Three pharmaceutical companies pay out $122 million to settle fraud claims
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Three pharmaceutical companies pay out $122 million to settle fraud claims

The US Department of Justice on Thursday announced a $122 million settlement from three pharmaceutical companies as part of their effort to combat health care fraud.

While not admitting liability, Jazz, Lundbeck and Alexion agreed to pay to settle allegations that they violated the False Claims Act by undercutting the co-pay model of Medicare and the Civilian Health and Medical Program (ChampVa).

Jazz, which sells Xyrem (narcolepsy medication) and Prialt (chronic pain medication), created a fund, to which it was the sole donor, and compelled patients to use the fund while raising the price of the Xyrem by 150 percent. Jazz paid $57 million to settle.

Lundbeck sells Xenazine, which was the exclusive drug to treat chorea associated with Huntington’s Disease, until a generic version was created in 2015. Lundbeck created a fund, to which it was the sole donor, and would not allow Medicare and ChampVa patients to use the fund to induce copayment revenue from those two government sources. Lundbeck paid $52.6 million to settle.

Both Jazz and Lundbeck have agreed to enter into a corporate integrity agreement for five years to allow government monitoring.

Alexion sells Solirius, which is used to treat paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). The treatment with Solirius costs $500,000 per year. Alexion created a fund that was contingent on a patient taking Solirius to treat their condition. Alexion paid $13 million to settle the claims.

Due to Alexion’s reorganization, the government did not require them to enter into a corporate integrity agreement.

Joseph Bonavolonta, Special Agent in Charge of the FBI, Boston Field Division said: “Not only did these companies undermine a program that was set up to assist patients in decreasing the cost of their drugs, but they threatened the financial integrity of the Medicare program to which we all contribute and on which we all depend.”