Department of Justice files False Claims Act complaint against Regeneron Pharmaceuticals for Medicare reimbursement rates fraud

Department of Justice files False Claims Act complaint against Regeneron Pharmaceuticals for Medicare reimbursement fraud

The Department of Justice has filed a False Claims Act complaint against Regeneron Pharmaceuticals, a New York-based pharmaceutical company, over allegedly inflating Medicare reimbursement rates for Eylea, an injection therapy approved for retinal diseases.

Eylea, approved by the Food and Drug Administration to treat neovascular age-related macular degeneration, has been at the center of a controversy involving fraudulent practices by the pharmaceutical company.

The complaint alleges that Regeneron fraudulently inflated Medicare reimbursement rates for Eylea by knowingly submitting false average sales price reports to the Centers for Medicare and Medicaid Services that excluded certain price concessions. Specifically, the United States alleges that Regeneron failed to report price concessions in the form of credit card processing fees paid to specialty drug distributors to benefit its customers.

Acting U.S. Attorney Joshua S. Levy for the District of Massachusetts stated, “The government alleges that Regeneron manipulated Medicare’s drug pricing process, by knowingly failing to report its payment of credit card processing fees as price concessions to its customers. By doing so, Regeneron greatly inflated the costs of its drug to Medicare over many years and enhanced its revenues.”

The lawsuit, originally filed under the qui tam or whistleblower provisions of the FCA, highlights the significant impact of healthcare fraud on government programs. Settlements and judgments under the False Claims Act exceeded $2.68 billion in the fiscal year ending Sept. 30, 2023, with over $1.8 billion related to matters in the healthcare industry.

The recoveries in fiscal year 2023 reflect the DOJ’s focus on enforcement priorities, including fraud in pandemic relief programs and alleged violations of cybersecurity requirements in government contracts and grants. Healthcare fraud accounted for two-thirds of the recovered amount in 2023, emphasizing the importance of combating fraudulent practices in the industry.

As the case against Regeneron unfolds, it serves as a reminder of the ongoing efforts to hold pharmaceutical companies accountable for fraudulent practices that impact government healthcare programs and ultimately, taxpayers.