On February 28, 2020, the United States Department of Justice (DOJ) announced that Sanofi-Aventis U.S., LLC (Sanofi) agreed to pay $11.85 million to resolve allegations that it violated the False Claims Act (FCA) by paying kickbacks to Medicare patients through a charitable foundation, The Assistance Fund (TAF).
TAF has a variety of assistance funds, including one for multiple sclerosis (MS) patients who take Lemtrada, a MS drug with a cost of around $100,000 per patient per year. These funds pay the co-pays for certain patients, including Medicare patients.
According to the government, TAF raised its maximum per-patient grant allocation to $20,000 to accommodate Lemtrada patients. Then, during the relevant time period, TAF’s MS fund frequently ran out of funding and was closed to new patients. If any patients applied for co-pay assistance at a time when the MS fund was out of funding and closed to new patients, TAF did not maintain a wait list of such patients. As a consequence, whenever TAF’s MS fund opened to new patients, the fund provided grants to the patients who applied immediately after the opening and did not provide grants to patients who had sought to apply earlier but at a time when the fund was closed.
The government further alleged that Sanofi made payments to TAF with the intention of using TAF as a conduit to pay the financial obligations – including Medicare co-pay obligations – of Lemtrada patients. These alleged payments would be in violation of the Anti-Kickback Statute.
According to the DOJ, Sanofi worked with its third-party reimbursement hub to identify Medicare patients who had prescribed Lemtrada, but who had not yet received the infusions due to lack of funds. From 2015 to 2016, Sanofi made nine payments to TAF. When eight of these nine payments were made, TAF’s MS fund was out of funding, and was closed to new patients. At the same time Sanofi made those payments to TAF, it instructed its hub quickly to refer as many Lemtrada patients as possible to the TAF MS fund. This helped to ensure that when TAF’s MS fund opened with the funding from Sanofi, Lemtrada patients received a disproportionately large share of the Medicare co-pay grants TAF issued.
Sanofi did not admit wrongdoing as part of the settlement. In the statement released by the company, it defended the practice of providing financial support to such charitable organizations, saying it “believes these programs help patients lead healthier lives.”
Corporate Integrity Agreement
In addition to agreeing to pay $11.85 million to settle these allegations, Sanofi entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). That CIA requires new compliance mechanisms, including that Sanofi implement measures designed to ensure that arrangements and interactions with third-party patient assistance programs are compliant with the law. In addition, the CIA requires reviews by an independent review organization, and compliance-related certifications from company executives and Board members.
According to a release by Sanofi, “[m]any of the requirements are already incorporated into the Company’s existing U.S. compliance program.” Sanofi also noted its commitment to compliance, saying that its “compliance program is regularly enhanced to ensure its controls meet or exceed the complex and evolving legal, regulatory, and industry requirements, as well as the expectations of patients and providers.”
“Sanofi sought to undermine the Medicare program through its use of kickbacks disguised as routine charitable donations aimed at helping patients battling multiple sclerosis and who were struggling with costly copays,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “They rigged the system so those taking its drug Lemtrada gained an unfair advantage over patients using other medications, and with today’s settlement, they are finally being held accountable for their actions.”