The Department of Justice (“DOJ”) announced that it had filed a civil False Claims Act (“FCA”) complaint against drug manufacturer Regeneron Pharmaceuticals, Inc. (“Regeneron”), alleging that Regeneron paid tens of millions of dollars in kickbacks for its macular degeneration drug Eylea.

When Medicare beneficiaries obtain prescription drugs under Medicare Part B, they are often required to make a co-pay.  The Anti-Kickback Statute (“AKS”) prohibits pharmaceutical companies from offering to pay or paying, directly or indirectly, any remuneration—be it money or any other thing of value, including coverage of co-pays—to induce Medicare patients to purchase the companies’ drugs.  According to the complaint, Regeneron used a third-party foundation to funnel tens of millions of dollars in kickbacks to cover Medicare beneficiaries’ co-pays for Regeneron’s drug Eylea.

According to the U.S. Attorney for the District of Massachusetts: “Regeneron allegedly paid these substantial sums only after confirming that the foundation needed the money to cover co-pays only for Eylea, and not for competing drugs, and that the company’s payments would generate a handsome return on investment . . . in the form of Medicare payments for Eylea.  Furthermore, senior company executives allegedly took extensive measures to cover up the scheme.”

Read the DOJ press release here.