BCBS of N.J. Brings RICO Claim Against Regeneron

On Monday a case was filed in the District of Massachusetts by Horizon Blue Cross Blue Shield of New Jersey against Regeneron Pharmaceuticals. The case brings claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) through the promotion and reimbursement of Eylea macular degeneration treatment.

Eylea, per the complaint, is a prescription injectable drug that provides treatment for wet age-related macular degeneration, a disease that can render patients partially or totally blind.

The complaint said that the total wholesale price of Eylea is $1850 per treatment, more expensive than its competitor Avastin, which costs $55.00 per treatment. Regeneron allegedly transferred funds to the Chronic Disease Fund, which the plaintiffs describe as a “so-called ‘charity.'” The organization purportedly uses the funds to offset the patient out-of-pocket costs associated with Eylea. This results in patients having lower out of pocket costs for Eylea than they would with the competitor, even though the costs that are reimbursed by both government and private insurance companies is higher, causing an incentive for patients and providers to chose Eylea over the cheaper alternative. The plaintiffs argue that this payment is a kickback which is illegal under RICO.

BCBS is suing for violation of civil RICO, violation of state fair trade acts, fraud, fraudulent concealment, and tortious interference with contractual relationships. Plaintiffs are represented by Tucker Dyer & O’Connell LLP, Lowey Dannenberg P.C. and Getnick & Getnick LLP.