An industrywide probe of pharma’s charity contributions has spawned multimillion-dollar kickback settlements, and Actelion is the latest to make a deal with the feds.
The Johnson & Johnson unit inked a $360 million settlement on Thursday to wrap up allegations that its charity contributions served as kickbacks to boost use of its pulmonary arterial hypertension drugs. It’s the largest settlement so far as the Department of Justice digs into a number of drugmakers’ contributions to charities that help patients pay for their medications.
Drugmakers are prohibited from paying Medicare patient copays, and the government said Actelion used a “purportedly independent” patient foundation as a conduit to do just that. In 2014 and 2015, the feds said, Actelion got ahold of a foundation’s data on patients using Actelion drugs and the charity’s spending on those patients. The company then used the data to budget future donations to the foundation, authorities said, and instead referred Medicare patients to the foundation, which paid their co-pays.
“Using data from a foundation that it knew it should not have, Actelion effectively set up a proprietary fund to cover the copays of just its own drugs,” U.S. Attorney Andrew Lelling said in a statement. “Such conduct not only violates the anti-kickback statute, it also undermines the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices.’
During the period covered by the DOJ settlement, Actelion raised the price of its leading PAH drug, Tracleer, by nearly 30 times the rate of overall inflation in the U.S., Lelling said.
Actelion didn’t admit fault with the settlement. Johnson & Johnson purchased Actelion in early 2017 for $30 billion. Authorities say the alleged conduct occurred before the J&J buyout.
A J&J representative said the company is “committed to full compliance with all laws and regulations in our work to help patients get the medicines they need.”
“Today’s agreement resolves the government’s investigation into Actelion’s donations to a patient assistance foundation in 2014 and 2015,” the spokeswoman added. “Before the company was acquired in 2017.”
Actelion isn’t the only company to face scrutiny for its charity contributions. Many industry players have disclosed investigations on the subject, and several have inked settlements to resolve allegations their payments served as kickbacks. Pfizer agreed to pay $23.8 million, and United Therapeutics’ settlement amounted to $210 million.
Aside from those companies, Jazz and Lundbeck disclosed settlements worth $57 million and $52.6 million, respectively, Reuters reports.