A pair of pharmaceutical firms agreed to pay a total of $124.75 million to the Federal government to settle claims by prosecutors that they paid Medicare copays to themselves via shell organizations.
Federal prosecutors say the firms arranged to pay copayments for their own medicines, which is in violation of Medicare rules, which prohibits a pharmaceutical company from offering any remuneration to Medicare beneficiaries for purchasing their drugs.
Per investigators, the two companies violated the False Claims act (a/k/a "Lincoln Law") by conspiring with a pair of copay foundations to offer payments to Medicare beneficiaries, but only when purchasing the drugs sold by the two pharmaceutical companies in question. In both instances, the pharmaceutical companies were the sole donors to the foundations offering funding for their drugs. As a result, Federal regulators determined that the payments were a form of prohibited kickback.
In order to resolve allegations by Federal investigators, one pharmaceutical firm agreed to pay $100 million to the Federal government, while the other agreed to pay $24.75 million. Both firms will also participate in a five-year corporate integrity agreement (CIA) conducted by the Office of the Inspector General of the Department of Health and Human Services. The CIAs will mandate the implementation of measures, controls, and monitoring to promote independence from patient assistance programs they may donate to in the future. They will also implement risk assessment programs and seek compliance-related certifications from company executives and board members.
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