Drug Maker Pays $360 Million to Settle Investigation Into Charity Kickbacks

The drug maker Actelion Pharmaceuticals has agreed to a $360 million settlement stemming via an investigation into whether the company illegally funneled kickbacks through a patient-assistance charity, federal prosecutors said Thursday.

Actelion, which was acquired by Johnson & Johnson in 2017 in addition to also makes expensive drugs to treat a rare lung condition, can be the latest pharmaceutical company to settle federal inquiries into their ties to patient-assistance groups, including whether companies have used the patient programs to improve the cost of their drugs.

In 2017, United Therapeutics paid $210 million to settle similar allegations, in addition to also Pfizer paid nearly $24 million to do so in May. Several various other drug makers have disclosed which they are also under investigation for their use of patient-assistance charities, including Biogen, Celgene in addition to also others.

“Pharmaceutical companies cannot develop the idea both ways — they cannot continue to improve drug prices while engaging in conduct designed to defeat the mechanisms which Congress designed to check such prices in addition to also then expect Medicare to pay for the ballooning costs,” Joseph H. Hunt, an assistant attorney general for the Justice Department, said in a news Discharge.

In 2014 in addition to also 2015, prosecutors said, Actelion raised the cost of its main drug, Tracleer, by nearly 30 times the rate of inflation. Tracleer, which can be prescribed to treat pulmonary arterial hypertension, sells in pharmacies for an average cash cost of about $14,500 for 60 tablets, according to the website GoodRx.

Caroline Pavis, a spokeswoman for Actelion, said in a statement which the company was committed to complying with the law. the idea admitted no wrongdoing in its settlement. Johnson & Johnson was not implicated within the allegations since the activity under scrutiny took place before Actelion was acquired.

Drug companies often help patients pay their out-of-pocket costs through coupons or various other financial assistance. These payments are not just about benevolence — they also help blunt the outrage over rising drug prices by limiting how much patients have to pay. Insurers then cover most of the cost.

however federal anti-kickback laws prohibit companies via giving such financial assistance to Medicare in addition to also Medicaid beneficiaries because doing so can be considered an inducement to buy their drugs. For years, drug makers have skirted those laws by instead donating to nonprofit charities, which then give the money to Medicare patients. Such arrangements are legal as long as there can be no direct coordination between the pharmaceutical company in addition to also the nonprofit organization.

Federal prosecutors said Actelion violated the law by collecting detailed data in 2014 in addition to also 2015 about the patients receiving help via a nonprofit, the Caring Voice Coalition, in addition to also using the data to budget for future donations. As a result, Actelion ensured which the money the idea donated could be used only to assist patients who used its drugs, in addition to also not competing companies’ treatments for the pulmonary condition.