Michigan Attorney General Dana Nessel and the attorneys general for Colorado, Georgia, North Carolina, Texas, and Washington have filed suit in federal district court against Regeneron Pharmaceuticals (PDF), a New York-based pharmaceutical company, for allegedly inflating the amount that the states’ Medicaid programs have paid and continue to pay for the eye medication Eylea. The complaint alleges the scheme resulted in the submission of tens of thousands of false claims to Medicaid and millions of dollars in losses to the states.
“Regeneron’s fraudulent scheme siphoned millions from taxpayers and jeopardized the integrity of the Medicaid program,” Nessel said. “I am proud to join attorneys general from across the country in holding accountable those who exploit our health care system and defraud public dollars.”
Regeneron manufactures and sells Eylea, an FDA-approved drug used to treat forms of macular degeneration and other ophthalmological conditions. Medicaid is a joint federal-state program that provides health care benefits, including prescription drug coverage for drugs like Eylea, to qualified people, including low-income individuals and 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. In determining the reimbursement rate for each claim submitted for Eylea, each of these state’s Medicaid programs relied on the Average Sales Price (ASP) reported by Regeneron to the federal Centers for Medicare and Medicaid Services.
The complaint alleges that Regeneron was required to include all price concessions for Eylea as part of its ASP reporting to CMS, but knowingly failed to include credit card processing fees that Regeneron paid its distributors to allow distributors to charge customers a lower effective price for Eylea. The states allege that Regeneron paid these credit card fees so that doctors and retina practices that purchased Eylea could use credit cards at no additional cost and obtain hundreds of millions of dollars in “cash back” rewards. By knowingly failing to report these credit card processing fees as price concessions, Regeneron falsely inflated each state’s Medicaid reimbursement for Eylea, according to the complaint.
The lawsuit, filed June 25 in the U.S. District Court for the District of Massachusetts, originated as a whistleblower case in which the U.S. Department of Justice has already sued under the federal False Claims Act. The states seek monetary damages and penalties under each of their respective false claims act or other state laws.
The Attorney General’s Health Care Fraud Division (HCFD) is handling this case for the Department. The HCFD is the federally certified Medicaid Fraud Control Unit for Michigan, and it receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $5,541,992 for the fiscal year 2024. The remaining 25% percent, totaling $1,847,326 is funded by the State of Michigan.
Original source can be found here.