Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Sanofi to pay $11.9 million to resolve U.S. drug charity kickback probe

Published 02/28/2020, 05:24 PM
Updated 02/28/2020, 05:24 PM
© Reuters. FILE PHOTO: A Sanofi sign outside the French drugmaker's Paris headquarters

© Reuters. FILE PHOTO: A Sanofi sign outside the French drugmaker's Paris headquarters

By Nate Raymond

BOSTON (Reuters) - Sanofi SA (PA:SASY) has agreed to pay $11.85 million to resolve U.S. allegations that it used a charity that helps cover Medicare patients' out-of-pocket drug costs as a means to pay them kickbacks to use a high-priced multiple sclerosis drug.

The deal, announced by the U.S. Justice Department on Friday, was the latest to result from an industry-wide probe of drugmakers' financial support of patient assistance charities that has resulted in more than $865 million in settlements.

The government said Sanofi provided payments to one such charity, The Assistance Fund, not with a charitable purpose in mind but instead to use it as a means to cover the co-pay obligations of Medicare patients using the MS drug Lemtrada.

TAF like other charities in the probe provide assistance to patients seeking to pay out-of-pocket costs for medications. Sanofi, whose drug costs nearly $100,000 per year per patient, made payments to the charity from 2015 to 2016, the department said.

"Sanofi used a supposed charity as a conduit to funnel money to patients taking Sanofi’s very expensive drug, all at the expense of the Medicare program," U.S. Attorney Andrew Lelling in Boston said in a statement.

Sanofi did not admit wrongdoing as part of the settlement. The drugmaker in a statement defended the practice of providing financial support to such charitable organizations, saying it "believes these programs help patients lead healthier lives."

Drug companies are prohibited from subsidizing co-payments for patients enrolled in the government’s Medicare healthcare program for those aged 65 and older. Companies may donate to non-profits providing co-pay assistance as long as they are independent.

But the government has alleged that various drugmakers have used charities like Orlando, Florida-based TAF as means to improperly pay the co-pay obligations of Medicare patients using their drugs, in violation of the Anti-Kickback Statute.

The investigation, led by the U.S. attorney’s office in Boston, came amid growing attention to soaring U.S. drug prices. Co-pays are partly meant to serve as a check on healthcare expenses by exposing patients to some of a medicine’s cost.

© Reuters. FILE PHOTO: A Sanofi sign outside the French drugmaker's Paris headquarters

TAF did not immediately respond to a request for comment on Friday. It reached a separate $4 million settlement with the government in November resolving similar allegations involving three other pharmaceutical companies.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.