Ultragenyx: Free Tests, Purchased Results, and the Next Sales Call

The Ultragenyx Crysvita genetic testing settlement required Ultragenyx Pharmaceutical Inc. to pay $6 million over alleged kickbacks involving free tests and separately purchased test-result information. A patient could receive the test without paying. The manufacturer paid twice: once for the testing and again for information its commercial team used to find potential Crysvita patients and the providers treating them.

The Justice Department announced the settlement on December 21, 2023. A whistleblower brought the pharmaceutical fraud case under the False Claims Act’s qui tam provisions, and the government intervened in part. In the signed agreement, Ultragenyx accepted responsibility for specific facts about the testing arrangement, the information it purchased and the sales instructions. The government alleged that those practices induced prescriptions and referrals that produced false Medicare and Medicaid claims at taxpayers’ expense.

The Test Was the First Payment

Ultragenyx paid a laboratory to perform genetic tests at no cost to patients or their healthcare providers and to return the results to the providers. The tests concerned X-linked hypophosphatemia, a rare inherited disorder that causes low phosphate levels and can leave bones soft and weak. Crysvita treats that condition.

The disease can be difficult to diagnose because its symptoms resemble other disorders. The agreement explains that genetic testing is often needed for a definitive diagnosis. Ultragenyx acknowledged that, in some cases, a positive genetic result was required for a provider to diagnose the condition and prescribe Crysvita, or for an insurer, including Medicare or Medicaid, to reimburse it.

The free test could help turn a diagnosis into a reimbursed prescription. Ultragenyx sales representatives discussed the sponsored testing program with providers and delivered test-order forms to their offices. The sales operation helped introduce the service whose results would later come back to it.

The government’s pharmaceutical kickback allegation under the Anti-Kickback Statute included a benefit to patients: covering the cost of the genetic test to induce their purchase of government-reimbursed Crysvita. The patient received testing without a bill, while the alleged return to the manufacturer came through drug purchases paid by public health care programs.

The Information Was the Second Payment

Ultragenyx separately paid the laboratory to send test results to the company. Its commercial team used that information, in part, to identify potential Crysvita patients and their providers for follow-up marketing.

The reports omitted patient names but included the ordering provider’s name, a de-identified patient identification number, the date the test was ordered and, once available, the result. The provider’s identity remained attached to the testing activity. Sales representatives could see which practice had ordered a test and which practice had a patient with a positive result.

Until April 2022, Ultragenyx distributed those reports to its sales force with instructions to make Crysvita sales calls to providers who ordered tests, particularly those with positive patient results. The company acknowledged that its sales force followed up with providers about the results. The patient’s name was absent. The sales destination was still there.

The government’s second payment allegation followed that information purchase. It alleged that Ultragenyx paid the laboratory to supply reports that directed employees to providers, and that the targeted effort resulted in Crysvita prescriptions reimbursed by Medicare and Medicaid. The purchased information connected the laboratory’s work to the manufacturer’s next sales call and, allegedly, to the government’s drug bill.

Ultragenyx Cut Off Sales Access in April 2022

Ultragenyx stopped providing the reports to its sales force and stopped using them for marketing in April 2022, after learning of an opinion issued by the inspector general of the Department of Health and Human Services. The government’s allegations cover February 1, 2019 through May 30, 2022.

The inspector general’s Advisory Opinion No. 22-06, issued April 6, 2022, assessed another manufacturer’s free genetic testing and counseling program, whose information arrangements differed from Ultragenyx’s. In that program, the vendors’ data did not enable the manufacturer to identify patients or ordering providers. Sales representatives could not access the vendor data, and the company did not use it for sales targeting or incentives.

For someone inside a testing program, these are concrete business decisions: what the laboratory sends back, who can see it and what the commercial team does next. In Ultragenyx’s agreement, the company described changing precisely that access and use.

QOL Medical’s Breath Tests Reached the Sales Team Too

QOL Medical and its chief executive agreed to a $47 million civil settlement in November 2024 over allegations that free Carbon-13 breath testing induced claims for Sucraid. That separate case shows how free diagnostic testing can feed a sales operation beyond the initial delivery of kits.

QOL accepted responsibility for facts about its program. It paid a laboratory to analyze breath tests and send results to providers and to QOL. The company passed results to sales representatives with instructions to call providers whose patients tested positive, then tracked whether representatives converted those results into Sucraid prescriptions.

The whistleblowers’ amended complaint describes what sales staff allegedly heard when doctors questioned the test:

QOL’s prescription tracking carried the information through to a measured sales result. Ultragenyx’s agreement identifies the separate purchase of reports and the instructions to act on them. The drugs and tests differ, but both cases put the laboratory-to-sales handoff at the center.

What Evidence Is Needed to Prove Fraud?

For this testing arrangement, the useful evidence connects the payments for tests and reports, the information delivered to sales, the follow-up instructions and the government-paid prescriptions. Ultragenyx’s agreement supplies each part of that alleged chain.

Someone who handled the laboratory arrangement may understand why the company paid for both testing and information. A commercial operations employee may know who received the reports and how they selected providers for follow-up. A sales representative may know what the instruction meant in practice and what happened when a positive result arrived.

Here, a report can show what information changed hands. The person who worked with it can explain how it became a sales assignment. That is the connection our whistleblower experts build with an insider.

The Settlement and the Whistleblower’s Share

The Justice Department allocated approximately $5.8 million of the Ultragenyx settlement to Medicare and the federal share of Medicaid, and approximately $200,000 to state Medicaid programs. The whistleblower’s announced reward was approximately $1.07 million from the federal recovery.

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

You Know Who Received the Results

If you worked with sponsored tests, laboratory reports or the sales instructions built around them, speak with our whistleblower experts about how the results reached sales. We work beside you to build your strongest pharmaceutical whistleblower case and bring in pharmaceutical kickback whistleblower lawyers who understand testing arrangements.