Health Law Daily Pharmaceutical giant to pay $11.85M to settle Medicare kickback allegations
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Tuesday, March 10, 2020

Pharmaceutical giant to pay $11.85M to settle Medicare kickback allegations

By Karin Hicks, J.D.

Sanofi-Aventis U.S., LLC receives praise for quickly responding to allegations that it paid kickbacks to Medicare patients through a charitable foundation.

Sanofi-Aventis U.S., LLC (Sanofi) entered into a settlement agreement with the U.S. government, under which it will pay $11.85 million, to resolve allegations that it received kickbacks in violation of Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. The settlement arose after an individual relator filed a qui tamaction under the False Claims Act alleging Sanofi paid kickbacks to Medicare patients through co-pay assistance foundations. The allegations involve a costly drug, Lemtrada®, which Sanofi markets in the United States (Settlement Agreement, February 28, 2020).

The claims arise from conduct beginning on January 1, 2015 through December 31, 2016. The government alleged that the Assistance Fund (TAF), an entity claiming 501(c)(3) status for tax purposes, operates funds that pay co-pays for certain patients, including a fund for Medicare patients who were prescribed Lemtrada®. The drug treats relapsing forms of multiple sclerosis (MS) and is administered by intravenous infusion in a hospital or physician’s office. A course of Lemtrada® costs approximately $100,000 per year with a Medicare Part B co-pay of approximately $20,000. In order to accommodate Lemtrada® patients, TAF raised its maximum per-patient grant allocation to $20,000. The MS fund run by TAF frequently ran out of funding and was closed to new patients. TAF did not maintain a wait list of patients turned away at these times. When TAF MS fund received funding, they opened to new patients and provided grants to the patients who applied immediately after opening. Grants were not provided to those patients who had attempted to apply at an earlier time when the fund was closed.

The government further alleged that Sanofi made payments to TAF with the intention of using the foundation to pay the Medicare co-pay obligations of patients taking Lemtrada®. The scheme involved a third-party reimbursement hub that identified to Sanofi those Medicare patients for whom physicians had prescribed Lemtrada®, but who had not yet received infusions of the drug due to inability to pay the hefty co-pay. Sanofi made nine total payments to TAF during the time in question. TAF’s MS fund had run out of funding, and was closed to new patients, when eight of the nine payments were made. When payments were made to the fund, knowing that the TAF MS fund did not maintain wait lists and would fund the first patients who applied for assistance, Sanofi instructed its hub to quickly refer as many Lemtrada® patients as possible to the TAF MS fund. As a result, Lemtrada® patients received a disproportionately large share of the Medicare co-pay grants that TAF issued after re-opening with the funds provided by Sanofi. Patients taking other MS drugs received a disproportionately small share of the Medicare co-pay grants issued by TAF.

According to the government’s allegations, Sanofi attempted to undermine the Medicare program through its use of kickbacks disguised as routine charitable donations. The scheme allegedly violates the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. Under the statute, a pharmaceutical company is prohibited from paying, directly or indirectly, any renumeration to induce Medicare beneficiaries to purchase, or their physicians to prescribe, the company’s drugs.

Sanofi agreed to pay $11.85 million to resolve the allegations. The terms of the settlement also require that Sanofi enter into a corporate integrity agreement (CIA) with the HHS Office of Inspector General. The CIA requires that Sanofi take measures to ensure that arrangements and interactions with third-party patient assistance programs are compliant with the law. Additionally, the CIA requires reviews by an independent review organization, and compliance-related certifications from company executives and Board members.

MainStory: TopStory CMSNews AuditNews BillingNews DrugBiologicNews FCANews FraudNews PaymentNews PartBNews PrescriptionDrugNews ProgramIntegrityNews QuiTamNews

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