On May 4, 2021, the Department of Justice announced that Incyte Corporation has agreed to pay $12.6 million to resolve allegations that it violated the False Claims Act by paying kickbacks through a non-profit organization. The Department alleged that from 2011 to 2014, Incyte used an independent charitable foundation as a conduit to pay the copays of certain federal beneficiaries taking Incyte’s drug Jakafi, which was approved to treat myelofibrosis. Specifically, the government alleged that after Incyte established the donor fund, Incyte managers pressured the foundation to provide economic assistance to federal beneficiaries who were ineligible to receive such benefits because they did not have myelofibrosis. Additionally, an Incyte contractor helped the ineligible individuals to complete applications for enrollment in the assistance program. As a result, the government allegations indicate that Incyte caused false claims for Jakafi to be submitted to Medicare and TRICARE.
Pursuant to the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying, directly or indirectly, any remuneration to induce federal beneficiaries to purchase the company’s drugs. This settlement emphasizes the Department of Justice’s commitment to pursuing claims against drug manufacturers that attempt to disguise impermissible kickbacks as charitable donations through patient assistance funds.
Importantly, the Incyte settlement resolves claims brought by a qui tam whistleblower under the False Claims Act. The whistleblower in this case, a former compliance executive at Incyte, will receive approximately $3.59 million of the government’s recovery.
As demonstrated by the Incyte settlement, stakeholders in the healthcare industry must remain aware of the possibility that employees and business partners can serve as whistleblowers who may not only report noncompliant conduct, but are incentivized to do so based on the whistleblower’s ability to receive a portion of the government’s recovery. Moreover, this source of exposure reinforces the need for comprehensive regulatory review of manufacturer-sponsored patient assistance program protocols.
How Frier Levitt Can Help
Frier Levitt’s team of healthcare attorneys has extensive experience guiding clients in developing compliant relationships, and avoiding common pitfalls that expose individuals and entities to the risk of significant civil and criminal penalties. Whether you are a manufacturer, pharmacy, or potential whistleblower, contact us to discuss the permissibility of patient assistance models affecting your business.
