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United States v. Aegerion Pharms.

United States District Court for the District of Massachusetts

November 20, 2017, Decided; November 20, 2017, Filed

CRIMINAL ACTION NO. 17-10288-WGY

Opinion

 [*218]  MEMORANDUM & ORDER

Let's see if I've got this straight.1

Aegerion Pharmaceuticals, Inc. ("Aegerion") developed an effective medicine, called Juxtapid, to treat high cholesterol in people with a rare genetic disease. The treatment did not come cheap. "At market launch in January 2013, Juxtapid cost roughly $295,000 per patient per year. The annual cost of Juxtapid later increased to over $330,000 per patient per year." Information, ¶ 19.

Thereafter Aegerion engaged in a series of unfair and deceptive acts, including outright fraud, which pervaded corporate management, all designed to increase the use of Juxtapid in circumstances where such treatment was not medically indicated. Aegerion wrongfully received a great deal of money from this corporate criminal conduct. Still [**2]  more important, it appears that Aegerion knowingly induced the prescription of Juxtapid to many patients for which it would do no good, thus crowding out more promising therapies. Information, ¶ 37-39. Indeed, "[n]umerous HeFH, statin-intolerant, and diabetic patients, including elderly and pediatric patients suffered adverse events, including liver toxicity and gastrointestinal distress, and had to discontinue use of Juxtapid." Information, ¶ 39.

Facing two misdemeanor counts of introducing misbranded drugs into interstate commerce, Aegerion now seeks to plead guilty,2 pursuant to Fed. R. Crim. P. 11(c)(1)(C) (the "'C' plea"). ] Under a "C" plea, the judge's choice at sentencing is limited to imposing the sentence agreed between the government and the offender or rejecting the plea altogether. Id. at 11(c)(3)(A). The judge, of course, is forbidden from engaging in the plea bargaining itself. Id. at 11(c)(1). These two requirements conflict whenever a court is inclined to reject a "C" plea since an unexplained rejection smacks of personal fiat and any explanation sounds like court interference in the parties' good faith bargaining. There is no easy course. Seeking to avoid this difficulty, this Court in United States v. Orthofix, Inc., 956 F.Supp.2d 316 (D. Mass. 2013), thoroughly considered the [**3]  issues and explained its conclusion that the "C" plea has no place, save in the rarest circumstances, in the context of corporate criminal pleas. Id. at 331-37.

As this case illustrates, the issues presented by the "C" plea in the corporate context are more disquieting than I had originally thought.

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280 F. Supp. 3d 217 *; 2017 U.S. Dist. LEXIS 191677 **

UNITED STATES OF AMERICA, v. AEGERION PHARMACEUTICALS, INC., Defendant.

Subsequent History: Magistrate's recommendation at United States v. Aegerion Pharms., 2019 U.S. Dist. LEXIS 114131 (D. Mass., July 9, 2019)

CORE TERMS

sentence, cooperation, bargaining, proffered, pharmaceutical, settlement, disparity, patient, negotiations, fine

Criminal Law & Procedure, Sentencing, Plea Agreements, Preliminary Proceedings, Entry of Pleas, Role of Court, Types of Pleas