Astellas: Two Charity Funds Built Around Xtandi

The Astellas Xtandi copay settlement required Astellas Pharma US to pay $100 million over allegations that it used two charity funds to pay Medicare patients’ copays for Xtandi and promoted that assistance as a reason to prescribe the drug. The government alleged that Astellas asked for funds covering a narrow drug class, became their only donor and expected its own product to receive nearly all the benefit.

The Justice Department announced the civil settlement on April 25, 2019. Astellas manufactures and markets Xtandi, which during the period covered by the agreement treated metastatic castration-resistant prostate cancer. This copay charity kickback case turns on how assistance for patients became an alleged advantage for the company selling their medicine.

How Astellas Narrowed the Funds to Xtandi

In this case, the alleged kickbacks worked through charity funds that covered Medicare copays for a drug class favoring Xtandi. The government’s allegations in the settlement agreement begin with Astellas donating to prostate-cancer funds at Patient Access Network Foundation and Chronic Disease Fund after Xtandi’s launch in September 2012.

The government described Xtandi as an androgen receptor inhibitor and alleged that none of the other major drugs treating the same form of prostate cancer, including Xtandi’s main competitor, belonged to that class. That distinction gave the proposed funds their commercial shape.

In May 2013, Astellas allegedly asked both foundations to create funds covering copays for androgen receptor inhibitors, usually called ARIs, while excluding other drugs for the same cancer. According to the government, both foundations opened their ARI funds on July 1, 2013, with Astellas as their only donor.

The government alleged that other ARIs on the funds’ covered-drug lists were generic or had very low market share, so Astellas knew Xtandi would likely account for the vast majority of use. It alleged that Xtandi patients did receive nearly all the assistance.

Under the alleged restrictions, a patient could have the right disease and still be outside the fund because the prescribed treatment belonged to a different drug class. The alleged selection happened in the coverage rules, before the foundation considered an individual application. The fund did not need Xtandi in its name to favor Xtandi in practice.

The Assistance Became Part of the Sales Pitch

Astellas allegedly promoted the funds’ availability to medical providers as an advantage over competing prostate-cancer drugs. The same company that requested the narrow funds was allegedly using their existence to persuade providers to prescribe Xtandi.

The government connected a donation decision to a prescribing message: assistance was available through funds whose design favored the donor’s product. The alleged commercial benefit reached beyond helping a patient afford a prescription already written. Astellas allegedly presented the availability of that help as a reason to choose its drug.

The government also alleged that Patient Access Network Foundation’s ARI fund continued paying enrolled patients’ copays from allocated money after it closed on February 17, 2014, through the rest of that year.

What Is a Pharmaceutical Kickback?

A pharmaceutical kickback is money or another benefit knowingly offered or paid to induce prescribing or purchases covered by a federal healthcare program. In Astellas’s case, the government alleged an indirect payment: manufacturer money went through foundations to cover Medicare patients’ share of Xtandi prescriptions.

A foundation can pay a Medicare patient’s copay while Medicare still receives a claim for the prescription. The government alleged that Astellas’s use of the foundations caused false claims for Xtandi to be submitted to Medicare.

The economic point is the larger payment that the copay makes possible. In its account of the foundation cases, the Justice Department described Medicare copays as a check on health care costs, including the prices manufacturers can demand. If a manufacturer directs assistance toward its own product, the patient gets relief while the public program continues financing the prescription.

The USC Schaeffer Center’s 2020 paper, The Association Between Drug Rebates and List Prices, found that increases in rebates were associated with increases in list prices. It also explains that patients paying coinsurance or deductibles based on list prices remain exposed to higher prices. Reducing what a patient pays at the counter and reducing the drug’s price are different business decisions.

Who Controlled the Patient Assistance?

The Department of Health and Human Services’ Office of Inspector General warned in its November 2005 patient-assistance bulletin against manufacturer control of charities and narrow disease categories that effectively earmarked aid for a donor’s drugs. The government alleged that Astellas requested funds restricted to its drug class and then promoted that assistance to prescribers.

What the Business Records Can Show

Fund requests, covered-drug lists, donation approvals and provider-facing materials can connect the manufacturer’s intent to how assistance actually operated. In this case, the government’s account joins the request to narrow eligibility, the expected concentration of aid and the message used to sell Xtandi.

The information can also travel through a specialty pharmacy. In a separate case involving Teva’s Copaxone, Advanced Care Scripts acknowledged relaying foundation data to the manufacturer so Teva could match its payments with foundation spending on Copaxone patients.

When the funds lacked money, the pharmacy gave Teva updates on eligible Medicare patients awaiting assistance. After a fund reopened, it promptly sent a batch file consisting almost entirely of Copaxone applications. It often received confirmation that most or all had been approved. The waiting-patient count, funding notice and application file connected the commercial decision to particular prescriptions.

That example shows why patient-support staff can hold a different view from the person who approved the donation. One sees the funding decision. Another sees which applications move when the money arrives. We work with pharmaceutical whistleblowers to connect those views to the resulting government claims.

Astellas and the Foundations Had Separate Settlements

Astellas’s payment obligation ran to the United States. Its agreement also referred to a corporate integrity agreement with the Inspector General’s office. That five-year agreement requires measures, controls and monitoring designed to promote Astellas’s independence from any patient-assistance program it donates to, a risk assessment program, and compliance certifications from company executives and board members.

The foundations reached their own settlements announced on October 25, 2019. Chronic Disease Fund, doing business as Good Days, agreed to pay $2 million. Patient Access Network Foundation agreed to pay $4 million. Both amounts reflected the foundations’ ability to pay.

The foundation cases concerned their own alleged roles in designing and operating assistance arrangements with drugmakers. The government alleged that Chronic Disease Fund knew Astellas wanted to earmark support for Xtandi patients. In that alleged arrangement, Medicare financed the prescriptions while the fund favored the donor’s drug over competing treatments.

When a Donation Produces a Drug Sale

A narrow fund is one way to direct assistance toward a manufacturer’s revenue. Moving a patient from free medicine to a prescription billed to Medicare is another. In the Incyte case, a whistleblower’s complaint described that alleged choice in concrete terms:

The complaint also alleged that Incyte received data confirming the foundations had funded Jakafi patients’ copays. The alleged arrangement connected a choice about free medicine to a paid prescription, then sent information about the assistance back to the donor.

The government’s amended complaint against Regeneron described an even more explicit sales calculation. It alleged that employees asked how much Chronic Disease Fund needed for Eylea patients alone and calculated a return of over 400% on the company’s payments. The complaint also alleged that Regeneron selected a higher launch price because additional foundation funding could cover the resulting Medicare copays.

These cases expose different decisions inside the same business relationship: which treatment a fund covers, whether a patient receives free medicine, and what revenue the donor expects its contribution to produce. Astellas’s distinctive allegation joins the first decision to the sales pitch. People who saw those decisions being made can explain how the assistance served the business.

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

You Know Why the Fund Was Designed That Way

If you saw assistance eligibility shaped around a drug or promoted as a reason to prescribe it, bring that account to our whistleblower experts. We build the case with you around the funding decisions, the sales message and the Medicare claims, and bring in pharmaceutical kickback whistleblower lawyers who know patient-assistance arrangements. We stay beside you throughout the process, with whistleblower counsel handling the legal representation.