BOSTON (Reuters) – United Therapeutics Corp will pay $210 million to resolve U.S. claims that the drugmaker used a charity as a conduit to illegally cover Medicare patients’ out-of-pocket drug costs in order to eliminate price sensitivity and to boost sales.
The U.S. Attorney’s Office in Massachusetts on Wednesday announced the settlement, one of the first to emerge from an industry-wide investigation into pharmaceutical companies’ financial support of patient-assistance charities.
United Therapeutics, based in Silver Spring, Maryland, previously disclosed in July that it had set aside $210 million amid talks to resolve the investigation. It did not immediately respond to requests for comment.
Drug companies are prohibited from subsidizing co-payments for patients enrolled in government healthcare programs like Medicare. But companies may donate to non-profits providing co-pay assistance as long as they are independent.
Amid increased attention to rising drug prices in the United States, concern has arisen that donations from drugmakers to patient-assistance groups may be contributing to price inflation.
Wednesday’s settlement centered on donations that United Therapeutics made to Caring Voice Coalition, a Mechanicsville, Virginia-based foundation that says its aim is to improve the lives of patients with chronic illnesses.
The government alleged that from 2010 to 2014, United Therapeutics used the charity as a means to pay for the co-pay obligations of thousands of Medicare patients taking drugs including Adcirca, Remodulin, Tyvaso and Orenitram.
According to the settlement agreement, United Therapeutics routinely obtained data from the charity detailing how many patients on each drug received assistance and how much Caring Voice Coalition spent on those patients.
Reporting by Nate Raymond in Boston; Editing by Frances Kerry