The United States government announced on August 18, 2020 that it has filed a False Claims Act complaint against Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. (“Teva”), alleging that they illegally paid the Medicare co-pays for their multiple sclerosis (“MS”) drug,  Copaxone, through purportedly independent foundations that the companies used as conduits in violation of the Anti-Kickback Statute.

The U.S. government alleges that Teva paid The Assistance Fund (“TAF”) and Chronic Disease Fund (“CDF”) with the intent and understanding that the foundations would use Teva’s money to cover the Medicare co-pays of patients taking Copaxone, from 2007 through 2015. Teva raised the price of Copaxone from approximately $17,000 per year to over $73,000 per year over the same period.

When a Medicare beneficiary obtains a prescription drug covered by Medicare Part D, the beneficiary may be required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (“co-pays”). These co-pay obligations may be substantial for expensive medications. Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration (which includes money or any other thing of value) to induce Medicare patients to purchase the companies’ drugs.

The government’s complaint contends that Teva largely effectuated its scheme through its vendor, Advanced Care Scripts Inc. (“ACS”), a specialty pharmacy to which Teva referred virtually all Copaxone patients who faced Medicare co-pays for the drug.  Teva used information from ACS and from TAF and CDF to calculate how much money to pay each foundation to maintain coverage of the Medicare co-pays of Copaxone patients enrolled in each foundation.  The government further contends that ACS coordinated with Teva the referral of newly-prescribed Copaxone patients to TAF and CDF, referring patients in batches at the same time that Teva made payments to the foundations, which ensured that Copaxone patients received the vast majority of the co-pay assistance TAF and CDF provided with money from Teva.

In announcing the filing of the complaint against Teva, the United States Attorney for the District of Massachusetts stated, “The government’s complaint today alleges that Teva used ostensibly independent charitable foundations as vehicles to pay hundreds of millions of dollars in kickbacks, all while raising the price of its drug, Copaxone, at a rate over 19 times the rate of inflation. Teva’s alleged kickbacks undermined the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices.”

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If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.

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