J&J's Actelion pays out $360M to resolve kickback claims
- Actelion Pharmaceuticals, now a subsidiary of Johnson & Johnson, has paid $360 million to resolve claims it donated to a charity called the Caring Voice Coalition to circumvent the Anti-Kickback Statute and pay thousands of Medicare copays so patients would use the company's pulmonary arterial hypertension drugs.
- Under the Anti-Kickback Statute, companies cannot pay to persuade Medicare patients to buy specific drugs — this includes covering co-pays, whether directly or indirectly. Department of Justice officials also highlighted simultaneous price hikes the company took on those drugs.
- "Pharmaceutical companies cannot increase drug prices while engaging in conduct designed to defeat mechanisms put in place to check such prices and then expect Medicare to pay for the ballooning costs," Assistant Attorney General Jody Hunt of the DOJ’s Civil Division said in a Dec. 6 statement.
One of the drivers behind the inclusion of copays in Medicare was to curb healthcare costs and check price rises from pharma companies.
In a number of recent cases, pharma companies allegedly donated to copay charities in an effort to counterbalance this financial disincentive. Those donations, as the government's argument goes, help charities cover patient copays, effectively ensuring the drugs are used and Medicare is billed for pricey therapies.
But, as this case shows, the federal government has cracked down on the practice, hunting for evidence pharma company donations are linking donations to specific drugs.
In this case, Actelion made donations to the foundation between 2014 and 2015. The DOJ claims the amounts were based on data from the charity that detailed how much had been spent for each PAH drug. This ensured contributions covered the copays of the patients taking Actelion's drugs, prosecutors alleged.
The company's PAH drugs include Tracleer (bosentan), Ventavis (iloprost), Veletri (epoprostenol), and Opsumit (macitentan). J&J bought Actelion last year for $30 billion.
U.S. Attorney Andrew E. Lelling for the District of Massachusetts said the pharma "effectively set up a proprietary fund to cover the co-pays of just its own drugs," thereby undermining Medicare's copay structure.
In parallel, prosecutors said, Actelion did not allow Medicare patients to participate in its free drug program even when patients could not afford their copays. Instead, the pharma directed them to the foundation.
From January 2014 to December 2015, the time covered by the settlement, Actelion raised Tracleer's price by almost 30 times the rate of overall inflation in the U.S.
Actelion's not the only one. A year ago, United Therapeutics agreed to settle with the government for $210 million, again over making payments to cover Medicare copays for PAH drugs.
Pfizer has also been caught up in government scrutiny. In May 2018, the government claimed Pfizer used a third party pharmacy to transfer patients to a foundation, which then paid copays for a few of the big pharma's drugs.
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