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Amgen, Astellas Pay $125M to Settle DOJ Kickback Allegations

Posted 25 April 2019 | By Zachary Brennan 

Amgen, Astellas Pay $125M to Settle DOJ Kickback Allegations

Two more pharmaceutical companies on Thursday joined a heap of peers in settling allegations made by the Department of Justice that the companies used foundations to pay Medicare copays for their own products.

Amgen and Astellas Pharma agreed to pay $124.75 million total ($100 million for Astellas and $24.75 million for Amgen) after they were accused of using multiple foundations to induce Medicare patients to purchase the company’s drugs.

As far as the details of the schemes, the DOJ notes how in May 2013, Astellas asked two foundations about the creation of copay assistance funds to cover the copays for Medicare patients taking androgen receptor inhibitors (ARIs), but not for other types of prostate cancer drugs.

In July 2013, both foundations opened ARI-only copay funds, and Astellas was the sole donor to both funds. The government found that Medicare patients taking Astellas’ ARI Xtandi (enzalutamide) received nearly all of the copay assistance from the two funds. The government also alleged that Astellas promoted the existence of the ARI funds as an advantage for Xtandi over competing drugs in an effort to persuade medical providers to prescribe Xtandi.

Meanwhile, Amgen created a foundation that covered its secondary hyperparathyroidism drug Sensipar (cinacalcet). 

“Amgen allegedly made payments to the fund even though the cost of these payments exceeded the cost to Amgen of providing free Sensipar to financially needy patients. However, by enabling the fund to cover the copays of Medicare beneficiaries, Amgen caused claims to be submitted to Medicare and generated revenue for itself,” DOJ said.

Amgen also used a foundation to create one fund to cover travel expenses for patients taking its multiple myeloma drug Kyprolis (carfilzomib) and another fund that covered copays for multiple myeloma drugs, including Kyprolis. 

But Astellas and Amgen are by no means alone in settling such kickback allegations.

Similar DOJ settlements were made earlier this month with Jazz Pharmaceuticals, Lundbeck and Alexion Pharmaceuticals, which paid a total of $122.6 million to resolve allegations that they also violated the False Claims Act by illegally paying the Medicare or Civilian Health and Medical Program copays for their own products, through supposedly independent foundations.

And back in December 2018, Actelion Pharmaceuticals paid $360 million to resolve claims that it also illegally used a foundation as a conduit to pay the copays of thousands of Medicare patients taking the company’s pulmonary arterial hypertension drugs.

In addition, Pfizer in May 2018 agreed to pay $23.85 million to resolve claims that it used a foundation as a conduit to pay the copays of Medicare patients taking three of its drugs.

Also, in 2017, Shire agreed to pay $350 million to settle allegations that it used kickbacks and other unlawful methods to induce clinics and physicians to use or overuse its product Dermagraft, which is a human skin substitute approved by FDA for the treatment of diabetic foot ulcers. Galena Biopharma also paid more than $7 million to resolve allegations that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, the Department of Justice announced today.

In addition, Valeant Pharmaceuticals’ Salix unit in 2016 paid $54 million to resolve claims that it violated the federal Anti-Kickback Statute and False Claims Act by using its “speaker programs” as a mechanism to pay kickbacks to doctors to induce them to prescribe Salix drugs and medical devices that were reimbursed by federal health care programs.

Omnicare, a nursing home pharmacy, also in 2016 agreed to pay $28.125 million to resolve allegations that it solicited and received kickbacks from Abbott Laboratories in exchange for promoting the company’s drug Depakote (valproic acid) for nursing home patients. 

Forest Pharmaceuticals in 2016 also paid $38 million to resolve allegations that it paid kickbacks to induce physicians to prescribe the drugs Bystolic (nebivolol), Savella (milnacipran HCl) and Namenda (memantine HCl).

In 2015, Novartis paid $390 million to settle claims that it gave kickbacks to specialty pharmacies in return for recommending two of its drugs, Exjade (deferasirox) and Myfortic (mycophenolic acid). And Daiichi Sankyo paid $39 million to settle similar allegations in 2015.

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