Pfizer was alleged to have used a tax exempt, non-profit foundation as a conduit to pay drug co-pays for Medicare patients who were either prescribed two Pfizer drugs for the treatment of renal cell cancer (Sutent and Inlyta) or another Pfizer drug for the treatment of atrial fibrillation or atrial flutter (Tikosyn). The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration (which includes money or any other thing of value) to induce Medicare patients to purchase the companies’ drugs.
The government alleged that, in order to generate revenue and instead of giving Sutent and Inlyta to Medicare patients who met the financial qualifications of Pfizer’s existing free drug program, Pfizer worked with a third-party specialty pharmacy to transition some portion of those patients to the foundation, which covered the patients’ Medicare copays and caused Medicare claims to result from the filling of the patients’ Sutent and Inlyta prescriptions. In connection with this initiative, according to the government’s allegations, Pfizer made donations to the foundation and thereafter received data from the foundation, via the specialty pharmacy, confirming that the foundation funded the Medicare copays of Sutent and Inlyta patients.
With respect to Tikosyn, Pfizer raised the wholesale acquisition cost of a package of forty .125 mg capsules of the drug by 44 percent during the last three months of 2015. Knowing the price increase would increase Medicare beneficiaries’ copay obligations for Tikosyn, which could result in more Medicare patients needing financial assistance to fill their Tikosyn prescriptions, Pfizer allegedly worked with the foundation to create and finance a fund for Medicare patients being treated for arrhythmia with atrial fibrillation or atrial flutter. According to the allegations in the settlement agreement, Pfizer coordinated the timing of the opening of the fund for these patients with the implementation of a Tikosyn price increase, and Pfizer then began referring to the foundation any Medicare patients who needed financial assistance to meet their newly-increased copays for the drug.
“According to the allegations in today’s settlement agreement, Pfizer knew that the third-party foundation was using Pfizer’s money to cover the co-pays of patients taking Pfizer drugs, thus generating more revenue for Pfizer and masking the effect of Pfizer’s price increases. The Anti-Kickback Statute exists to protect Medicare, and the taxpayers who fund it, from schemes like these. At the same time, we commend Pfizer for stepping forward to resolve these issues in a responsible manner.”
“Kickbacks undermine the independence of physician and patient decision-making, and raise healthcare costs,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “As today’s settlement makes clear, the Department will hold accountable drug companies that pay illegal kickbacks—whether directly or indirectly—to undermine taxpayer funded healthcare programs, including Medicare.”
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