Humana sues Regeneron over pricing of popular macular degeneration drug

Insurance company Humana filed a racketeering and fraud lawsuit against Regeneron Pharmaceuticals on Thursday over a copay assistance scheme for its top-selling drug, Eylea.

Humana's suit is based on allegations by the U.S. Department of Justice last year that Regeneron gave a patient-assistance charity kickbacks to boost sales of Eylea, which treats age-related macular degeneration. That case is ongoing in Boston's federal court.

Humana accused Regeneron of inflating the drug's price from $1,500 a dose to $1,950 by partnering with the charity, the Chronic Disease Foundation, to cover patients' cost-sharing obligations for Eylea but not for its competitor. The arrangement boosted Eylea sales at the expense of Medicare and health plans, which shouldered the rest of the cost, the insurer said in its complaint, filed in the Southern District of New York.

Under federal law, drug companies can donate to third-party charities that offer copay assistance but cannot earmark contributions for their own products.

Humana's Medicare and commercial plans have spent more than $900 million on Eylea claims since 2011, according to the complaint. The Louisville, Ky.-based insurer is seeking three times that in damages.

"By funding, and therefore eliminating, the cost-sharing obligations associated with Eylea, Regeneron made Eylea 'cheaper' to patients than its competitor," Humana said in its complaint, adding that doctors and patients would have otherwise resorted to Eylea's competitor. Compounding pharmacies sell that drug, Avastin, at $55 per dose, according to Humana's complaint.

Regeneron spokeswoman Alexandra Bowie said Humana's lawsuit repeats the allegations made by the U.S. Attorney for the District of Massachusetts last year.

"We believe both the complaint by the U.S. Attorney in Massachusetts and this new complaint are without merit," she said in a statement. "Regeneron is proud to support patients in need through donations to charitable foundations, which help to ensure elderly patients have access to the medicines prescribed by their physicians."

Medicare spends more on Eylea than on any other drug. In 2019 the product accounted for $2.9 billion in Medicare spending. It has meanwhile raked in profits for Regeneron. The Tarrytown-based pharmaceutical company reported Eylea sales of $2.1 billion in the first quarter of this year, up 17% year over year.