Justice Department Charges Regeneron With Pricing Fraud

Published 12 months ago12m ago • Bookmarks: 220

April 12, 2024

By Barrett Seaman—

The U.S. Department of Justice this week filed a False Claim complaint against Tarrytown-based Regeneron Pharmaceuticals, claiming that the $13 billion company fraudulently inflated Medicare reimbursements for Eylea, a drug used to treat wet age-related macular degeneration.

According to the Justice Department complaint, filed by the Fraud Section of its Commercial Litigation Branch through the U.S. Attorney’s Office in Boston, the company inflated Medicare reimbursements for Eylea prescriptions by failing to inform Medicare of price concessions made to drug distributors as compensation for credit card processing fees.

Support our Sponsors

Prescriptions for Eylea, according to the government, generated more than $25 billion in Medicare reimbursements between 2012 and 2023. The discrepancy “cost the Medicare system hundreds of millions of dollars,” said Joshua S. Levy, Acting U.S. Attorney for the District of Massachusetts.

The investigation of these claims has been ongoing since 2021. It stems from a “whistleblower” charge filed by three Regeneron employees in 2020, alleging that the payment scheme amounted to kickbacks to distributors. If the government wins its case, Regeneron may be liable for three times the value of Medicare’s losses, and the whistleblowers may get a share of the recovery.

Daren Kwok, Regeneron’s Executive Director, Corporate Affairs, described the allegations as “without merit.” The reimbursements, Kwok wrote in a statement, were part of Regeneron’s “lawful reimbursement of costs incurred by our specialty distributors.”

“The Government’s complaint, the statement continued, “demonstrates a fundamental misunderstanding of drug price reporting standards. Regeneron has fully cooperated with the Government’s investigation and will vigorously defend itself in court.”

Read or leave a comment on this story...

Support our Sponsors