Health News

Jazz Pharmaceuticals to settle U.S. probe for $57 million

BOSTON (Reuters) - Jazz Pharmaceuticals Plc said on Tuesday it had agreed to pay $57 million to resolve a U.S. probe into its financial support of charities that offer assistance to Medicare patients seeking help to cover out-of-pocket drug costs.

The drugmaker said in a filing with the U.S. Securities and Exchange Commission that it reached an agreement in principle with the U.S. Justice Department to pay the sum as part of a civil settlement.

Jazz, which produces the expensive narcolepsy drug Xyrem, said in the filing it could not guarantee its efforts to reach a final settlement would be successful.

The drugmaker has a program aimed at ensuring its compliance with applicable legal and regulatory requirements for pharmaceutical companies, including requirements relating to support of organizations providing financial assistance to Medicare patients, Jazz told Reuters in an emailed statement.

The company is among more than a dozen pharmaceutical manufacturers that have disclosed receiving subpoenas seeking for information related to their support of patient-assistance charities.

Drug companies are prohibited from subsidizing co-payments for patients enrolled in the Medicare government healthcare program for the elderly. But companies may donate to nonprofits providing co-pay assistance as long as they are independent.

The U.S. Attorney’s Office in Massachusetts has been leading the industry-wide investigation.

In December, it announced a $210 million settlement with United Therapeutics Corp to resolve claims it used a charity as a conduit to illegally cover Medicare patients’ out-of-pocket costs in order to eliminate price sensitivity and boost sales.

Reporting by Nate Raymond in Boston; additional reporting by Kanishka Singh in Bengaluru Editing by Sandra Maler and Peter Cooney