United Therapeutics in Settlement Talks With Justice Department -- Update
July 27 2017 - 2:27PM
Dow Jones News
By Peter Loftus
Drugmaker United Therapeutics said Thursday it has set aside
$210 million for a possible settlement of a U.S. Justice Department
investigation of whether the company's contributions to
patient-assistance charity groups violate federal laws against
kickbacks and false claims.
United Therapeutics, a Silver Spring, Md., maker of drugs to
treat pulmonary arterial hypertension, is in settlement talks with
the Justice Department to resolve the investigation, the company
said in a filing with the Securities and Exchange Commission. The
company said it believes it could successfully defend itself
against any action the Justice Department might bring.
United Therapeutics is one of at least nine drug companies being
investigated by the Justice Department over their contributions to
nonprofit groups that help patients pay their out-of-pocket costs
for drugs, including patients in the federal Medicare program for
the elderly, according to companies' regulatory filings. Others
receiving subpoenas in the probe since 2015 include Johnson &
Johnson, Pfizer Inc. and Biogen Inc. The companies have said they
are cooperating with the investigations.
United Therapeutics, which had revenue of $1.6 billion last
year, is the first of the companies to disclose a potential
settlement. The company's SEC filing said any settlement may
include a corporate-integrity agreement with the federal
government, a pact that typically requires companies to adhere to
certain business practices for several years.
The company said it received a subpoena from the Justice
Department in May 2016 seeking documents about its support of
nonprofit organizations that provide financial assistance to
patients taking its medicines. The company hasn't identified the
organizations.
A United Therapeutics spokesman declined to comment beyond what
the company disclosed in its SEC filing and its second-quarter
earnings press release.
A Justice Department spokeswoman declined to comment.
Nonprofit organizations, sometimes centered around a specific
disease, provide financial assistance to reduce patients'
out-of-pocket costs, and drug companies have donated to the
charities.
This has triggered scrutiny by the federal government because
patients covered by federal health-insurance programs such as
Medicare have received the assistance. The federal anti-kickback
law prohibits companies from making payments intended to induce the
use of a drug or medical product that is reimbursed by federal
health programs.
The Office of Inspector General of the U.S. Department of Health
and Human Services in 2014 issued a bulletin saying that if a
company's donation to a patient-assistance charity is intended
specifically to induce the charity to pay for patients' use of the
company's drugs, it could be a violation of the anti-kickback
law.
The OIG said drug companies' donations to charities can be
appropriate if the charity is sufficiently independent in deciding
which patients receive the financial help, or how much.
But the OIG said it had concerns that companies were supporting
charities for patients with narrowly defined diseases, so that the
charities were primarily supporting payments for the donor
companies' products.
The heightened scrutiny of patient-assistance charities has hit
some drugmakers' sales, as manufacturers have reduced donations to
the charities and instead given away certain medicines free.
United Therapeutics said Thursday it reduced its grants to
nonprofit patient-assistance programs by $32 million during the
first six months of 2017. The company didn't say why it decreased
the grants.
United Therapeutics markets four drugs that treat pulmonary
arterial hypertension, which is high blood pressure in arteries
feeding the lungs. Sales of its biggest drug, Remodulin, dropped 1%
to $157.7 million for the second quarter.
Write to Peter Loftus at peter.loftus@wsj.com
(END) Dow Jones Newswires
July 27, 2017 14:12 ET (18:12 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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