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Drug maker agrees to settle kickback allegations for $210 million

| Jan 10, 2018 | Stark Law/Anti-Kickback Statutes |

United Therapeutics Corporation (UT), based in Maryland, has just agreed to settle Anti-Kickback Statute and False Claims Act allegations for $210 million. The drug maker has also entered into a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General.

The allegations involve copayments, coinsurance and deductibles (“copays”) for several of UT’s pulmonary arterial hypertension drugs, Adcirca, Remodulin, Tyvaso, and Orenitram. According to the Department of Justice, UT overcame the Anti-Kickback Statute’s prohibition on pharmaceutical companies’ payment of patient copays by essentially directing its foundation to make the payments.

Between 2010 and 2014, the DOJ says, UT made donations to the foundation which were used to pay copays for the PAH medications. The foundation turned over data about these payments to UT, which in turn used that data to determine how much to donate to the foundation. The DOJ argues that this was done in an effort to induce patients to take UT medications.

“UT used a third party to do exactly what it knew it could not lawfully do itself,” said an acting U.S. attorney.

In addition, the government alleges that UT had a policy that adversely affected Medicare patients and cost Medicare money. The company had a program that provided free drugs to needy patients, but UT’s policy was not to accept Medicare patients in that program. Instead, Medicare patients were referred to the foundation for copay assistance and claims were submitted to Medicare. This, the DOJ argues, violated the False Claims Act.

A large number of state and federal agencies participated in the investigation into UT:

  • The Justice Department’s Civil Division
  • The U.S. Attorney’s Office for the District of Massachusetts
  • The Department of Health and Human Services, Office of Inspector General
  • The Federal Bureau of Investigation
  • The Department of Veterans Affairs, Office of Inspector General
  • The United States Postal Inspection Service

The imbalance in power between the government and the drug maker is notable. With multiple agencies using their full investigative authority, the pressure to pay a fine and enter into a corporate integrity agreement would have been substantial.

If your health care company is under investigation for violations of the Anti-Kickback Statute, the Stark Act, or any regulation, the time to obtain counsel is now. The earlier in the process your attorneys become involved, the better their chance of protecting you from serious consequences.

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