Lundbeck: Moving Off-Label Patients to a General Fund

In the Lundbeck Xenazine copay settlement, Lundbeck LLC agreed to pay $52.6 million to resolve allegations that it paid copay kickbacks through a foundation for its own drug, including unapproved uses. The government’s account turns on what happened when a Huntington’s disease fund stopped paying for patients with other conditions: Lundbeck allegedly agreed to repurpose some earlier donations for a general fund. The funding restriction had become an obstacle, and the company allegedly helped find another place for the money.

The Department of Justice announced the civil settlement on April 4, 2019. Lundbeck’s agreement was part of a three-company resolution totaling $122.6 million over alleged copay charity kickbacks. Its part of the story turns on an exchange about compliance with the foundation’s advisory opinion.

Xenazine Patients Outside the Huntington’s Disease Fund

Xenazine was the only drug approved to treat chorea associated with Huntington’s disease until a generic version became available. The government alleged that Lundbeck was the sole donor to a fund at a foundation that ostensibly supported only patients with Huntington’s disease, and that it made millions in payments to that fund. It alleged that Lundbeck referred Xenazine patients with many other conditions to the fund. The foundation then paid their Xenazine copays from that fund, including copays for uses that had not been approved.

The off-label use and government payment issue here concerns how Lundbeck’s donations financed copays when the patients fell outside the fund’s disease restriction.

The General Fund and the Question About Oversight

In June 2014, after the foundation decided its Huntington’s disease fund would no longer pay these copays, Lundbeck allegedly agreed to repurpose some of its prior donations to a “general fund” at the foundation to pay them. It then allegedly made “unrestricted” payments with the understanding that the foundation would use them to pay Xenazine copays for the same patients.

The Justice Department’s account includes a question from Lundbeck about whether the arrangement risked violating the foundation’s advisory opinion from the HHS Office of Inspector General. The foundation allegedly replied that others did not know what it used the general fund for. Lundbeck had raised compliance, and the answer pointed to a lack of visibility into the spending.

Who Decides Which Patients Get Help?

The charity is supposed to decide who gets assistance, independently of the donor. The HHS Office of Inspector General’s 2005 bulletin described awards based on a consistent, verifiable measure of financial need, without regard to the manufacturer’s interests or the patient’s choice of product. It also said manufacturers should not receive data connecting their donations to subsidized prescriptions for their products. Those are everyday decisions about eligibility, drug choice and what information goes back to the company writing the checks.

Why Paying a Copay Can Preserve a Drug Sale

A foundation-paid copay can leave Medicare paying the balance of a prescription. Giving the drug away produces no revenue from that prescription. For a manufacturer, those are very different ways to help a patient who cannot afford treatment. The government alleged that Lundbeck’s free drug program for Xenazine was open to other financially needy patients but not to Medicare or ChampVA patients, even those who could not afford their Xenazine copays. Instead, to generate revenue from Medicare and ChampVA and induce purchases of Xenazine, Lundbeck allegedly referred financially needy Xenazine patients without Huntington’s disease to the foundation, which resulted in claims to Medicare and ChampVA for the cost of the drug.

The patient’s share can be the obstacle to filling a prescription. A manufacturer that funds that share through a foundation can preserve the sale while the health care program pays the rest. The donation leaves the company through one door, and prescription revenue comes back through another. That is why the manufacturer’s role in deciding who gets assistance matters to taxpayers.

The HHS Office of Inspector General’s 2014 bulletin on manufacturer copayment coupons explained why that matters for prices. Cost sharing encourages prescribing and purchasing choices that take drug costs into account. Removing the patient’s payment can remove a constraint on the manufacturer’s price, leaving federal healthcare programs exposed to the cost. The same bulletin recognized that copay support can help patients stay on medicines they otherwise could not afford.

Incyte and the Pressure to Keep Assistance Flowing

Incyte’s Jakafi settlement supplies a close parallel. The government alleged that company managers used calls and emails to pressure a foundation to fund ineligible patients. The company agreed to a $12.6 million civil settlement, announced in May 2021.

A former Incyte compliance executive brought the whistleblower case. The complaint alleged that Incyte moved some Medicare patients who might have qualified for free Jakafi to foundations paying their copays, generating Medicare claims when the prescriptions were filled. It then described the information coming back to the company:

That alleged return of information closes the loop between the donation and the drug sale. The manufacturer could see that its money supported patients taking its product. Lundbeck’s alleged workaround concerned repurposing donations after a disease fund stopped paying. Incyte’s concerned pressure on eligibility decisions. Both put communications between the donor and foundation at the center of the case.

What Patient-Assistance Staff Can Reveal

Fund definitions, referral communications, donation approvals and assistance records can connect the manufacturer’s decisions to the patients whose copays were paid. In the Lundbeck allegations, the critical comparison is the arrangement before and after the foundation stopped paying from its Huntington’s disease fund.

Our work with pharmaceutical whistleblowers connects what an employee saw to those transactions. A funding employee may know why an existing donation was repurposed. A patient-assistance employee may know which patients were referred and what happened when assistance stopped. A foundation employee may know who requested a change and how the request affected payment decisions.

We examine how the funding decision, the correspondence and the resulting copay payments fit together. In this case, the most revealing question is what changed after the foundation said it would stop paying.

The Settlement and Patient-Assistance Controls

The resolution also included a five-year corporate integrity agreement with the HHS Office of Inspector General. It requires measures, controls and monitoring designed to promote Lundbeck’s independence from any patient-assistance program it donates to, a risk assessment program, and compliance certifications from company executives and board members.

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

You Know Why the Funding Changed

If you saw a donor redirect money after patients lost access to a fund, tell our whistleblower experts what changed. We connect your knowledge of the funding decisions to your strongest pharmaceutical whistleblower case and bring in whistleblower lawyers who understand copay foundations and manufacturer kickbacks. We stay with you as the case develops, keeping the business decisions you witnessed at its center.