The federal government’s probe into pharma’s co-pay assistance charities has snared some of the biggest names in the business, and Thursday the Department of Justice said three drugmakers have inked settlements totaling $122.6 million.
Jazz, Lundbeck and Alexion each struck deals with the DOJ—worth $57 million, $52.6 million and $13 million, respectively—to resolve allegations of using payments to charities as “conduits” to help Medicare and other patients afford their drugs. The companies previously disclosed the settlements in securities filings and releases. The settlements don't include admissions of liability, but Jazz and Lundbeck are entering five-year corporate integrity agreements as part of their deals.
The DOJ says Jazz asked a patient foundation in 2011 to establish a fund to pay Medicare patients’ co-pays on narcolepsy med Xyrem. Jazz was the sole donor to the fund, the government says. Each company blocked Medicare patients from participating in their free drug programs. Instead, drugmakers referred patients to the charities, which helped pay co-pays and allowed patients to access the drugs in a way that generated sales, the government said.
According to allegations, Jazz used a patient assistance charity to boost sales for chronic pain drug Prialt, as well.
Authorities say Lundbeck boosted sales of Xenazine, a drug to treat chorea associated with Huntington’s disease, by making millions of dollars in payments to a patient foundation that “ostensibly provided financial support only for patients with Huntington’s disease.” But the drugmaker referred various other patients to the foundation, according to the government, and the charity helped pay co-pays for unapproved uses.
Lastly, authorities say Alexion boosted Soliris sales by setting a high price—around $500,000 per year—and making donations to a patient fund established specifically to help pay Medicare co-pays. Alexion knew its price served as a barrier to access, the government alleged.
A spokesman for Jazz said the company “believes patients deserve access to medicines that are prescribed to them.” The company has "maintained, and remains committed to maintaining, a comprehensive compliance program," he added. A representative for Lundbeck said the deal “allows us to put this matter behind us and continue our focus on providing innovative medications for people living with brain disorders."
Federal authorities have been looking into pharma’s patient charity contributions for years and have secured settlements of varying sizes. Pfizer last May agreed to pay $23.8 million to resolve its own probe, while United Therapeutics inked a $210 million deal back in late 2017.