On September 9, 2021, Judge Nathaniel Gorton of the United States District Court for the District of Massachusetts ruled against Teva Pharmaceuticals USA and Teva Neuroscience, Inc. in a case where the companies are accused of using kickbacks paid through charitable foundations to boost sales of Copaxone, in violation of the Anti-Kickback Statute and resulting in false claims being submitted to Medicare.
In August 2020, the United States Department of Justice (DOJ) filed suit against Teva alleging that the company illegally paid two “independent” charitable foundations a total of $328 million from 2006 to 2015, to cover co-payments of Copaxone patients. During that same time period, the price of Copaxone quadrupled from roughly $17,000 per year to $73,326 per year.
According to the DOJ, Teva referred most Copaxone patients with Medicare copays to Advanced Care Scripts, Inc., which would then arrange coverage for co-payments from the charitable foundations, the Chronic Disease Fund and The Assistance Fund. The DOJ further alleged that Teva coordinated with the pharmacy to make sure its donations matched the amount needed to cover Copaxone patients’ co-payments, ensuring that all of the money would be used to subsidize sales of the drug, in violation of federal law. Advanced Care Scripts also allegedly reported to Teva how many Copaxone patients were receiving copay assistance from each foundation – information that Teva would use to determine its “donation” amount for the following year.
In Teva’s motion to dismiss, the company argued that it did not control what the foundations did with the money and that it had merely hoped and expected it would be used to pay for Copaxone.
However, Judge Gorton was not convinced and believed the scheme as outlined by the DOJ went beyond that.
In Judge Gorton’s Memorandum and Order denying Teva’s motion to dismiss, he notes that the “government has alleged, in sufficient detail, a scheme by which Teva practically guaranteed that its own donations would result in the submission of Medicare claims for Copaxone.” Gorton also dismissed Teva’s argument that the lawsuit attempts to restrict speech between the company and the foundations, in violation of the First Amendment by saying that the case was about conduct – not speech.
Advanced Care Scripts and the individual foundations have agreed to pay a combined $9.5 million to resolve related charges.