In a March 4 press release, the Department of Justice announced it had reached a settlement with Incyte Corporation resolving allegations that Incyte had violated the False Claims Act and Anti-Kickback Statute. DOJ alleged that, over a 3-year period, Incyte had used a foundation to unlawfully cover copays for patients prescribed its drug Jakafi. DOJ alleged that Incyte was the sole donor to a fund that was opened to assist only myleofibrosis patients. Incyte is alleged to have pressured the foundation to approve payments to cover copays for patients that were prescribed Jakafi to treat non-approved health conditions. Incyte is also alleged to have used a contractor to assist the ineligible patients in completing applications to the fund.
Under the Anti-Kickback Statute, companies are prohibited from providing anything of value to induce the use of drugs by beneficiaries of government-funded health plans. Copays were required by Congress in order to prevent drug and medical device companies from overpricing drugs and devices paid for by government-funded health plans. By covering copays, companies are potentially able to circumvent that check on the prices charged to the government.
This settlement is notable for two reasons. First, there was significant involvement from the Defense Criminal Investigative Service (CDIS). This lesser-known organization investigates allegations of fraud against the Department of Defense’s TRICARE program. There is no shortage of government agencies capable of investigating and bringing enforcement actions based on false claims submitted to the government. CDIS is part of a list that includes the DOJ, individual U.S. Attorney’s Offices, Offices of Inspectors General for Health and Human Services, the Department of Defense, and the United State Postal Service, and state attorneys general. And if all of those eyes do not adequately deter that fraud, this case includes another enforcement tool at the government’s disposal – a former executive at Incyte is slated to receive $3.59 million of the $12.6 million recovery as a reward for bringing the original qui tam complaint against Incyte. Health care fraud has been, and will continue to be, a focus of law enforcement agencies. This is one more example of that continued focus.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with False Claims Act investigations and qui tam litigation. If you need assistance with such a matter, please contact us today.