U.S. Government Alleges Regeneron Used Kickbacks to Boost Eylea Sales
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On Wednesday, the U.S. Department of Justice filed a civil False Claims Act complaint against Regeneron that alleges the company paid tens of millions of dollars in kickbacks to a foundation in order to cover co-pays for Eylea. The government said shortly after Eylea launched in 2012, the company considered how much to pay a foundation that covered Medicare co-pays. Regeneron’s senior management was willing to pay the foundation only enough to cover Medicare co-pays for Eylea patients and wanted to see a significant return on investment, the government charged. According to the government, Regeneron determined that by covering the copays for Eylea, the company would earn a return of over 400% on its payments to the foundation. During that two-year period, Medicare paid $1.9 billion for Eylea, the lawsuit said.
The federal Anti-Kickback Statute prohibits pharmaceutical companies from using its resource, either directly or indirectly, to cover co-pays as an encouragement to purchase drugs that are covered through Medicare.
U.S. Attorney Andrew E. Lelling said Regeneron funneled tens of millions of dollars in kickbacks through a third-party foundation to ensure that few Medicare patients paid a co-pay on Eylea and that physicians who prescribed and purchased the drug did not have to collect Medicare co-pays from their patients.
“Regeneron allegedly paid these substantial sums only after confirming that the foundation needed the money to cover co-pays only for Eylea, and not for competing drugs and that the company’s payments would generate a handsome return on investment. Furthermore, senior company executives allegedly took extensive measures to cover up the scheme,” Lelling said in a statement.
Regeneron denied any wrongdoing and said a “misguided lawsuit” was “attempting to assign wrongful intent to entirely legal conduct.” Tarrytown, N.Y.-based Regeneron said the government’s complaint relates to “lawful, charitable donations” it made in 2013 and 2014. Those donations were made to an independent charitable patient assistance foundation in order to assist financially disadvantaged elderly patients with wet age-related macular degeneration gain access to treatment to prevent blindness, Regeneron said. That foundation, Good Days, agreed to pay $2 million to resolve allegations it conspired with other companies, including Novartis, to pay kickbacks to Medicare patients to cover co-pays.
In 2017, Regeneron disclosed it was among a number of companies that received subpoenas in connection with a government inquiry related to charitable organizations that provide financial assistance to patients. The company said it never settled that case because it “did not engage in illegal or wrongful conduct.”
Joseph LaRosa, Regeneron’s General Counsel and Secretary, called it unfortunate that the government has brought charges against the company during a time of stress due to the pandemic. He said the company will defend itself and seek to have the charges dismissed because Regeneron does not believe it did anything illegal.
"We believe our actions are legal and have helped preserve and restore the vision of elderly patients. Regeneron's donations to independent charity foundations help elderly patients access medicines that are prescribed by their physicians,” LaRosa said in a statement.
Regeneron said it is proud of its legacy of supporting patients in need through donations to charitable foundations to help ensure elderly patients are able to access the medicines prescribed by their physician.
The case is U.S. v. Regeneron Pharmaceuticals Inc, U.S. District Court, District of Massachusetts, No. 20-11217.