On September 23, the U.S. Department of Justice announced that pharmaceutical company Gilead Sciences, Inc. agreed to pay $97 million to resolve claims that it illegally used a foundation as a conduit to pay the copays of thousands of Medicare patients taking Gilead’s pulmonary arterial hypertension drug Letairis. In addition to the False Claims Act (FCA), Gilead also allegedly violated the federal Anti-Kickback Statute (AKS) by paying remuneration to patients to induce them to purchase Gilead’s drug.

From 2007 through 2010, Gilead used the foundation Caring Voice Coalition (CVC) to pay the Medicare patients’ copay obligations for Letairis. The Gilead announcement came only a few weeks after the DOJ sued Teva Pharmaceuticals USA Inc. on similar grounds, as discussed here. Several other kickback cases involving large pharma companies’ use of foundations were settled in 2017-2018.

“Like its competitors, Actelion and United Therapeutics, Gilead . . . effectively set up a proprietary fund within CVC to cover the co-pays of just its own drug,” said U.S. Attorney Andrew E. Lelling.  “Such conduct not only violates the anti-kickback statute, it also undermines the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices. During the period covered by today’s settlement, Gilead raised the price of Letairis by over seven times the rate of overall inflation in the United States.”