Pfizer Agrees to Pay $23.85 Million to Resolve False Claims Act Liability for Paying Kickbacks

The Department of Justice today announced that Pfizer agreed to pay $23.85 million to resolve allegations that it used a foundation as a conduit to pay the copays of Medicare patients taking three Pfizer drugs. Medicare Part B or D beneficiaries typically make a partial payment when obtaining prescription drugs in the form of a copay, coinsurance, or deductible. Under the Anti-Kickback Statute, pharmaceutical companies are prohibited from paying patients’ copay obligations to induce Medicare patients to purchase the company’s drugs.

The government alleged that Pfizer used a foundation to pay the copays of Medicare patients taking Sutent, Inlyta, and Tikosyn. Sutent and Inlyta treat renal cell carcinoma and Tikosyn treats arrhythmia. Pfizer allegedly used a third-party specialty pharmacy to direct patients to the foundation that would cover the copays of the patients. To enable the foundation to cover the copays, Pfizer would allegedly make donations to the foundation.

When Pfizer raised its prices of Tikosyn by over 40% in the last three months of 2015 it allegedly knew that the price increase would cause Medicare beneficiary copays to increase and some patients would not be able to afford the drug. To keep those patients on Tikosyn, Pfizer allegedly linked them to the foundation where the copay would be covered by the foundation and Pfizer would get paid the increased price of the drug by Medicare.

Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division said ““Kickbacks undermine the independence of physician and patient decision-making, and raise healthcare costs. 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.” The investigation was conducted by DOJ’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts in conjunction with various government agencies including HHS OIG, FBI, VA OIG, and U.S. Postal Inspection Service.

Tagged in: Anti-Kickback and Stark, FCA Federal, Healthcare Fraud, Pharma Fraud,