The federal anti-kickback statute prevents pharmaceutical companies from providing financial coverage of Medicare copay payments that would encourage patients to purchase a company’s medication.
Amgen and Astellas’ U.S. branch have agreed to pay $124.75 million to resolve allegations that they each violated the False Claims Act by illegally paying the Medicare copays for their own products, the government announced late Thursday.
The companies, according to the government, used non-profit foundations that were “purportedly independent” as conduits for the payments, the government said. The federal anti-kickback statute prevents pharmaceutical companies from providing financial coverage of Medicare copay payments that would encourage patients to purchase a company’s medication.
The government said that Astellas funneled funds to two foundations to provide copay assistance for Xtandi, an androgen receptor inhibitor (ARI) used to treat certain prostate cancer. Medicare patients taking Xtandi received nearly all of the copay assistance from the two foundations, the government said. Additionally, the government said that Astellas promoted the existence of the copay assistance funds to tout the advantage of Xtandi over competing drugs in an effort to persuade medical providers to prescribe Xtandi. Astellas has agreed to pay $100 million to resolve the government’s allegations, the government said.
Amgen has agreed to pay $24.75 million to settle claims against its using copay funds to support copays for the secondary hyperparathyroidism drug Sensipar and the multiple myeloma drug Kyprolis. By enabling the fund to cover the copays of Medicare beneficiaries, Amgen caused claims to be submitted to Medicare and generated revenue for itself, the government said.
U.S. Attorney Andrew Lelling said Astellas and Amgen conspired with two foundations to create copay funds that “functioned almost exclusively to benefit patients taking Astellas and Amgen drugs.”
“As a result, the companies’ payments to the foundations were not ‘donations,’ but rather were kickbacks that undermined the structure of the Medicare program and illegally subsidized the high costs of the companies’ drugs at the expense of American taxpayers,” Lelling said in a statement.
The government has been cracking down on the use of nonprofit organizations to support Medicare payments. Earlier this month, Jazz Pharmaceuticals, Lundbeck and Alexion Pharmaceuticals have agreed to pay fines totaling $122.6 million to the federal government to resolve kickback allegations. In December, Actellion Pharmaceuticals, a division of Johnson & Johnson, paid the government $360 million to settle claims it illegally used a foundation to pay copay payments for some Medicare patients who were taking the company’s pulmonary arterial hypertension drugs. Two years ago Celgene was accused of donating millions to charities that help patients afford high-priced drugs for cancer as part of a scheme to turn a profit of billions of dollars.
Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division said when pharmaceutical companies use foundations to subsidize the copay of Medicare prescriptions, it “violates the law and undercuts a key safeguard against rising drug costs.” Enacting stiff penalties against the companies makes it clear that the government will hold violators accountable, Hunt said.
Amgen and Astellas each entered five-year corporate integrity agreements with the Office of the Inspector General as part of their respective settlements. The agreements require the companies to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs to which they donate. In addition, the companies agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and board members, the government said.
