A pharmaceutical firm has agreed to pay the Federal government $17.5 million to settle allegations by prosecutors that it paid physicians to prescribe its drugs to Medicare beneficiaries.
Investigators say the Kentucky firm increased the price of a certain drug it produces at the beginning of 2012, which led to a corresponding hike in the copay required of Medicare beneficiaries. In order to mitigate this, investigators claim the pharmaceutical company funded a third-party organization who, in turn, offered to reimburse Medicare beneficiaries’ copays for the drug.
Per investigators, the pharmaceutical firm was the organization’s sole donor at the time, and essentially all payments made by the foundation were to Medicare beneficiaries who had been prescribed the drug in question. As a result, prosecutors charged the pharmaceutical firm with violating the Anti Kickback Statute by offering illegal inducements to Medicare beneficiaries for purchase of their drug.
Additionally, prosecutors say the pharmaceutical firm paid illegal kickbacks to a pair of doctors in exchange for prescribing their drugs. Though it is not alleged that direct cash payments took place, prosecutors say the pharmaceutical firm paid the doctors significant speaking fees and bought impermissible entertainment events for the doctors in connection with their prescriptions of the firm’s drugs.
In addition to paying $17.5 million to the Federal government, the firm has agreed to enter into a five-year Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General. The program is intended to ensure that any future promotional activity carried out by the pharmaceutical firm complies with applicable Federal laws.
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