A settlement has been reached to resolve False Claims Act allegations against Jazz Pharmaceuticals plc (Jazz), Lundbeck LLC (Lundbeck), and Alexion Pharmaceuticals Inc (Alexion).
The allegations arose from a lawsuit that claimed Jazz, Lundbeck, and Alexion 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 federal anti-kickback statutes prevent pharmaceutical companies from directly or indirectly paying for co-pays for medications covered by Medicare Part B or Part D or ChampVA.
According to the government in 2011, Jazz worked with a foundation to develop a company-supported fund to cover copays for those drugs offered through the government programs. At the same time, Jazz increased the price of Xyrem at over 24 times the rate of overall inflation in the United States, the government said. Jazz, which sells narcolepsy drug Xyrem and chronic pain treatment Prialt, has agreed to pay $57 million to resolve the allegations against the company.
According to the government in 2011 till 2016, Lundbeck raised the price of Xenazine at over 22 times the rate of overall inflation in the United States. Lundbeck, which Xenaxine, a treatment for chorea associated with Huntington’s disease, has agreed to pay the government $52.6 million to settle the claims.
Reportedly, Alexion markets Soliris, which has a list price of about $500,000 per year. Due to the high cost of the medication, the company established a fund to support the patients with co-pays. The Department of Justice said the company remained diligent to notify the foundation to cease co-pay support if a patient switched from Soliris to another medication. Alexion agreed to pay the government $13 million to resolve the allegations against it.
“These settlements demonstrate the FBI’s commitment to safeguard the Medicare program and ensure that patients receive treatment solely based on their medical needs,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “Not only did these companies undermine a program that was set up to assist patients in decreasing the cost of their drugs, but they threatened the financial integrity of the Medicare program to which we all contribute and on which we all depend.”
“Kickback schemes undermine the integrity our nation’s healthcare system, including healthcare benefits administered by the U.S. Department of Veterans Affairs,” said Special Agent-in-Charge Sean Smith, VA Office of Inspector General, Northeast Field Office. “The VA Office of Inspector General, along with our law enforcement partners, will continue to aggressively pursue these investigations and exhaust all efforts to uncover these schemes.”
Jazz and Lundbeck entered five-year corporate integrity agreements as part of the settlement agreements.
