The US Attorney for the District of Massachusetts announced on Wednesday that the government filed a civil complaint against Regeneron Pharmaceuticals, alleging that the drugmaker paid $35 million in kickbacks for Eylea (aflibercept), using a foundation as a conduit to cover co-pays for the VEGF inhibitor. US Attorney Andrew Lelling remarked that “according to the allegations…Regeneron funnelled tens of millions of dollars in kickbacks through a third-party foundation to ensure that few Medicare patients paid a co-pay on Eylea and that physicians who prescribed and purchased the drug did not have to collect Medicare co-pays from their patients.”
The complaint alleges that, in 2012, soon after the FDA approval of Eylea for the treatment of patients with the neovascular form of age-related macular degeneration (AMD), Regeneron considered how much to pay the Chronic Disease Fund (CDF), which covered Medicare co-pays for patients taking macular degeneration drugs. From 2013 to early 2014, Regeneron allegedly paid the foundation exactly what it said it needed to cover Medicare expenses for Eylea patients only.
Integral to driving sales
According to the complaint, the patient assistance program was integral to driving sales of Eylea, because it made the product more affordable than Roche’s Avastin (bevacizumab). While Eylea costs $1850 per dose, and Roche’s similar AMD therapy Luncetis (ranibizumab) $2000 per dose, Avastin is much cheaper at $55 per dose. However, the lawsuit noted that Avastin actually became more expensive to patients, because the CDF provided help only to those who were prescribed Lucentis or Eylea.
“Regeneron’s payments to CDF were not charity; rather, the company intended those payments to subsidise Eylea’s high price for Medicare patients,” the lawsuit said, claiming that executives at Regeneron closely monitored how much of the donated money would go toward payments for Eylea and not towards Lucentis.
Regeneron to defend allegations
In response to the news, Regeneron said there is no merit to the complaint, with the company’s general counsel Joseph LaRosa noting that “we believe our actions are legal and have helped preserve and restore the vision of elderly patients.” LaRosa explained that the “donations to independent charity foundations help elderly patients access medicines that are prescribed by their physicians,” adding “we look forward to having our case heard and will file a motion to dismiss.”
In 2017, Regeneron disclosed it was among a large number of companies that received subpoenas in connection with a US government inquiry related to charitable organisations that provide financial assistance to patients. Regeneron said on Wednesday that it has not settled the case because it did not engage in illegal or wrongful conduct.
Last month, Regeneron reported that sales of Eylea, which along with wet AMD is also approved to treat macular oedema following retinal vein occlusion, diabetic macular oedema and diabetic retinopathy, generated sales of $1.2 billion in the first quarter, up 9% year-on-year.