Consumer Fraud

Actelion Pays $360 Million To Resolve Fraudulent Medicare Kickback Case

Pills Stethascope on Money 435x289 Actelion Pays $360 Million To Resolve Fraudulent Medicare Kickback CaseActelion Pharmaceuticals has agreed to pay $360 million to resolve claims that it used a charity to pay illegal kickbacks to Medicare patients to boost sales of its pulmonary arterial hypertension drugs.

In a Dec. 7 announcement, the U.S. Department of Justice said that Actelion, which became a unit of Johnson & Johnson last year, arranged to pay the Medicare co-pay obligations for thousands of patients taking its pulmonary arterial hypertension drugs Tracleer, Ventavis, Veletri, and Opsumit.

Medicare requires beneficiaries to partially pay for some prescription drugs as a way to keep prescription drug costs in check, including the prices that drug companies can demand for their drugs. The U.S. Justice Department said that Actelion knew the prices it set for its pulmonary arterial hypertension drugs could be prohibitively expensive to patients, so it organized an illegal kickback scheme to circumvent Medicare requirements.

Federal prosecutors said Actelion made donations to a charity, which in turn used the donations to pay the copays of patients prescribed the costly drugs.

The federal Anti-Kickback Statute prohibits drug manufacturers from offering or paying any remuneration in any form to induce Medicare patients to purchase a particular drug. Because Actelion allegedly engaged in such a kickback scheme, it also caused the submission of false claims to Medicare, federal prosecutors said.

The U.S. also alleged that Actelion routinely obtained data from the charity, identified by U.S. Attorney Andrew Lelling as CVC, that specified how much the charity had spent for patients on each of its drugs. Actelion then used that information to decide how much to donate to the charity and to confirm that its contributions were enough to cover the copays of only patients taking the Actelion drugs. Actelion did this despite CVC’s protests, federal prosecutors said.

“Using data from CVC that it knew it should not have, Actelion effectively set up a proprietary fund to cover the co-pays of just its own drugs,” U.S. Attorney Lelling said in a statement. “Such conduct not only violates the anti-kickback statute, it also undermines the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices.”

Underscoring Actelion’s greed, U.S. Attorney Lelling said that in 2014 and 2015 – the period covered by the $360 million settlement – Actelion raised the price of its main PAH drug, Tracleer, by nearly 30 times the rate of overall inflation in the United States.