On December 21, the Department of Justice (DOJ) announced Ultragenyx Pharmaceutical Inc. reached a $6 million settlement to resolve allegations of violating the False Claims Act. The pharmaceutical company, based in California and specializing in rare disorders, faced accusations of submitting false claims to Medicare and Medicaid by providing kickbacks to beneficiaries and a laboratory.
Ultragenyx manufactures Crysvita, an FDA-approved drug for treating X-linked hypophosphatemia (XLH) in both adults and pediatric patients. XLH is a rare, inherited disorder that is often definitively diagnosed via genetic testing. Ultragenyx initiated a program with a genetic testing laboratory where the company covered the costs of genetic tests, provided results to healthcare providers (HCPs), and utilized the data for marketing purposes.
The DOJ alleged that Ultragenyx’s actions constituted kickbacks, involving the provision of free genetic tests to beneficiaries that purportedly influenced the purchase of Crysvita. Additionally, the company made separate payments to the laboratory for test result information, which was then used for marketing purposes to target HCPs with potential Crysvita patients.
The allegations resolved by the settlement agreement were, in part, originally brought in a case filed under the whistleblower, or qui tam, provision of the False Claims Act. The False Claims Act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government did, in part, in this case. Of the settlement amount, approximately $5.8 million will contribute to Medicare and the federal share of Medicaid, with an additional $200,000 allocated for State Medicaid programs. The whistleblower stands to receive around $1.07 million from the federal portion of the recovery.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations and false claims allegations. If you need assistance with such a matter, please contact us today.