United Therapeutics: Patient Assistance That Kept Medicare Paying

In the United Therapeutics copay settlement, the company agreed to pay $210 million to resolve allegations of copay charity kickbacks involving thousands of Medicare patients taking its pulmonary arterial hypertension drugs. The government alleged that United Therapeutics kept financially needy Medicare patients out of its free-drug program and referred them to a foundation instead. The foundation covered their copays. Medicare got the claims for the drugs. Taxpayers paid for prescriptions the company could have supplied through its free-drug program.

The Justice Department announced the civil settlement on December 20, 2017. Its account connects the patient-assistance decision to another decision inside the manufacturer: how much money to give the foundation. According to the government, United Therapeutics used reports showing assistance for its own products to decide its donations. That connection matters to anyone who has worked on an assistance program’s eligibility rules, funding requests or reports back to a donor.

The PAH Drugs and the Medicare Copay

United Therapeutics sold Adcirca, Remodulin, Tyvaso and Orenitram for pulmonary arterial hypertension. The government alleged that the company used a purportedly independent charitable foundation to pay Medicare patients’ copays.

Medicare Part B and Part D can leave a patient responsible for a copayment, coinsurance or deductible. The Justice Department explained that Congress included those payments partly to keep market pressure on drug prices. The Anti-Kickback Statute prohibits manufacturers from paying patients, directly or indirectly, to induce purchases of their drugs covered by Medicare. Here, the alleged pharmaceutical kickback reached the patient through a charity.

The USC Schaeffer Center’s 2020 paper The Association Between Drug Rebates and List Prices found that higher rebates were associated with higher list prices across the branded drugs it studied. It also explained who can remain exposed to the list price:

Covering the Medicare patient’s share removes the immediate cost obstacle to a prescription without reducing the price charged for the drug.

The Free-Drug Policy Kept a Medicare Payment in the Transaction

United Therapeutics allegedly excluded Medicare patients from its free-drug program even when they could not afford their copays. Other financially needy patients could participate. The government said the company instead referred Medicare patients prescribed its PAH drugs to the foundation to generate Medicare revenue and induce purchases.

The economics explain why that eligibility rule mattered. Giving away a drug produces no sales revenue. Funding a patient’s copay through a foundation leaves a Medicare payment attached to the prescription. Both routes put medicine in the patient’s hands, but only the latter keeps the government paying for the sale. In the government’s account, patient assistance served a sales purpose.

The allegation joined those decisions together: who could receive free medicine, who went to the foundation, and which prescriptions then generated claims. An employee who knows why a Medicare patient was directed away from free drug may know the decision that made the government payment possible.

A whistleblower’s complaint against Incyte describes the same incentive for Jakafi patients:

The complaint also alleged that Incyte received foundation data confirming assistance for Jakafi patients. The free-drug decision and the data coming back from a foundation belong together. One determines the patient’s route. The other tells the manufacturer whether its money supported its own prescriptions.

Foundation Reports Fed the Donation Decision

From February 2010 through January 2014, United Therapeutics allegedly obtained routine foundation reports showing how many patients on each of its PAH drugs received assistance and how much the foundation spent on them. The government alleged that the company used those figures to decide how much to donate.

The reports connected charitable spending to individual products. Patient counts and amounts spent showed the manufacturer how much assistance went to people taking its own drugs.

For a market-access or finance employee, the important connection is between the report and the funding decision. The product-level assistance data can explain why that amount was chosen. Read together with the patient’s referral and the resulting Medicare claim, those records can show the commercial logic behind a charitable payment.

What a Specialty Pharmacy Could Add to the Loop

A separate case involving Advanced Care Scripts shows how a specialty pharmacy could connect foundation funding to a manufacturer’s patients. In the Justice Department’s August 13, 2020 announcement, the pharmacy acknowledged relaying data from foundations to Teva so Teva could correlate its payments with foundation spending on Copaxone patients.

When the funds stopped accepting new applications, Advanced Care Scripts supplied updates on eligible Medicare Part D patients waiting for Copaxone assistance. At least one employee understood that Teva would use the waiting-patient count to help set its next payment.

Once a fund reopened, the pharmacy promptly sent a batch file consisting almost entirely of Copaxone patients’ applications.

The pharmacy’s account shows the view from an intermediary: the funding decision and the patient applications can sit in different organizations, while the communications between them show how they fit together. Someone working on reimbursement support may see a part of the arrangement that never appears on the manufacturer’s donation ledger.

The Settlement Required Controls Over Patient Assistance

United Therapeutics entered a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. As described in the settlement announcement, the agreement required measures governing arrangements and interactions with third-party patient-assistance programs, reviews by an independent organization, and compliance certifications from company executives and board members.

The controls addressed the same relationship as the allegations: the company’s dealings with assistance programs receiving its donations. The Inspector General said the monitoring was designed to promote real independence between United Therapeutics and those programs.

The settlement paired a substantial civil payment with oversight of those interactions, reaching into the decisions behind the checks.

What Patient-Assistance Employees Can Recognize

The United Therapeutics case connects a free-drug eligibility policy, a foundation referral, product-specific reports and a donation decision to prescriptions billed to Medicare. Different employees may see different parts of that sequence. A patient-assistance employee may know how eligibility was decided. A foundation contact may know what reports went back to the donor. Someone approving funding may know which patient counts or spending figures supported the request.

The value of that knowledge is the connection between the records. Our experts help pharmaceutical whistleblowers turn that knowledge into a case, judging how the funding decisions connect to Medicare claims. Your account of why a rule changed or why a particular report was requested can help explain records that look routine when read alone.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Patient Went to the Foundation

If you saw Medicare patients steered away from free medicine or donations sized to assistance for particular drugs, speak to one of our whistleblower experts about why the patient went to the foundation. We build your strongest pharmaceutical kickback whistleblower case with you, bring in whistleblower lawyers who understand patient-assistance arrangements, and stay beside you throughout the case.