BOSTON (Legal Newsline) – Basically all of the federal government’s lawsuit brought under the Anti-Kickback Statute against Teva Pharmaceuticals will be moving forward.
Boston federal judge Nathaniel Gorton on Sept. 9 tossed the government’s unjust enrichment claim but allowed all others to proceed when he denied Teva’s motion to dismiss a False Claims Act lawsuit brought over the Multiple Sclerosis drug Copaxone.
The lawsuit alleges Teva has violated the Anti-Kickback Statute by donating funds to groups that helped patients make co-payments on the drug.
When a Medicare patient purchased Copaxone, Teva had two foundations provide the co-pay, which resulted in hundreds of millions of dollars in kickbacks and a rise in the drug’s cost, the lawsuit says.
Teva argued the feds couldn’t allege a violation of the FCA, which covers alleged false claims made to the federal government for repayment – like Medicare and Medicaid costs.
“Teva’s assertion that the government cannot link its donations to specific false claims because other donors contributed to the relevant MS funds is unpersuasive,” Gorton wrote. “The government has alleged, in sufficient detail, a scheme by which Teva practically guaranteed that its own donations would result in the submission of Medicare claims for Copaxone.
“To wit, the complaint identifies 30 examples of payments made by either (the Chronic Disease Fund) or (The Assistance Fund) to cover the copays of Copaxone patients who later submitted claims to Medicare for their prescriptions.
“It links those payments to the purported scheme in which Teva contributed to MS funds devoid of funding so that the applications submitted by ACS for Copaxone patients would be first in line to benefit from the new funding.”
Gorton only dismissed the unjust enrichment claim because the remedy for it falls already falls under the FCA.
He said Teva’s opinion that the lawsuit restricts the company’s ability to communicate with charitable organizations is “without merit.”
“The complaint is clear that it is Teva’s conduct and not its speech which purportedly violates the AKS,” he wrote.
The lawsuit says Copaxone’s price rose at a rate more than 19 times the rate of inflation, and the Medicare program ended up paying more than it should have.
Teva paid the Chronic Disease Fund and The Assistance Fund more than $300 million to cover co-pay obligations of Medicare patients, the suit says.
Teva previously asked Boston federal judge Dennis Saylor to consolidate the case with a similar one against Regeneron Pharmaceuticals, which is alleged to have used the Chronic Disease Fund to subsidize co-pays for Eylea, a drug that treats wet age-related macular degeneration.
In its motion to dismiss, the company had argued the federal government’s lawsuit would shift significant cost burdens onto seniors and that it failed to allege any physician was influenced to prescribe Copaxone because of the co-pay agreements.