The U.S. Department of Justice announced on December 6, 2018 that Actelion Pharmaceuticals US, Inc. (“Actelion”) has agreed to pay $360 million to resolve claims that it illegally used a nonprofit foundation as a conduit to pay the copays of thousands of Medicare patients taking Actelion’s pulmonary arterial hypertension drugs, in violation of the False Claims Act.
Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying, directly or indirectly, any remuneration (which includes money or any other thing of value) to induce Medicare patients to purchase its drugs. This prohibition includes the payment of patients’ copay obligations.
When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (“copays”). The U.S. Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The copay obligations can be substantial for expensive medications.
It was alleged by the federal government that Actelion used the foundation as an illegal conduit to pay the copay obligations of thousands of Medicare patients taking Actelion’s pulmonary arterial hypertension drugs, as an inducement for those patients to purchase its drugs because Actelion knew that the prices it set for those drugs could otherwise pose a barrier to those purchases.
The federal government claimed that from 2014 to 2015, Actelion made donations to the foundation, which, in turn, used those donations to pay copays of patients prescribed Actelion’s pulmonary arterial hypertension drugs. The federal government alleged that Actelion routinely obtained data from the foundation detailing how much the foundation had spent for patients on each such drug and then used this information to decide how much to donate to the foundation and to confirm that its contributions were sufficient to cover the copays of only patients taking its pulmonary arterial hypertension drugs. The foundation reportedly warned Actelion against receiving such data.
The federal government further alleged that Actelion had a policy of not permitting Medicare patients to participate in its free drug program, which was open to other financially needy patients, even if those Medicare patients could not afford their copays for its pulmonary arterial hypertension drugs. The federal government claimed that Actelion referred such Medicare patients to the foundation, which allowed the patients copays to be paid and resulted in claims to Medicare for the remaining cost, in order to generate revenue from Medicare and induce purchases of its pulmonary arterial hypertension drugs.
Actelion was acquired by Johnson & Johnson on June 16, 2017.
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