Publication date: Apr 08, 2019
Washington, DC – The Department of Justice Thursday announced that three pharmaceutical companies – Jazz Pharmaceuticals plc (Jazz), Lundbeck LLC (Lundbeck), and Alexion Pharmaceuticals Inc. (Alexion) – have agreed to pay a total of $122. 6 million to resolve allegations that they each violated the False Claims Act by illegally paying the Medicare or Civilian Health and Medical Program (ChampVA) copays for their own products, through purportedly independent foundations that the companies used as mere conduits.
The government alleged that, in 2011, Jazz asked a foundation to create a fund that would pay the copays of Xyrem Medicare patients and that the foundation agreed to establish a -Narcolepsy Fund,” to which Jazz became the sole donor.
The government further alleged that, in conjunction with establishing this fund, Jazz made Medicare patients ineligible for Jazz’s free drug program and instead referred Xyrem Medicare patients to the foundation, enabling Jazz to generate revenue from Medicare and induce purchases of the drug, rather than continuing to provide these patients with free drugs.
The government alleged that Jazz asked the same foundation to create a fund ostensibly to assist patients with the co-pays of any severe chronic pain drugs, but which, in practice, almost exclusively paid Prialt Medicare copays.
Shortly after creating the fund, the foundation allegedly told Jazz that when severe chronic pain patients seeking assistance with other drugs contacted the foundation, it would refer them elsewhere.
The government further alleged that, in June 2014, after the foundation determined that its Huntington’s Disease fund would no longer pay the copays of patients taking Xenazine for non-Huntington’s disease uses, Lundbeck agreed to repurpose some of its prior donations to the Huntington’s Disease fund to a -general fund” at the foundation for the purpose of paying these patients’ Xenazine copays, and made subsequent -unrestricted” payments to the foundation with the understanding that the foundation would use these payments to pay Xenazine copays for these same patients.
The government also alleged that, at the time it was engaged in the foregoing conduct, Lundbeck had a policy of not permitting Medicare or ChampVA patients to participate in its free drug program for Xenazine, which was open to other financially needy patients, even if those Medicare or ChampVA patients could not afford their copays for Xenazine.
Instead, in order to generate revenue from Medicare and ChampVA and to induce purchases of Xenazine, Lundbeck allegedly referred financially needy non-Huntington’s Disease Xenazine patients to the foundation, which resulted in claims to Medicare and ChampVA to cover the cost of the drug.
The government alleged that Alexion made donations to a -Complement-Mediated Disease” (CMD) fund at a foundation to pay the Medicare copay obligations of patients taking Soliris and to induce those patients’ purchases of Soliris.
In particular, the government alleged that Alexion approached the foundation in January 2010 to request that it create a fund to provide financial assistance to Soliris patients, including by paying patients’ Soliris Medicare copays and other medical expenses for Soliris patients.
|disease||DOID||paroxysmal nocturnal hemoglobinuria|
|disease||MESH||atypical hemolytic uremic syndrome|
|disease||MESH||paroxysmal nocturnal hemoglobinuria|