Jazz, Alexion and Lundbeck to pay $122m to settle kickback probe

Drugmakers Jazz Pharmaceuticals, Lundbeck and Alexion Pharmaceuticals have agreed to pay a total of $122.6m to settle allegations of paying kickbacks via copay assistance foundations.

The US Department of Justice (DOJ) said that the companies violated the False Claims Act by paying patients under Medicare and the Civilian Health and Medical Program (ChampVA) through purportedly charitable organisations.

These charitable foundations allegedly subsidised the copays with financing from the companies.

The Anti-Kickback Statute restricts drugmakers from offering or paying, directly or indirectly, in the form of money or any other thing of value to motivate Medicare or VA patients to buy their medicines.

DOJ Civil Division assistant attorney general Jody Hunt said: "Pharmaceutical companies undercut a key safeguard against rising drug costs when they create assistance funds to serve as conduits for the companies to subsidise the copays of their own drugs.

"These enforcement actions make clear that the government will hold accountable drug companies that directly or indirectly pay illegal kickbacks."

Jazz Pharmaceuticals has agreed to pay $57m to resolve the claims against it.

According to the DOJ, Jazz teamed up with a foundation in 2011 to create a fund to cover the copays of its narcolepsy drug Xyrem and non-opioid, chronic pain medicine Prialt.

The government added that the company increased Xyrem’s price at more than 24 times the rate of overall inflation in the US.

Lundbeck has agreed to pay $52.6m to settle the allegations that it paid a foundation’s fund to cover the copays of patients taking its Xenaxine drug, which is indicated for chorea related to Huntington’s disease.

Through 2011 to 2016, Lundbeck reportedly raised the drug’s price at more than 22 times the rate of overall inflation in the country.

Both the companies signed five-year corporate integrity agreements as part of the settlement.

These agreements require the companies to deploy measures, controls and monitoring for promoting independence from any patient assistance programmes to which they donate.

Meanwhile, Alexion has agreed to pay the government $13m to settle the allegations that it established a fund to cover the copay of its Soliris medication, which has a list price of nearly $500,000 per year.

The government said that the fund was intended to support the medication’s high cost, and the company would notify the foundation to suspend copay support if a patient would not take Soliris.

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