Three Drug Companies to Pay $122.6 Million to Resolve Kickback Allegations--2nd Update

By Michael Dabaie

The Justice Department said on Thursday that three pharmaceutical companies -- Jazz Pharmaceuticals PLC, Lundbeck LLC and Alexion Pharmaceuticals Inc. -- --agreed to pay a total of $122.6 million to resolve allegations they paid drug copays for their pharmaceuticals through copay-assistance foundations.

The Justice Department alleged the companies violated the False Claims Act by illegally paying copays required by two federal health programs for the companies' own products through purportedly independent foundations that the companies used as conduits. The Justice Department also said the claims in the settlement are allegations and there has been no determination of liability.

The federal programs were Medicare and the Civilian Health and Medical Program, or ChampVA, from the Department of Veterans Affairs.

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 Justice Department 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 Justice Department said.

"We reached an agreement that will allow us to put this matter behind us and continue our focus on providing innovative medications for people living with brain disorders. The agreement doesn't include any admission that we violated any law" said, Lundbeck, which agreed to pay $52.6 million to resolve the allegations.

Alexion said it would pay about $13 million under the terms of the agreement. "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.

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 a $58.2 million charge related to this matter.

Jazz also said it has maintained -- and remains committed to -- a comprehensive compliance program for legal and regulatory requirements. "This includes requirements relating to our continued support of independent charity patient assistance programs, which provide financial assistance to patients who would otherwise be unable to access life-changing medicines," the company said in an emailed statement.

The company added: "The settlement agreement is not an admission by Jazz of liability or the facts alleged by the DOJ, but a settlement of the government's claims."

Jazz and Lundbeck each entered five-year corporate integrity agreements as part of the settlements. 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 Justice Department 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 Justice Department's Civil Division.

(END) Dow Jones Newswires

April 04, 2019 16:49 ET (20:49 GMT)

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