DOJ: Three Pharma Cos to Pay $122.6 Million to Resolve False Claims Act Allegations

By Michael Dabaie

The U.S. Justice Department said Thursday that three pharmaceutical companies--Jazz Pharmaceuticals PLC (JAZZ), Lundbeck LLC and Alexion Pharmaceuticals Inc. (ALXN)--agreed to pay a total of $122.6 million to resolve allegations involving copay assistance foundations.

The Justice Department alleged the companies violated the False Claims Act by illegally paying the Medicare or Civilian Health and Medical Program copays for their own products through purportedly independent foundations that the companies used as conduits.

When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment and under ChampVA, patients may be required to pay a copay for medications, the DOJ said. The Anti-Kickback Statute prohibits a pharmaceutical company from offering or paying, directly or indirectly, any remuneration--which includes money or any other thing of value--to induce Medicare or ChampVA patients to purchase the company's drugs, which extends to the payment of patients' copay obligations, the DOJ said.

Lundbeck officials didn't immediately respond to a request for comment.

"Alexion announced that it has finalized its settlement with the U.S. Department of Justice to resolve claims related to the company's support of independent charity patient assistance programs between 2010 and 2016," the pharmaceutical company said. Alexion said it will pay about $13 million under the terms of the agreement.

Jazz said in a Securities and Exchange Commission filing it will pay the U.S. government $57.0 million, plus interest. Jazz said during 2018 it recorded $58.2 million related to this matter.

Jazz said it received DOJ subpoenas in 2016 and 2017 for documents related to Jazz's support of charitable organizations that provide financial assistance to Medicare patients.

Jazz and Lundbeck each entered five-year corporate integrity agreements. The agreements require the companies to implement measures, controls and monitoring to promote independence from any patient assistance programs to which they donate. In addition, the companies agreed to implement risk-assessment programs and obtain compliance-related certifications from company executives and board members.

Alexion wasn't required to enter into corporate integrity agreement because it made organizational changes, the DOJ said, including hiring a new eight-member executive leadership team and changing half of the members of its board.

"These enforcement actions make clear that the government will hold accountable drug companies that directly or indirectly pay illegal kickbacks," said Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division.

Write to Michael Dabaie at michael.dabaie@wsj.com

(END) Dow Jones Newswires

April 04, 2019 11:43 ET (15:43 GMT)

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