The U.S. Department of Justice announced on September 23, 2020 that the pharmaceutical company Gilead Sciences, Inc. (“Gilead”), which is based in Foster City, California, has agreed to pay $97 million to resolve claims that it violated the False Claims Act by illegally using a foundation as a conduit to pay the copays of thousands of Medicare patients taking Gilead’s pulmonary arterial hypertension drug, Letairis.
When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (collectively “copays”). Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.
Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce Medicare patients to purchase the company’s drugs. This prohibition extends to the payment of patients’ copay obligations.
Gilead sells Letairis, which is approved for treatment of pulmonary arterial hypertension. The government alleged that Gilead used a foundation, which claims 501(c)(3) status for tax purposes, as a conduit to pay the copay obligations of thousands of Medicare patients taking Letairis and to induce those patients to purchase Letairis, because it knew that the prices Gilead set for Letairis could otherwise pose a barrier to those purchases.
From 2007 through 2010, Gilead made payments to the foundation, which, in turn, used those funds to pay copays of patients prescribed Letairis. The government alleged that Gilead routinely obtained data from the foundation detailing how much the foundation had spent for patients on Letairis; it then used this information to decide how much to pay to the foundation and to confirm that its payments were sufficient to cover the copays of only patients taking Letairis. The government also alleged that, to generate revenue from Medicare and induce purchases of Letairis, Gilead referred Medicare patients to the foundation, which resulted in claims to Medicare to cover the cost of Letairis.
With regard to the settlement, the Special Agent in Charge, Office of the Inspector General of the Department of Health and Human Service’s Boston Regional Office stated, “When pharmaceutical companies deceitfully employ the charitable donation process as an instrument to subsidize copays for their own drugs, it subverts a critical safeguard against the excessive inflation of drug costs. Manipulation of this process threatens the integrity of our federal healthcare system, disregarding the American taxpayer who ultimately bears the cost. As such, we remain vigilantly focused on confronting this type of conduct and will continue our aggressive enforcement in this area.”
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
Click here to visit our website or call us toll-free in the United States at 800-295-3959 to be connected with qui tam lawyers (False Claims Act lawyers) in your U.S. state who may assist you with a False Claims Act lawsuit.
Turn to us when you don’t know where to turn.