Ultragenyx Pharmaceutical, a company based in California, recently agreed to pay $6 million to settle allegations that it caused the submission of false claims to Medicare and Medicaid, particularly surrounding genetic tests for patients and purchasing test result information to induce prescriptions of its prescription drug, Crysvita.
Crysvita is an FDA-approved drug that is meant to treat a rare inherited disorder characterized by low phosphate levels in the blood, X-linked hypophosphatemia (XLH). XLH can result in soft, weak bones and often needs a genetic test for a definitive diagnosis as it can be confused with other disorders that present with similar symptoms.
Ultragenyx admitted that it understood than insurers – including Medicare and Medicaid – would sometimes require a positive genetic test for a genetic mutation consistent with XLH to pay for a patient’s Crysvita prescription. Alternatively, health care providers would sometimes require a positive genetic test to make the definitive XLH diagnosis before prescribing Crysvita. Therefore, Ultragenyx also admitted that it entered into an arrangement with an unnamed genetic testing laboratory, under which Ultragenyx agreed to pay the laboratory to conduct genetic tests at no costs to health care provider or to the patient. The test results were to be provided to the health care provider. This agreement was referred to by Ultragenyx as its “sponsored” XLH testing program and this program was discussed by company sales personnel with health care providers. Sales personnel would also deliver order forms for the tests directly to health care provider offices.
Additionally, in furtherance of the scheme, Ultragenyx acknowledged that it paid the laboratory for the test results, the name of the health care provider who ordered the test, a patient ID number (de-identified), and the date the test was ordered. Ultragenyx would use that information to find potential Crysvita patients and their health care providers to market to, and up until April 2022, would distribute the information to its sales force with instruction to make sales calls for Crysvita to health care providers who either ordered a test or had a patient with a positive test result. Sales professionals were also tasked with following up with health care providers regarding test results.
In April 2022, once Ultragenyx became aware of an HHS OIG Advisory Opinion that centered around a similar situation, the company stopped providing the results reports from the laboratory to its sales force and stopped using the reports for its marketing purposes. However, the company did not seem to concede that the original program was a violation of the law.
Ultragenyx agreed to pay $6 million to the United States and select Medicaid Participating States ($5,791,846.21 to the United States and $208,153.79 to the Medicaid Participating States), and separate settlements may be reached by other certain states for other Medicaid claims. The allegations were originally brought – at least in part – via a qui tam case, and the whistleblower will receive roughly $1.07 million from the federal portion of the settlement for their role in the action. Ultragenyx will also pay attorney fees and costs for the relator.
“Kickbacks, in whatever form, have no business in our federal healthcare system. We are always on the lookout for financial kickbacks that can improperly influence medical decisions, undermine patient care, and cause waste to federal healthcare programs,” said Acting United States Attorney Joshua S. Levy. “As medical practices evolve, our office is committed to ferreting out improper financial kickbacks of any permutation.”