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Catch of the Week: Another Pharma Company, Incyte, Settles FCA Claims For Kickbacks to a Charitable Foundation

Posted  May 7, 2021

The Department of Justice announced this week that Incyte Corporation, a Delaware pharmaceutical company, has agreed to pay $12.6 million to resolve allegations that it violated the False Claims Act by paying kickbacks to a charitable foundation to increase prescriptions for the drug Jakafi, which is used to treat myelofibrosis, a form of leukemia that causes extensive scarring in bone marrow and leads to severe anemia and fatigue.  This is another in a long list of FCA settlements by pharma companies—including Actelion, Aegerion, Amgen, United Therapeutics, Jazz, Astellas, Alexion, Sanofi-Aventis, Gilead, and Pfizer—accused of making conditional donations to patient assistance programs (PAPs) to increase drug profits.

Whistleblower Brought Incyte’s Kickbacks to the Government’s Attention

Unlike many prior FCA settlements against pharma companies for paying kickbacks to charities, the settlement with Incyte did not originate from a DOJ investigation, but from a whistleblower.  Relator Justin Dillon filed his FCA complaint against Incyte in June 2018 when he was employed as a Senior Director in Incyte’s US compliance department.  Mr. Dillon had worked for Incyte for approximately three years and had more than 22 years of experience in the pharmaceutical industry, including 12 years in compliance.  He alleged, and the DOJ in its press release does as well, that Incyte used an independent foundation as a conduit to cover the copays of certain Medicare and TRICARE beneficiaries taking Jakafi who were ineligible for this assistance because they did not suffer from myelofibrosis.  Incyte terminated Mr. Dillon in October 2018, allegedly as retaliation for raising numerous compliance issues with Incyte management.

Whistleblower Pursued FCA Claims Against Incyte

In early 2019, the DOJ—and many states—declined to intervene in Mr. Dillon’s FCA complaint, but Mr. Dillon pursued his claims with the help of private counsel, consistent with his rights under the False Claims Act.  Incyte did not move to dismiss Mr. Dillon’s FCA complaint but instead went straight to the summary judgment stage of litigation, in effect conceding the legal sufficiency of Mr. Dillon’s allegations.  A settlement was reached prior to the Court issuing a decision on Incyte’s motion.  Apparently, Incyte saw the writing on the wall, and decided not to postpone the inevitable.

DOJ Intervened for Purposes of FCA Settlement

DOJ jumped in at the end of this unusually short FCA litigation for purposes of settlement.  Jennifer Arbittier Williams, the Acting U.S. Attorney for the Eastern District of Pennsylvania, where Mr. Dillon’s FCA complaint was filed, gave Mr. Dillon and his counsel due credit for bringing Incyte’s fraudulent conduct to the government’s attention, stating:  “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.”  The DOJ press release omits this tribute.  As compensation for the professional risks in coming forward and contribution to the case, Mr. Dillon will receive approximately 28.5% of the recovery, or about $3.59 million.

Pharma Gifts Are Not Always Gifts – They Are Sometimes Kickbacks

As this case again demonstrates, a gift from a pharmaceutical company is not always a gift.  It is sometimes a kickback that defrauds government programs and harms patients.  More whistleblowers are needed to root out this type of pharmaceutical marketing fraud.  If you would like more information or would like to speak to a member of the Constantine Cannon whistleblower lawyer team, please contact us for a confidential consultation.


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Tagged in: Anti-Kickback and Stark, Catch of the Week, FCA Federal, Healthcare Fraud, Medicare, Pharma Fraud, Whistleblower Case, Whistleblower Rewards,