The Justice Department sued Regeneron Pharmaceuticals, Inc. on Wednesday for making kickback payments for macular degeneration drug Eylea. The company is accused of “funneling tens of millions of dollars through a co-pay foundation, the Chronic Disease Fund (CDF),” and liberating Medicare patients from paying co-pays for the drug. This false claims case is being held in the Massachusetts District before Chief Judge F. Dennis Saylor, IV.
According to Reuters, the arrangement “helped Regeneron boost sales for the drug, which typically costs over $10,000 per year,” Between 2013 and 2014 the company allegedly $1.9 billion off of Eylea. Because of an anti-kickback statute, it is illegal for pharmaceutical companies like Regeneron “to subsidize the price of a drug reimbursed by Medicare,” however, they are allowed to donate to independent non-profit co-payment assistance organizations.
Before Eylea’s production began, Regeneron decided to price the drug at $1,850 per injection. This number was chosen, according to the complaint, because the company “knew that it could eliminate any financial burden that the higher price would impose on Medicare patients and their physicians simply by paying more to a foundation that would cover the proportionately higher Medicare co-pays for Eylea.” Regeneron’s senior management is accused of willingly allowing these illegal subsidies.
In October 2019, the CDF, now known as Good Days, also “agreed to pay $2 million to resolve allegations it conspired with five other companies including Novartis AG to enable them to pay kickbacks to Medicare patients using their drugs,” as noted by Reuters.
The Justice Department seeks an award of treble damages as a result of Regeneron’s allegedly false claims.
