United Therapeutics to Pay $210 Million over Medicare Fraud Involving “Charitable” Donations in Exchange for Drug Co-Payments

The Maryland-based pharmaceutical company United Therapeutics has agreed to pay $210 million to resolve allegations that it “used a foundation as a conduit to pay the copays of Medicare patients taking UT’s pulmonary arterial hypertension drugs, in violation of the False Claims Act,” according to a Department of Justice spokesperson.

United Therapeutics to Pay $210 Million over Medicare Fraud Involving “Charitable” Donations in Exchange for Drug Co-Payments

The settlement comes amid a large scope DOJ investigation into a culture of pharmaceutical company donations to patient-assistance charities, as a means to ultimately market their drugs to Medicare-covered individuals.

Although current regulations forbid pharma companies from subsidizing co-payments for Medicare patients, they are allowed to donate to independent non-profits that offer co-payment assistance to patients.

This creates a grey area that can be a fertile ground for misconduct.

As the prices of prescription medicine in the US keep rising, surpassing those of other developed countries, this type of donations are under scrutiny for potentially contributing to drug price inflation. The pharma giants currently on the DOJ’s radar include Johnson & Johnson and Pfizer, among others.

In the case of United Therapeutics, the problematic donations were made to Caring Voice Coalition, a foundation headquartered in Virginia, which assists patients suffering from chronic conditions.

For five years, the DOJ claims, United Therapeutics used Caring Voice to cover co-payments in connection with Medicare patients’ prescriptions of Adcirca, Remodulin, and other drugs used in the treatment of high pulmonary blood pressure. 

The DOJ found evidence that the company made decisions about how much to donate to Caring Voice after looking at lists of patients assisted by the charity who were receiving their manufactured drugs.

As a result of the investigation, the Office of the Inspector General rescinded the charity’s authorization, which had been granted over 15 years ago; a clear indication that they believe the charity was an active participant in the Medicare fraud scheme.

In other cases, where the business relation between the charity and the donor is not so clear-cut, it may become increasingly difficult to prove that there has been a violation of the Anti-Kickback Statute and the False Claims Act, as shown by a recent case.

According to the January 19th opinion by the Third Circuit in a whistleblower case against Medco Health Solutions, relators accusing companies of giving charitable donations in exchange for Medicare patient referrals must “point to at least one claim that covered a patient who was recommended or referred to [the defendant] by [the charities].” In that particular case, there was a summary judgment in favor of the defendant.

The DOJ, on the other hand, argued that the relator only needs “show a connection between the alleged kickbacks paid by [the defendant] to the charities and the claims [the defendant] submitted for federal beneficiaries.”

It will be interesting to see how courts will respond to the next batch of lawsuits against pharma companies that made inappropriate donations to charities that ultimately resulted in a boost for their profits.

Are you a pharmaceutical company insider with information on these dodgy donation schemes? We are working on several investigations and could use your help. Call 888.742.7248 or Connect online and you may be entitled to a substantial whistleblower reward.

Medicaid Fraud Hotline: 888.742.7248 or Report Online