Sanofi agreed to pay nearly $12 million to settle allegations that the drugmaker funneled kickbacks through a charity to boost sales of its expensive multiple sclerosis drug.
It is the latest scheme involving drug manufacturers that allegedly paid patient co-pays for their own drugs through purportedly independent charities. Seven drugmakers paid more than $624 million in related settlements last year, the Justice Department said.
A charity called The Assistance Fund helps pay for out-of-pocket costs for certain individuals, including Medicare patients who were prescribed Lemtrada, a drug made by Sanofi that can cost up to $100,000 a year. The Assistance Fund allegedly raised its maximum per-patient grant allocation to $20,000 specifically to accommodate Lemtrada patients.
Sanofi allegedly worked with a third-party reimbursement hub to orchestrate nine payments to the fund in 2015 and 2016 to predominantly cover the co-pays of Medicare patients who were taking Lemtrada. The drugmaker would allegedly schedule these payments when The Assistance Fund ran out of multiple sclerosis funding, and then referred as many Lemtrada patients as it could immediately after funds were replenished. This means MS patients who were not taking Lemtrada largely missed out, regulators said.
"Sanofi used a supposed charity as a conduit to funnel money to patients taking Sanofi's very expensive drug, all at the expense of the Medicare program," U.S. Attorney Andrew Lelling said in a statement.
Sanofi undermined the Medicare program through its use of kickbacks disguised as charitable donations aimed at MS patients who struggled with costly co-pays, said Joseph Bonavolonta, special agent in charge of the FBI Boston Division.
"They rigged the system so those taking its drug Lemtrada gained an unfair advantage over patients using other medications, and with today's settlement, they are finally being held accountable for their actions," he said in prepared remarks.
Sanofi admitted no wrongdoing and defended the practice, saying in a statement that it believes "these programs help patients lead healthier lives."
As part of the settlement, Sanofi agreed to a corporate integrity agreement with the HHS' Office of Inspector General. Sanofi must prove that its associations with third-party patient assistance programs are legal, comply with reviews, and require compliance-related certifications from executives and board members.
The whistle-blower will receive about $2.7 million of the settlement.