The attorneys general for Colorado, Georgia, Michigan, North Carolina, Texas, and Washington have filed a lawsuit in federal district court against Regeneron Pharmaceuticals. The New York-based pharmaceutical company is accused of inflating the costs that the states’ Medicaid programs have paid for the eye medication Eylea. The complaint alleges that this scheme led to tens of thousands of false claims being submitted to Medicaid and resulted in millions of dollars in losses for the states.
“Companies that defraud Medicaid are undermining health care services and cheating the public,” said Attorney General Phil Weiser. “We are committed to holding such companies accountable and protecting Colorado health care funds.”
Regeneron manufactures Eylea, an FDA-approved drug used to treat forms of macular degeneration and other ophthalmological conditions. Medicaid is a joint federal-state program providing health care benefits, including prescription drug coverage for drugs like Eylea, to qualified individuals such as low-income families, the elderly, and people with disabilities. Between 2013 and 2023, the Medicaid programs for Colorado, Georgia, Michigan, North Carolina, Texas, and Washington collectively spent over $175 million on Eylea. Each state’s Medicaid program determined reimbursement rates based on the Average Sales Price (ASP) reported by Regeneron to the Centers for Medicare and Medicaid Services (CMS).
The complaint asserts that Regeneron was required to include all price concessions for Eylea in its ASP reporting but knowingly failed to include credit card processing fees paid to distributors. These fees allowed distributors to charge customers a lower effective price for Eylea. The states allege that these fees enabled doctors and retina practices purchasing Eylea to use credit cards at no additional cost while obtaining significant "cash back" rewards. By not reporting these credit card processing fees as price concessions, Regeneron allegedly inflated each state’s Medicaid reimbursement rate for Eylea.
The lawsuit was filed on June 25 in the U.S. District Court for the District of Massachusetts and originated from a whistleblower case where the U.S. Department of Justice has already sued under the federal False Claims Act. The states seek monetary damages and penalties under their respective false claims acts or other state laws.
“The Colorado Medicaid Fraud Control Unit receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $3,795,665 for federal fiscal year 2024," stated an official release. "The remaining 25 percent totaling $1,265,221 is funded by the State of Colorado for the federal fiscal year.”