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United Therapeutics to Pay $210 Million to Resolve False Claims From Paying of Beneficiary’s Copays

January 10th, 2018

Pharmaceutical company United Therapeutics (UT) has agreed to pay $210 million for False Claims Act (FCA) and Anti-Kickback Statute (AKS) claims against it. The government alleged that UT used a foundation as a conduit to pay the copays of Medicare patients taking UT drugs.

The government alleged that UT illegally subsidized the cost of prescription drugs covered by Medicare Part B or Part D, violating the AKS by offering or paying, directly or indirectly, any remuneration to induce Medicare patients to purchase the company’s medication. It is alleged that UT established a tax-exempt 501(c)(3) entity, the “foundation,” that they then donated money to and used to pay the copays for their drugs for Medicare patients, inducing patients to purchase UT’s drugs. The Department of Justice (DOJ) said that the purpose of copays is to encourage market forces to serve as a check on healthcare costs. Instead of referring needy patients to a free drug program that UT maintained, the DOJ alleged that UT diverted needy patients to the foundation to allow claims to be submitted to Medicare.

UT established a corporate integrity agreement with the Department of Health and Human Services and will ensure that all third-party payment arrangements comply with federal law.

“UT used a third party to do exactly what it knew it could not lawfully do itself . . . UT’s payments to the foundation were not charity for PAH [Pulmonary Arterial Hypertension – the disease treated by UT drugs] patients generally, but rather were a way to funnel money to patients taking UT drugs,” Acting U.S. Attorney William Weinreb said in a statement.

At press time, no comment regarding this settlement was available on UT’s website. The DOJ website points out that the settlement is not an admission of fault by UT.