For years, federal prosecutors have gone after drug companies for allegedly using charity contributions as a way to boost sales. Biogen was among the pharma players to ink a federal settlement, but now insurance giant Humana is targeting the company’s charity giving with a new lawsuit.
In a suit filed in Massachusetts Friday, Humana says Biogen sought to boost sales for multiple sclerosis drugs Tysabri, Avonex and Tecfidera by “seeding” patients with free sample drugs then “sweeping” them onto Medicare and other government insurance programs through its charity giving.
To do so, Humana says Biogen illegally paid patients’ copays “under the guise of unrestricted charitable giving.” The insurer says Biogen worked with specialty pharmacy Advanced Care Scripts—plus the "nominally charitable foundations” Chronic Disease Fund and The Assistance Fund—to ensure Biogen’s giving would boost its sales.
Because Biogen's multiple sclerosis drugs cost between $50,000 and $80,000 per year, copays can be thousands of dollars per patient, Humana says. Those copays are a “tiny fraction” of the total cost, meaning drug companies can “earn a major return” from paying those copays. Humana says it spent more than $2.3 billion on Biogen's MS drugs between 2011 and 2019, and it's seeking "recovery of … overpayments."
“Biogen paid the foundations with the intent and understanding that they would use Biogen’s money specifically to cover the copays of patients taking Biogen’s MS Drugs,” Humana said in the lawsuit. “In so doing, Biogen intended that the MS drug patients—but not insurers—avoid the steep prices charged for the drug.”
A Biogen representative said the company doesn't comment on pending litigation.
The federal government has said it’s illegal for drugmakers to pay Medicare patient copays and has been targeting many of the industry’s top players with lawsuits of its own in recent years. For its part, Biogen agreed to settle similar allegations from federal prosecutors late last year for $22 million.
After Biogen made the deal, a spokesperson said the company “does not agree with the government’s view of the facts and believes that its conduct was appropriate." Biogen believes the "independent charitable assistance programs help patients lead healthier lives."
Meanwhile, the charities at the center of Humana’s lawsuit, the Chronic Disease Fund and The Assistance Fund, have inked federal settlements worth $4 million and $2 million, respectively. Advanced Care Scripts, the specialty pharmacy, also agreed to a $1.4 million settlement with the federal government.
Aside from Biogen, Humana has filed similar lawsuits against Teva and Regeneron, according to reports.