Incyte Corporation agreed to pay $12.6 million to resolve kickback allegations related to its blockbuster drug Jakafi.
The settlement was announced by the U.S. Attorney’s Office in Philadelphia. Incyte did not admit to wrongdoing. Incyte is headquartered near Wilmington.
The settlement involved Medicare and Tricare, the health care program for uniformed service members, retirees, and their families.
When a Medicare or Tricare beneficiary obtains a prescription drug covered by a federal health care plan, the beneficiary may be required to make a partial payment, in the form of a copayment, coinsurance, or a deductible, a release from the U.S. Attorney’s Office stated.
Congress included copays in the programs, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.
Under the Anti-Kickback Statute, a pharmaceutical company cannot offer or pay, directly or indirectly, any remuneration—which includes money or any other thing of value—to induce Medicare or Tricare patients to purchase the company’s drugs.
This prohibition includes the payment of patients’ copay obligations. Payment of those prescriptions in violation of the Anti-Kickback Statute leads to submission of false claims to Medicare and Tricare and violations of the False Claims Act, a release stated.
Incyte sells Jakafi, a medication approved to treat blood disorders. Incyte allegedly was the sole donor to a fund opened by a nonprofit foundation in November 2011 to assist only myelofibrosis patients. Myelofibrosis is a rare type of blood cancer.
After the fund opened, the government alleges that from November 2011 through December 2014, Incyte used its influence as the sole donor of the fund to have the foundation pay the copays of Medicare and Tricare patients taking Jakafi that did not have myelofibrosis and thus were not eligible for assistance from the fund.
Incyte managers allegedly pressured the foundation through phone calls and emails to provide economic assistance to these ineligible patients, and Incyte’s contractor helped ineligible patients complete their submitted applications to the fund for assistance.
Through this conduct, the government alleges that Incyte caused false claims for Jakafi to be submitted to Medicare and Tricare.
“Pharmaceutical companies cannot skirt the anti-kickback rules by disguising their inducements to federally-insured patients as charitable donations,” said Acting United States Attorney Jennifer Arbittier Williams. “This resolution shows our office’s continuing commitment to holding drug companies accountable for this conduct.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Justin Dillon, a former compliance executive at Incyte.
Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.
“We thank the relator and relator’s counsel for their contributions to this case. Without information from citizens like the relator, detecting fraud and conserving government program funds would be much more difficult,” said Acting U.S. Attorney Williams.
