The “Charity” Copay Funds That Were Really Kickbacks: $122.6M

Three drugmakers allegedly used foundations they funded and steered as conduits to pay patients’ copays for their own drugs — defeating the cost check Congress built into Medicare and CHAMPVA. CHAMPVA is named in the allegations.

DOJ alleged each company violated the Anti-Kickback Statute by using purportedly independent foundations as conduits to pay patients’ copays for its own drugs — defeating the copay "check on health care costs" Congress built into Medicare and CHAMPVA.

Jazz was the sole donor to a "Narcolepsy Fund" that almost exclusively paid copays for its drug Xyrem — whose price Jazz raised over 150 percent from 2011 — and barred Medicare patients from its free-drug program so claims would be billed instead. Lundbeck allegedly did the same for Xenazine, including off-label uses billed to Medicare and CHAMPVA. Alexion allegedly tied foundation aid for its roughly $500,000-a-year drug Soliris to patients staying on Soliris.

CHAMPVA is expressly named in the allegations; no CHAMPVA-only dollar split is stated. Settlements of allegations; no determination of liability.

"Pharmaceutical companies undercut a key safeguard against rising drug costs"
— U.S. Department of Justice, Office of Public Affairs (archive)

Source: U.S. Department of Justice, Office of Public Affairs (archive). Case file in the VA Fraud case files — part of the VA Fraud record. Cases are published as the courts decided them; amounts are stated as the Justice Department states them (billed, stolen, or ordered in restitution, as labeled).