BOSTON (Reuters) – The U.S. Justice Department on Wednesday sued Regeneron Pharmaceuticals Inc, accusing it of using a charity that helps cover Medicare patients’ drug costs as a means to pay kickbacks for using its expensive macular degeneration drug Eylea.
The government filed a lawsuit against the company in federal court in Boston, the latest case to result from an industry-wide probe of drugmakers’ financial support of patient assistance charities.
Drug companies are prohibited from subsidizing co-payments for patients enrolled in the government healthcare program for those aged 65 and older. Companies may donate to non-profits providing co-pay assistance as long as they are independent.
But the lawsuit said Tarrytown, New York-based Regeneron following the launch of Eylea in 2011 began funneling tens of millions of dollars through a patient assistance foundation to ensure virtually no one on Medicare had to pay co-pays.
The lawsuit said the scheme helped Regeneron boost sales for the drug, which typically costs over $10,000 per year. From 2013 to 2014, when the scheme was operating, Medicare paid $1.9 billion for Eylea, the lawsuit said.
Regeneron in a statement said it would vigorously defend itself. “We do not believe there is any merit to the complaint,” the company said.
Its stock price midday Wednesday was $604.62, down 3.84%.
The lawsuit follows an investigation that has resulted in more than $865 million in settlements with drugmakers and charities, including the foundation the government says Regeneron used, Good Days, previously known as the Chronic Disease Fund.
