INFLATED PRICES: Drug Maker Teva Pharmaceuticals Gets Caught up in Alleged Kickbacks
Posted on 08/19/2020
The United States government has filed a False Claims Act complaint against Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. (Teva). The U.S. government is alleging the Teva entities illegally paid the Medicare co-pays for their multiple sclerosis product, Copaxone, through purportedly independent foundations that the companies used as conduits in violation of the Anti-Kickback Statute. The claims asserted in the U.S. government’s complaint are allegations only. Copaxone is one of Teva’s largest drugs, generating hundreds of millions in revenue annually for the company.
Pharmaceutical companies, at times use, foundations as conduits to funnel kickbacks to Medicare patients. Kickback arrangements end of hurting the U.S. taxpayer by higher drug costs.
“The government’s complaint today alleges that Teva used ostensibly independent charitable foundations as vehicles to pay hundreds of millions of dollars in kickbacks, all while raising the price of its drug, Copaxone, at a rate over 19 times the rate of inflation,” said Andrew E. Lelling, United States Attorney for the District of Massachusetts in a press release. “Teva’s alleged kickbacks undermined the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices.”
The press release adds, “The government alleges that, from 2007 through 2015, Teva paid The Assistance Fund (TAF) and Chronic Disease Fund (CDF) with the intent and understanding that the foundations would use Teva’s money to cover the Medicare co-pays of patients taking Copaxone. During the same period, Teva raised the price of Copaxone from approximately $17,000 per year to over $73,000 per year.
According to the United States’ complaint, Teva largely effectuated its scheme through its vendor, Advanced Care Scripts Inc. (ACS), a specialty pharmacy to which Teva referred virtually all Copaxone patients who faced Medicare co-pays for the drug. Teva used information from ACS and from TAF and CDF to calculate how much money to pay each foundation to maintain coverage of the Medicare co-pays of Copaxone patients enrolled in each foundation. The U.S. further alleges that ACS coordinated the referral of newly-prescribed Copaxone patients to TAF and CDF with Teva, referring patients in batches at the same time that Teva made payments to the foundations, which ensured that Copaxone patients received the vast majority of the co-pay assistance TAF and CDF provided with money from Teva.”
The case is captioned United States v. Teva Pharmaceuticals USA, Inc. and Teva Neuroscience, Inc. No. 20-cv-11548. (D. Mass.).
