Jazz, Lundbeck and Alexion Pay $122M to Settle Federal Kickback Claims

Three drugmakers have agreed to pay nearly $123 million to settle separate claims that they defrauded the government through an elaborate kickback scheme involving charitable foundations.

Jazz Pharmaceuticals, Lundbeck and Alexion Pharmaceuticals were facing charges from the U.S. Attorney’s Office in Boston that they had each provided money to nonprofit groups earmarked solely to cover the copays of their own drugs.

It was a back-door way of gouging Medicare and the Medicare and Civilian Health and Medical Program, prosecutors had alleged. None of the companies admitted fault.

Under the settlement, Jazz will pay $57 million to settle claims that it created a fund to cover copays of its anti-narcolepsy drug Xyrem (sodium oxybate) and its painkiller, Prialt (ziconotide). The company will also submit to a corporate integrity agreement with HHS for the next five years.

Lundbeck will pay $52.6 million and put itself under a five-year corporate integrity agreement to settle claims that it used a nonprofit foundation to earmark copayments for its anti-chorea drug Xenazine (tetrabenazine).

Alexion, for its part, will pay $13 million to settle claims that it used a foundation to cover copays of Soliris (eculizumab), which is used to treat paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome.