Pharmaceutical Companies Agree to Pay a Total of Over $122 Million to Resolve Allegations They Paid Kickbacks

Pharmaceutical Companies Agree to Pay a Total of Over $122 Million to Resolve Allegations They Paid Kickbacks

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.

Concepts Keywords
Active Ingredient CMD
Assistant Attorney General Severe chronic pain
Boston Law enforcement partners
Central Nervous System Healthcare benefits
Chorea Health
Chronic Pain Articles
CIA Small narcolepsy
Congress Xyrem narcolepsy
Copay Pharmaceutical industry
Copayment Sodium oxybate
Deductible Lundbeck
Depressant Copayment
False Claims Act Eculizumab
FBIs Medicare
Fraud Alexion Pharmaceuticals
Healthcare Orphan drugs
Healthcare Fraud Specialty drugs
Inspector General
Kickback
Kickback Schemes
Kickbacks
Lundbeck
Massachusetts
Medicare
Narcolepsy
Pain Medication
Paroxysmal Nocturnal Hemoglobinuria
Pharmaceutical
Pharmaceutical Companies
Pharmaceutical Company
PNH
Prescription Drug
Prohibition
Risk Assessment
Sean Smith
Soliris
Special Agent
The Office
Washington

Semantics

Type Source Name
disease DOID paroxysmal nocturnal hemoglobinuria
disease MESH atypical hemolytic uremic syndrome
disease MESH diagnoses
drug DRUGBANK Tacrine
gene UNIPROT APCDD1
disease MESH paroxysmal nocturnal hemoglobinuria
gene UNIPROT GALNT3
disease DOID HHS
disease DOID HHS
disease DOID chorea
gene UNIPROT FHL5
gene UNIPROT MAP6
gene UNIPROT ASF1A
gene UNIPROT NCOA5
gene UNIPROT BAD
gene UNIPROT NR4A2
gene UNIPROT ALG3
gene UNIPROT SET
drug DRUGBANK Nonoxynol-9
disease MESH narcolepsy
disease DOID narcolepsy
drug DRUGBANK gamma-Hydroxybutyric acid
disease MESH chronic pain
disease MESH chorea
gene UNIPROT POTEM
gene UNIPROT ACTG1
gene UNIPROT SERPINA3
gene UNIPROT ACTBL2
gene UNIPROT ACTG2
gene UNIPROT ACOT7
gene UNIPROT HSPG2

Original Article

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