Incyte Corporation will pay $12.6 million as part of a civil settlement to resolve federal allegations that it operated a kickback scheme involving its popular cancer drug Jakafi (ruxolitinib).
Allegations in the case first surfaced as a result of a whistleblower lawsuit filed by Ross Feller Casey, LLP of Philadelphia, on behalf of a former employee of the Wilmington, Delaware-based pharmaceutical company.
The kickback scheme allegedly involved patients of Medicare and TRICARE, a healthcare program for military personnel and their dependents.
Medicare and TRICARE patients may be required to pay a form of copayment depending on the prescribed drug. Congress included copay requirements, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can set for their drugs. The federal Anti-Kickback Statute prohibits pharmaceutical companies from paying, directly or indirectly, any remuneration to induce Medicare or TRICARE patients to purchase the companies’ drugs.
The federal government and the whistleblower alleged that to increase the number of prescriptions for its high-priced drug, Incyte violated federal rules for three years ending in December 2014 by using a charitable fund known as the Chronic Disease Fund, or Good Days, to pay the copays for some Medicare and TRICARE beneficiaries. Copays for Jakafi, which was approved to treat myleofibrosis in 2011, could cost a patient several thousands of dollars annually.
The federal government alleged that money donated to the fund by Incyte was earmarked to go only to people seeking help covering Jakafi copayments and that Incyte managers pressured the fund to provide economic assistance to patients of its drug who were not eligible for assistance. Also, the United States claimed that Incyte’s contractor managed the Jakafi patient support hotline and assisted patients with completing certain sections of their applications. As a result of the conduct, the United States alleges that Incyte knowingly caused false claims to be submitted to Medicare and TRICARE.
Ross Feller Casey attorney Brian J. McCormick, Jr. represented the whistleblower, a former employee of Incyte who will recover several million dollars as part of the government’s settlement. The False Claims Act allows citizens like this whistleblower who witness fraud involving federal programs or funds to file a lawsuit on behalf of the United States and earn a reward if the lawsuit is successful.
“Pharmaceutical manufacturers sometimes use third-party foundations to pay kickbacks masking the high prices those companies charge for their drugs,” said McCormick, a leading whistleblower lawyer. “Unfortunately, this misconduct is widespread, and enforcement is necessary until pharmaceutical companies stop circumventing anti-kickback laws to artificially bolster high drug prices at the expense of American taxpayers.”
“We were thrilled to aggressively pursue this investigation with the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the Department of Justice, and the Office of Inspector General for HHS and to help the Government uncover this scheme,” added McCormick. “The team in Philadelphia – Assistant U.S. Attorneys Paul J. Koob and Matthew E.K. Howatt, and Charlene Keller Fullmer, Deputy Chief for Affirmative Litigation, deserve a lot of credit for pursuing the case and acting on our client’s information.”
In announcing the settlement, federal officials thanked McCormick and his client for bringing the issues to light. Read the statement
The Legal Intelligencer newspaper ran a story on the settlement. Read the story below:
If you have information about fraud involving federal or state funds, you should contact a whistleblower lawyer as soon as possible. You may be entitled to substantial compensation, but your time may be limited.
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