Regeneron funneled bribes through patient charity, federal lawsuits

Drug maker Regeneron funneled tens of millions of dollars to a charity that paid out-of-pocket costs for patients who took the company’s expensive eye drug, and then lied to internal auditors about it, according to a lawsuit filed. Wednesday by federal prosecutors in Massachusetts. .

The lawsuit, filed in the United States Massachusetts District Court in Boston, claims that Regeneron violated federal anti-bribery laws by using the patient assistance fund to encourage doctors to prescribe his drug, Eylea, to a lesser competitor. expensive.

“Backlash schemes can undermine our health care system, compromise medical decisions and waste taxpayer money,” said Phillip Coyne, the special agent in charge in the Boston inspector general’s office for the Department of Health and Services. Humans.

In a statement, Regeneron dismissed the claims in the lawsuit and sought to draw attention to his efforts to develop a treatment for Covid-19.

“It is regrettable that the government has chosen to bring forward these unfounded allegations related to our 2013 and early 2014 patient assistance donations at a time when Regeneron employees were coming to work at the epicenter of the Covid-19 pandemic with the goal of providing effective treatment, “said Joseph LaRosa, Regeneron’s executive vice president, general counsel, and secretary. “We hope that our case is heard and we will file a motion to dismiss it.”

Regeneron is the latest company under federal scrutiny for its use of charities to cover patients’ drug costs. In 2018 Johnson & Johnson agreed to pay $ 360 million to settle allegations that a company it had acquired, Actelion Pharmaceuticals, channeled illegal bribes through a charity. In 2017, United Therapeutics paid $ 210 million to settle similar allegations, and several other drug makers have revealed that they are also under investigation for their use of patient care charities.

In 2019, the charity that Regeneron used to operate its patient assistance program, the Chronic Diseases Fund, paid $ 2 million to settle allegations that it had served as a conduit for companies to pay bribes to Medicare patients who they take their medications. That agreement involved her work with five other companies: Novartis, Dendreon, Astellas, Onyx, and Questcor. The charity, which was renamed Good Days, did not respond to a request for comment.

Pharmaceutical companies have long used financial assistance, such as coupons to cover drug copays, to ease the burden on individual patients and mitigate outrage at rising drug costs. Insurers cover most of the cost.

But federal anti-bribery laws prohibit companies from providing such assistance to Medicare and Medicaid beneficiaries because the practice is considered an incentive or bribe to buy their drugs. For years, drug makers have circumvented those laws by donating to nonprofit charities, which then give the money to Medicare patients. The arrangements are legal as long as there is no direct coordination between the pharmaceutical company and the non-profit organization.

But according to the lawsuit, Regeneron executives closely followed the amount of money they donated to the charity to pay for their medications and said they wanted the money to go only to Eylea and not to a competing product. Lucentis, which is sold by Genentech.

According to internal documents included in the lawsuit, the Chronic Diseases Fund sent the company detailed projections on how many patients would need help paying for Eylea, and provided specific financial requests to cover that amount.

In 2013, according to the lawsuit, Regeneron paid the fund $ 35 million, which coincided with what the fund told the company that it would be needed to cover copays for Eylea patients.

Prosecutors said company executives then lied to Regeneron’s internal auditors that they were investigating the use of the company’s charitable assistance programs and denied directly discussing with the fund how much money the cost of attendance would cover for Eylea.

Eylea is Regeneron’s best-selling drug, with more than $ 4.6 billion in 2019, and it treats a common eye disease in older people known as wet macular degeneration. It competes with Lucentis as well as Avastin, a similar drug that is also sold by Genentech. Although all three drugs have been found to have comparable efficacy, Avastin is much cheaper at $ 55 per dose, compared to $ 2,000 per dose for Lucentis and $ 1,850 for Eylea, according to federal lawsuit.

But Avastin actually became more expensive for patients, because the charity fund provided help only to those who were prescribed Lucentis or Eylea. Physicians, knowing this, commonly prescribe Eylea or Lucentis, “so as not to impose large Medicare copays on their patients or risk not being able to collect those copays,” the lawsuit said.

As a result, the patient assistance program was integral to driving Eylea’s sales, prosecutors said, because it made Eylea more affordable than Avastin. In 2014, for example, when a large retinal clinic learned that the Chronic Fund may have run out of funds, it began “putting patients on Avastin only,” according to an email from a Regeneron sales representative. that was included in the lawsuit.