BOSTON (Reuters) – A unit of Johnson & Johnson (JNJ.N) will pay $360 million to resolve an investigation into its financial support of a charity that helped Medicare patients cover out-of-pocket drug costs, the U.S. Justice Department said on Thursday.
FILE PHOTO: The Johnson and Johnson logo is seen at an office building in Singapore January 17, 2018. REUTERS/Thomas White
The settlement with Actelion Pharmaceuticals US Inc, which became a subsidiary of J&J following a 2017 acquisition, was the largest so far to result from an industry-wide probe into drugmakers’ support of patient assistance charities.
The government alleged Actelion from 2014 to 2015 used a charity as a conduit to improperly pay the co-pay obligations of thousands of Medicare patients using its pulmonary artery hypertension treatments Tracleer, Ventavis, Veletri and Opsumit.
That charity was Caring Voice Coalition, which has stopped providing aid after the government in 2017 revoked its approval to do so because of concerns that drugmakers had improper influence over the organization.
Actelion did not admit wrongdoing as part of the settlement. Caroline Pavis, a company spokeswoman, in a statement said the conduct pre-dated New Brunswick, New Jersey-based J&J’s acquisition of Actelion.
“We are committed to full compliance with all laws and regulations in our work to help patients get the medicines they need,” Pavis said.
Caring Voice Coalition did not respond to a request for comment.
Drug companies are prohibited from subsidizing co-payments for patients enrolled in the Medicare government healthcare program for the elderly. But companies may donate to non-profits providing co-pay assistance as long as they are independent.
Amid increased attention to rising drug prices in the United States, concern has arisen that donations from drugmakers to patient-assistance groups may be contributing to price inflation.
A probe led by the U.S. Attorney’s Office for the District of Massachusetts has led to allegations that several drugmakers used these charitable foundations as a means to pay Medicare patients’ co-pays in violation of the Anti-Kickback Statute.
Thursday’s settlement surpassed the largest accord previously announced by the office – an agreement by United Therapeutics Corp (UTHR.O) in December 2017 to pay $210 million to resolve claims it improperly used a charity to cover co-payments.
Pfizer Inc (PFE.N) in May resolved similar allegations for nearly $23.85 million. Jazz Pharmaceuticals Plc (JAZZ.O) and Lundbeck (LUN.CO) earlier this year disclosed they had reached agreements to resolve similar claims for $57 million and $52.6 million, respectively.
Several other drugmakers have, since 2015, disclosed receiving subpoenas as a result of the investigation, including Gilead Sciences Inc(GILD.O), Novartis AG(NOVN.S), and Regeneron Pharmaceuticals Inc (REGN.O).
Reporting by Nate Raymond in Boston; Editing by Bernadette Baum