BOSTON (Reuters) - United Therapeutics Corp will pay $210 million to resolve U.S. claims that the drugmaker used a charity as a conduit to illegally cover Medicare patients’ out-of-pocket drug costs in order to eliminate price sensitivity and to boost sales.
The U.S. Attorney’s Office in Massachusetts on Wednesday announced the settlement, one of the first to emerge from an industry-wide investigation into pharmaceutical companies’ financial support of patient-assistance charities.
Drug companies are prohibited from subsidizing co-payments for patients enrolled in the government healthcare program Medicare. But companies may donate to non-profits providing co-pay assistance as long as they are independent.
Amid increased attention to rising drug prices in the United States, concern has arisen that donations from drugmakers to patient-assistance groups may be contributing to price inflation.
More than a dozen other companies including Pfizer Inc , Johnson & Johnson, and Jazz Pharmaceuticals Plc have been subpoenaed for information related to their support of patient-assistance charities.
Wednesday’s settlement centered on donations that United Therapeutics made to Caring Voice Coalition, a Mechanicsville, Virginia-based foundation that says its aim is to improve the lives of patients with chronic illnesses.
The government said that from 2010 to 2014, United Therapeutics used the charity as a means to cover the co-pay obligations of thousands of Medicare patients taking drugs to treat high pulmonary blood pressure called Adcirca, Remodulin, Tyvaso and Orenitram.
According to the settlement agreement, United Therapeutics routinely obtained data from the charity about how many patients on United Therapeutics’ drugs it assisted, which the drugmaker used to decide how much to donate.
United Therapeutics, based in Silver Spring, Maryland, previously disclosed in July that it had set aside $210 million amid talks to resolve the investigation.
Andrew Fisher, a company spokesman, said United Therapeutics was glad to have the investigation behind it so that it could return its focus on developing life-saving treatments.
The settlement came after the U.S. Department of Health and Human Services’ Office of Inspector General last month notified Caring Voice Coalition that it would rescind the charity’s 2006 authorization.
The decision stemmed from a finding that the charity allowed donors improper influence and provided one or more drugmakers data that could allow them to correlate their donations to the number of prescriptions it subsidized.
Caring Voice Coalition did not immediately respond to a request for comment. It has said it is evaluating options and will announce a decision about its future in January.
Reporting by Nate Raymond in Boston; Editing by Frances Kerry and Tom Brown