On May 4, 2021, the United States Department of Justice announced a $12.6 million settlement with Incyte Corporation, resolving allegations that Incyte violated the False Claims Act by using a foundation as a conduit to pay Medicare and TRICARE patient copays for its drug, Jakafi.
Jakafi was approved to treat myelofibrosis – a bone marrow cancer – in 2011 and approved to treat other disorders after 2014. According to the Department of Justice, Incyte was the sole donor to a fund that was opened by a nonprofit foundation in November 2011 to assist only myelofibrosis patients. After the fund opened, from November 2011 through December 2014, Incyte allegedly used its influence as the sole donor to have the foundation pay copays of Medicare and TRICARE patients taking Jakafi but did not have myelofibrosis (thereby making them ineligible for fund assistance).
Incyte managers allegedly pressured the foundation, through phone calls and emails, to provide economic assistance to those ineligible patients. Taking it a step further, Incyte’s contractor allegedly helped those ineligible patients complete their applications and submit them to the fund. It was through this conduct that Incyte caused false claims for Jakafi to be submitted to Medicare and TRICARE.
Interestingly, in what may serve as a strong reminder to listen to your compliance team, this case was brought under the qui tam provisions of the False Claims Act by a former compliance executive at Incyte.
Incyte has denied any wrongdoing, releasing a statement saying, “This resolution simply reflects Incyte’s desire to put this matter behind it and to continue to prioritize the health and wellbeing of individuals with serious life-threatening conditions.” Incyte went on to say, “Incyte’s donations to non-profit foundations have served – and continue to serve – as a safety net for lower-income individuals living with potentially fatal blood cancers, regardless of whether they were prescribed Jakafi or another medication.”
“Pharmaceutical companies cannot skirt the anti-kickback rules by disguising their inducements to federally-insured patients as charitable donations,” said Acting United States Attorney Jennifer Arbittier Williams. “This resolution shows our office’s continuing commitment to holding drug companies accountable for this conduct.”
Brian J. McCormick, Jr., partner at Ross Feller Casey and attorney for the whistleblower said, “Pharmaceutical companies continue to use Third party foundations as a conduit for copays which lead to expensive prices for the drugs. Despite the recent settlements, the conduct appears to still be widespread. Enforcement continues to be necessary to prevent these kickbacks.”