BioTek reMEDys: The Copay Disappeared, the Sale Stayed

In the BioTek reMEDys settlement, the specialty pharmacy and its chief executive agreed to pay $20 million to resolve allegations of routine copay waivers and physician referral kickbacks. The government alleged that BioTek removed the patient’s cost barrier while giving benefits to physicians who could send patients its way. A referring physician paid a separate settlement, and the former chief marketing officer later agreed to exclusion from federal healthcare programs.

BioTek, based in New Castle, Delaware, offered specialty drugs and infusion services. Former employees brought the False Claims Act case behind these pharmaceutical fraud settlements.

How BioTek’s Copay Waivers Worked

BioTek allegedly waived Medicare and TRICARE patients’ copays routinely, without regard to financial hardship, to induce them to buy its drugs and services. The government placed the conduct from at least August 2015 through May 2020. Many of the pharmacy’s specialty drugs were expensive and carried large patient payments.

The government alleged a straightforward commercial purpose: those copays could deter purchases, so BioTek removed them to protect a steady revenue stream. It attributed the scheme’s orchestration and implementation to the chief executive and others.

The patient saved the copay, but Medicare and TRICARE still faced the cost of the purchase. Medicare’s copay requirements were designed in part to check health care costs. In its bulletin on manufacturer copay coupons, the Department of Health and Human Services’ Office of Inspector General explained that cost sharing encourages prescribing and purchasing decisions based on drug costs.

The USC Schaeffer Center’s 2020 paper, The Association Between Drug Rebates and List Prices, explains why insured patients can still face large bills: their coinsurance and deductibles can be based on drugs’ list prices. In BioTek’s case, the government alleged that the pharmacy treated that patient bill as an obstacle to its own revenue.

Physician Referrals Came With Benefits for the Practice

BioTek allegedly supplied gifts, dinners, and free administrative and clinical support services to physicians to induce patient referrals. The government singled out a physician operating a neurology practice in Bala Cynwyd, Pennsylvania. It alleged that he knowingly solicited and accepted those benefits in exchange for referring numerous patients to the pharmacy.

The free services deserve as much attention as the dinners. The alleged exchange becomes clearer when the benefit is placed beside the referrals: the practice gets support, and the pharmacy gets patients.

The Justice Department’s explanation of the Anti-Kickback Statute covers money and other things of value given or accepted in exchange for referrals of federally reimbursed items or services. That explains why the case reaches the work performed for the practice as well as the money spent entertaining a physician.

For someone inside a physician’s office, the useful knowledge may be what the pharmacy’s staff actually did and how that support was discussed alongside referrals. For someone inside the pharmacy, it may be the purpose behind providing it.

The Separate BioTek Settlement Outcomes

BioTek and Its Chief Executive

In September 2023, the Justice Department announced the company and chief executive’s joint settlement, based on BioTek’s ability to pay. The resolution covered both the alleged copay waivers and the physician referral benefits.

The department said the former employees who brought the whistleblower case would receive $4 million as their share of this settlement.

The Referring Physician

The physician separately paid $480,000 to resolve the allegations that he solicited and accepted benefits for referrals. His settlement also rested on ability to pay. The same announcement allocated the former employees a separate whistleblower share from this payment.

The Former Chief Marketing Officer

On February 16, 2024, the Justice Department announced a separate resolution with BioTek’s former chief marketing officer. She agreed to a six-year exclusion from federally funded health care programs, including Medicare.

The government alleged that she orchestrated and implemented the routine copay waivers and that BioTek supplied the physician benefits under her leadership.

What This Case Shows About Specialty Pharmacy Kickbacks

The specialty pharmacy kickbacks alleged here turned patient assistance and practice support into ways to buy business.

A different assistance channel appears in the Incyte whistleblower complaint. It alleged that Incyte moved some Medicare patients who might qualify for free Jakafi into foundation assistance that covered their copays. The complaint describes why that change mattered to revenue:

The complaint also alleged that Incyte received foundation data confirming that its contributions funded Jakafi patients’ Medicare copays. That copay charity arrangement used a foundation to cover the patient’s payment. BioTek allegedly waived the payment itself. In each account, the business purpose of the assistance becomes visible when it is connected to the drug purchase and the government claim.

What Evidence Is Needed to Prove Fraud?

That depends on what you saw, and it is what we work through with you. We look at who authorized the benefit, who received it, and what the pharmacy expected in return.

Our review would connect patient balances and waiver decisions with the purchases and claims they affected. On the physician side, we would examine what support the practice received and how the people arranging it understood its relationship to referrals.

The BioTek case began with former employees. Their role is a concrete example of why a pharmaceutical whistleblower’s knowledge of daily operations matters. Someone who knows how a waiver was approved or why a practice received free support can explain a decision that the bill alone does not show. We work with you to connect that knowledge to the payments and the people directing the business.

How Much Money Do Pharmaceutical Whistleblowers Get for Exposing Fraud?

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

You Know Why the Copay Disappeared

If you worked in pharmacy billing, patient support, marketing or a referring practice, talk with our whistleblower experts about the benefits and referrals you saw. We build your case around the decisions behind those transactions and bring in pharmaceutical kickback whistleblower lawyers who understand specialty pharmacy relationships. We stay with you through the whole process to build your strongest pharmaceutical whistleblower case.