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Drug Companies Agree to Pay $122M to Settle Kickback Allegations

The U.S. Department of Justice has reached a settlement of $122.6 million with Jazz Pharma, Alexion and Lundbeck over alleged Medicare violations.

According to the Justice Department, the drug companies violated a statute prohibiting pharmaceutical companies from offering remuneration that would encourage patients to purchase their medications from the company.

U.S. Attorney Andrew Lelling said the “misconduct is widespread” and that enforcement will continue until drug companies stop violating anti-kickback laws.

The companies, according to the Department of Justice, violated the Federal False Claims Act when they paid kickbacks to patients of the Medicare and Civilian Health and Medical Program (ChampVA) through charitable organizations that subsidized the co-pays.

As per the settlement agreement, Jazz Pharma will pay $57 million, Alexion will pay $13 million and Lundbeck will pay $52.6 million.

Jazz Pharma, which sells the chronic pain drug Prialt and the narcolepsy drug Xyrem, worked with a foundation to create a company-sponsored fund that would cover copays for their drugs offered through government programs. Meanwhile, the company raised the price of Xyrem to more than 24 times the rate of inflation in the U.S.

From 2011 through 2016, Lundbeck raised the price of Xenazine at more than 22 times the rate of inflation in the U.S.

Both Lundbeck and Jazz Pharma entered into five-year corporate integrity agreements that would require them to implement monitoring and controls to promote independence from payment assistance programs.

Alexion markets the drug Soliris, which has a high price of $500,000 per year. The company established a fund to support patients with copays, but they required the foundation to stop offering co-pay support when patients switched from Soliris to another drug.

The settlements come as the pharmaceutical industry is facing greater scrutiny over rising drug prices. Over the last several years, Jazz Pharma, Lundbeck and Alexion have all raised the prices of the drugs covered by public plans.

About The Author
Jacob Maslow The senior editor of Legal Scoops, Jacob Maslow, has founded several online newspapers including Daily Forex Report and Conservative Free Press. He also works as an Online Marketing Consultant providing web marketing services.