The U.S. Attorney’s Office announced that the French-owened drug manufacturing company, Sanofi-Aventis U.S., LLC was charged with violating The False Claims Act on Friday of last week. Sanofi was manipulating a non-profit organization, The Assistance Fund (TAF) in a Medicare kickback scheme. They used TAF to funnel money to Medicare patients using their multiple sclerosis drug called Lemtrada that can cost up to $100,000 a year per patient.
What did Sanofi do?
“Sanofi sought to undermine the Medicare program through its use of kickbacks disguised as routine charitable donations aimed at helping patients battling multiple sclerosis and who were struggling with costly copays,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.
“They rigged the system so those taking its drug Lemtrada gained an unfair advantage over patients using other medications, and with today’s settlement, they are finally being held accountable for their actions.”
The United States further alleged that Sanofi made payments to TAF not with a charitable purpose, but rather with the intention of using TAF as a conduit to pay the financial obligations, including Medicare co-pay obligations, of patients taking Lemtrada, and that Sanofi’s payment through TAF of Medicare co-pays for Lemtrada violated the Anti-Kickback Statute.
What is the Anti-Kickback Statute (AKS)?
The Office of Inspector General defines the AKS as “A criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal healthcare programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies”.
In some industries, it is acceptable to reward those who refer business to you. However, in the Federal healthcare programs, paying for referrals is a crime.
What is The False Claims Act (FCA)?
The False Claims Act is a federal law that makes it a criminal for any person or organization to knowingly make a false record or file a false claim regarding any federal healthcare program. This includes any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government or any state healthcare system.
Examples of false claims: billing for services not provided, billing for the same service more than once, or making false statements to obtain payment for services.
Sanofi set to pay $11.85 million
The drug manufacturing company has agreed to pay $11.85 million in fines to settle said allegations of violating the anti-kickback laws.
“This office will continue to pursue drug companies for violations of the anti-kickback laws. We commend Sanofi for swiftly resolving the government’s allegations,” said United States Attorney, Andrew E. Lelling.
In addition to paying $11.85 million, Sanofi agreed to a corporate integrity agreement with the Department of Health and Human Services, Office of the Inspector General, that monitors arrangements the company makes with third-party patient assistance programs as well as reviews and compliance certification by independent review organization to prevent any further issues.