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California Drug Company Pays Feds $97 Million To Dismiss Claims Of Illegal Kickbacks

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A California pharmaceutical company agreed last week to pay the Federal government $97 million for allegedly paying illegal kickbacks through a foundation that paid the copays for thousands of Medicare patients.

According to prosecutors, the firm established a foundation under the federal non-profit statute and funded it so as to avoid certain tax liabilities. They say they set the price of a new treatment of pulmonary arterial hypertension at a price point that may have been a barrier to many. However, prosecutors noted that the price of the drug rose by over seven times the rate of inflation in the period covered by last week’s settlement.

Due to the high price point, prosecutors say the firm used the foundation to pay copays for Medicare patients who otherwise couldn’t afford it. They say the firm paid copays from 2007 through 2010, using information from the foundation about how much it paid to patients the previous year to determine funding for the firm in the coming year. Additionally, prosecutors say the firm recommended Medicare patients to its foundation to help them purchase the drug, thereby boosting the profits it made on the drug.

The Law Offices of Bjorn Brunvand have been representing people charged with capital murder, felony drug charges, drunk driving, government fraud, and white-collar crimes for over a quarter century. Contact our office today to discuss your Tampa Bay-area state or federal charges.

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