Biogen used charitable donations to illegally boost sales of multiple sclerosis drugs, Humana lawsuit says
For years, federal prosecutors have sued drug companies for allegedly using charitable contributions as a means of boosting sales. Biogen was among the pharmaceutical players to sign a federal settlement, but now insurance giant Humana is targeting the company’s charitable giving with a new lawsuit.
In a complaint filed in Massachusetts on Friday, Humana said Biogen had sought to increase sales of multiple sclerosis drugs Tysabri, Avonex and Tecfidera by “inoculating” patients with free samples of the drugs and then “sweeping them up. “in Medicare and other government insurance programs through its charitable giving.
To do this, Humana says Biogen illegally paid patient co-payments “under the guise of unrestricted charitable donations.” The insurer says Biogen has worked with specialty pharmacy Advanced Care Scripts, as well as with the Chronic Disease Fund and the “Essentially Charitable Foundations” Assistance Fund, to ensure that Biogen’s donations would increase its sales.
Because Biogen’s multiple sclerosis drugs cost between $ 50,000 and $ 80,000 per year, copayments can run into the thousands of dollars per patient, says Humana. These co-payments represent a “tiny fraction” of the total cost, which means that drug companies can “earn a significant return” by paying these co-payments. Humana says she spent more than $ 2.3 billion on Biogen’s MS drugs between 2011 and 2019, and is seeking to “recoup the … overpayments.”
“Biogen paid the foundations with the intention and understanding that they would use Biogen’s money specifically to cover the co-pay of patients taking Biogen’s MS drugs,” Humana said in the lawsuit. “In doing so, Biogen wanted patients taking MS drugs – but not insurers – to avoid the high prices charged for the drug.”
A representative for Biogen said the company is not commenting on the pending litigation.
RELATED: Biogen Signs $ 22 Million Charity Bribes With Federal Government, But Says His Conduct Was Appropriate
The federal government has said it is illegal for drug makers to pay Medicare patient copayments, and has targeted many leading industry players with its own lawsuits in recent years. For its part, Biogen agreed to settle similar allegations from federal prosecutors late last year for $ 22 million.
After Biogen concluded the deal, a spokesperson said the company “disagreed with the government’s view on the facts and believed its conduct was appropriate.”
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Meanwhile, the charities at the center of Humana’s trial, the Chronic Disease Fund and the Relief Fund, signed federal settlements worth $ 4 million and $ 2 million, respectively. Advanced Care Scripts, the specialty pharmacy, also agreed to a $ 1.4 million settlement with the federal government.
Aside from Biogen, Humana has filed similar lawsuits against Teva and Regeneron, according to reports.