In a statement, the U.S. Department of Justice stated, Gilead Sciences Inc has agreed to settle allegations that it improperly used the Caring Voice Coalition as a conduit to cover thousands of patients’ co-payment obligations and has agreed to pay $97 million to resolve a U.S. government probe into alleged claims that it used a purportedly independent charity to pay illegal kickbacks to cover Medicare patients’ out-of-pocket costs for its pulmonary arterial hypertension drug Letairis.
The DoJ said, “Gilead’s actions enabled the Foster City, California-based drugmaker to boost revenue, ran from June 2007 to December 2010, and violated the federal False Claims Act”.
This law bars drugmakers from offering anything of value to induce Medicare patients to buy their products,
“Gilead used data from CVC that it knew it should not have, and effectively set up a proprietary fund within CVC to cover the co-pays of just its own drug,” said U.S. Attorney Andrew Lelling. He went on to add, “such conduct undermines Medicare’s co-pay structure, which Congress meant to prevent against inflated drug prices.”
While drugmakers are not allowed to subsidize co-payments for elderly Americans enrolled in Medicare, they can however donate to independent non-profit organizations, that provide such assistance.
In a statement Gilead said, it believes it has not violated the law, that it has addressed concerns raised by the government and that there was no allegation that patients who received medication did not need it.
The settlement comes in the wake of an industry-wide probe led by Lelling’s office into drugmakers’ support for the so-called patient assistance charities.
Following the probe, eleven drug companies, including Novartis AG, Pfizer Inc and United Therapeutics Corp, have reached out for settlements with the government with the settlement amount grossing more than $1 billion.
Four foundations and a pharmacy have also settled.