carolina under the whistleblower provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the U.S. and share in any recovery.

Amgen has been focusing on its new bone-building drugs to help offset declining sales of its anti-anemia treatments, which have slumped in recent years due to safety concerns and intensifying competition. In February, the company raised its earnings view for 2013, pointing to federal tax settlements that resulted in an adjustment for prior years that will be recorded in the first quarter.

Shares slipped 1.25%, to $109.47 after hours. The stock is up 67% over the past 12 months.

Write to Debbie Cai at debbie.cai@dowjones.com

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