Incyte: Alleged Pressure to Fund Ineligible Patients

In the Incyte Jakafi copay settlement, Incyte Corporation agreed to pay $12.6 million over allegations that it used a foundation to pay federal beneficiaries’ copays and pressured it to fund ineligible patients. The alleged pressure came through managers’ phone calls and emails. For someone working in patient assistance, those conversations go to the heart of the case: who decided which patients received help, and whose interests that decision served.

The Department of Justice announced the civil settlement on May 4, 2021. The government alleged that Incyte was the sole donor to the fund used to pay certain federal beneficiaries’ Jakafi copays from November 2011 through December 2014. The fund opened in November 2011 to assist only patients with myelofibrosis, the disease Jakafi was approved that year to treat, and the government alleged that Incyte used it to pay the copays of Jakafi patients who did not have myelofibrosis, causing false claims to Medicare and TRICARE. A former Incyte compliance executive brought the qui tam case.

This pharmaceutical fraud case turns on a business decision inside an assistance program. The whistleblower alleged that Incyte moved some patients who might qualify for free Jakafi toward foundations that paid their Medicare copays. In that account, the patient still received the drug. Medicare received a bill.

From Free Jakafi to Medicare-Paid Prescriptions

The complaint describes an alleged effort to generate revenue by changing how some patients obtained Jakafi. Patients who might have met the financial qualifications for free medicine were instead directed toward foundation assistance, according to the whistleblower:

That is the financial appeal of copay charity kickbacks. Supplying a drug free produces no prescription revenue for the manufacturer. Paying the patient’s share through a foundation can produce a prescription billed to Medicare, with revenue flowing back to the drug company.

An assistance decision can determine whether the manufacturer supplies the product at its own expense or sells it through a prescription supported by government money. Under the alleged arrangement, taxpayers paid for prescriptions that Incyte might otherwise have supplied free.

For an insider, the useful knowledge is why a patient took one assistance route rather than another. We connect that account to the assistance records and the resulting claims.

Managers Allegedly Pressed the Fund to Assist Ineligible Patients

The government alleged that Incyte managers used phone calls and emails to pressure the foundation to provide economic assistance to patients who were ineligible. It also alleged that Incyte’s contractor helped ineligible patients complete the applications submitted to the fund. With Incyte as the fund’s sole donor, the allegation places the manufacturer on both sides of the funding decision: providing the money and pressing for particular recipients.

The free-drug allegation concerns patients who might have qualified for medicine supplied without charge. The manager-pressure allegation concerns patients who did not qualify for foundation assistance. The government alleged that managers pressed the foundation to pay anyway.

A donation total shows what the company gave. The managers’ alleged calls and emails show what it wanted in return: help for patients the fund’s rules excluded.

A nearby example is Lundbeck. In its Xenazine copay settlement, the government alleged that Lundbeck referred patients with other conditions to a foundation’s Huntington’s Disease fund. When the foundation stopped paying those copays, Lundbeck allegedly agreed to repurpose earlier donations to a general fund.

The alleged methods differed. Incyte’s managers allegedly pressed for help for ineligible patients. Lundbeck allegedly changed where earlier donations could be used after a fund stopped paying. Both accounts put the manufacturer inside the assistance decision.

Foundation Reports Allegedly Came Back to the Donor

The whistleblower alleged that Incyte received data confirming that foundations had paid Jakafi patients’ Medicare copays. The complaint describes information returning to the company after it made contributions:

The donor allegedly got an answer to a question with a commercial payoff: had the foundation paid for patients taking its drug? The complaint connects the money going out with information about the prescriptions it supported.

For a funding or compliance employee, the content of a foundation report can be as revealing as the donation approval. We examine what the report told the manufacturer about its product, who received that information and how it connected to funding decisions. The complaint’s allegation makes the practical question specific: what could Incyte learn about Jakafi copays from the foundations it supported?

What Evidence Is Needed to Prove Fraud?

Incyte’s case points to manager communications, decisions about free medicine and foundation reports confirming whose copays were paid. Connecting them to the prescriptions and government payments is the work we do with you.

The whistleblower’s former compliance role matters because the alleged conduct crossed the boundary between company funding and foundation decisions. A patient-assistance employee may know how a referral was handled. A manager may know why an exception was requested. A compliance employee may understand how the company’s stated rules compared with the communications and reports reaching it.

A donation record shows money leaving the manufacturer. A communication can explain the result a manager wanted. A foundation report can identify the assistance the company learned had been provided. We work with the insider to connect those pieces to the prescription and the government payment.

The pharmaceutical whistleblower’s contribution is the business meaning behind the documents. Someone who understands the assistance operation can explain why a particular request mattered and what a report told the people receiving it.

Why the Foundation’s Independence Matters

The Department of Health and Human Services Office of Inspector General’s patient-assistance guidance puts the foundation’s independence at the center of the arrangement. Its 2005 bulletin described assistance decisions free of donor control, based on a consistent measure of financial need and made without regard to the donor’s interests or the patient’s choice of product. It also addressed data that would let a manufacturer connect its donations to subsidized prescriptions for its drugs. The bulletin warned about disease funds defined so narrowly that they effectively subsidized only one or a few donor products.

Those principles bear directly on the alleged Incyte conduct. Manager pressure concerns who controlled the assistance decision. The complaint’s account of foundation reports concerns what the donor learned about the prescriptions supported by that assistance.

There is an industry reason that copay funding attracts so much attention. In its September 2014 copayment-coupon bulletin, the inspector general’s office explained that cost sharing encourages prescribing and purchasing choices that account for drug costs and supports price competition. Removing the patient’s payment can remove a constraint on the manufacturer’s price. The agency also recognized that assistance can help patients stay on medicine they otherwise cannot afford. Who controls that assistance matters to patients and taxpayers alike.

The USC Schaeffer Center’s 2020 paper, The Association Between Drug Rebates and List Prices, adds context to the patient’s side of the bill. It found that increases in estimated rebates were associated with increases in branded drugs’ list prices, and explained that patients paying deductibles or coinsurance based on list prices face those higher prices. A discount elsewhere in the payment chain can leave the patient facing a substantial charge at the pharmacy. The Incyte allegations concern the next decision: how the company allegedly used foundation funding to turn the patient’s need for help into a paid Jakafi prescription.

The Incyte Whistleblower Reward

The Justice Department announced a reward of approximately $3.59 million for the whistleblower, a former compliance executive.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Incyte’s case shows why the person who understands an assistance program’s decisions can matter as much as the person who sells the drug.

You Know Who Made the Assistance Decision

If you saw managers press a foundation to fund ineligible patients, or received reports linking donations to your company’s prescriptions, speak to one of our whistleblower experts about how those patients were funded. We develop the case with you and bring in pharmaceutical whistleblower lawyers who understand copay foundations, patient access and the claims those arrangements generate. We stay alongside you as that inside knowledge becomes a case for recovering the government’s money.