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Did a pharmaceutical company use charity to hide kickbacks?

Federal prosecutors have accused a pharmaceutical company, Regeneron Pharmaceuticals, Inc, of using charitable organizations to funnel illegal kickback payments to doctors. The allegations are connected to the use of an injectable drug used to treat macular degeneration. The company funded a charitable organization, the Chronic Disease Fund, to help cover Medicare patients’ co-pays for this expensive medication.

Beyond patient assistance, did a focus on one medication lead to illegal conduct?

The government claims this charitable organization is a guise to hide illegal kickbacks given solely for the purpose of encouraging the use of their drug instead of a generic version of the medication. To make the allegations even worse, the government states senior management was fully aware the practice was a violation of the anti-kickback statute. As a result, the Department of Health and Human Services (HHS) has filed suite against the pharmaceutical manufacturer for anti-kickback statute and federal claims act violations.

The government is seeking monetary damages plus interest and expenses as well as any other relief the court may deem proper.

Signaling a trend, will the government pursue more of these cases?

This is the not the first time a medical company has faced allegations of wrongdoing tied to its relationship with charitable organizations. As noted in a recent report by The New York Times, the federal government has also settled similar allegations with Johnson & Johnson for $360 million in 2018 and United Therapeutics for $210 million in 2017. This case is still moving through the legal process. We will provide updates as they become available.

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