Actelion Pharmaceuticals Agrees to Pay $360 Million to Settle Kickback Allegations

Rare Daily Staff

The U.S. Attorney’s Office said Actelion Pharmaceuticals has agreed to pay $360 million to settle allegations that it violated the law by paying kickbacks to Medicare patients through a charitable foundation.

The allegations related to the company’s drugs for pulmonary hypertension. The government alleged that the drug company used Caring Voice Coalition as a conduit to pay the co-pays of thousands of Medicare patients using Actelion’s PAH drugs. By doing so, the government charged that Actelion was able to induce patients to purchase its drugs when the prices Actelion had set for those drugs otherwise could have posed a barrier to purchases.

“Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars,” said Phillip Coyne, special Agent in Charge, Office of the Inspector General of the Department of Health and Human Service’s Boston Regional Office. “We will continue to hold pharmaceutical companies accountable for subverting the charitable donation process in order to circumvent safeguards designed to protect the integrity of the Medicare program.”

The government alleges that in 2014 and 2015, Actelion routinely obtained data from the Caring Voice Coalition detailing how many patients on each Actelion drug the foundation had assisted, how much the foundation had spent on those patients, and how much the foundation expected to spend on those patients in the future. Actelion used this information to budget for future payments to the foundation on a drug-specific basis and to confirm that its contribution amounts to the foundation were sufficient to cover the copays of patients taking Actelion’s drugs, but not of patients taking other manufacturers’ PAH drugs.

The government also alleged that Actelion had a policy of not permitting Medicare patients to participate in its free drug program, which was open to other financially needy patients, even if those Medicare patients could not afford their copays for Actelion’s drugs. Instead, the government alleged that Actelion referred such Medicare patients to the foundation, which allowed the patients’ copays to be paid and resulted in claims to Medicare for the remaining cost.

On June 16, 2017, after the conduct alleged in the settlement agreement, Johnson & Johnson acquired Actelion. The government said Johnson & Johnson was not involved in the alleged conduct and the allegations do not relate in any way to Johnson & Johnson.

“This settlement, as do prior settlements concerning similar misconduct, make clear that the government will hold accountable drug companies that pay illegal kickbacks,” said Assistant Attorney General Joseph Hunt of the Department Justice’s Civil Division. “Pharmaceutical companies cannot have it both ways—they cannot continue to increase drug prices while engaging in conduct designed to defeat the mechanisms that Congress designed to check such prices and then expect Medicare to pay for the ballooning costs.”

Caring Voice Coalition ended its financial assistance program last year after the federal government took steps to stop it over concerns about drugmakers’ influence on the program.

December 10, 2018
Photo: Assistant Attorney General Joseph Hunt of the Department Justice’s Civil Division