Drug Firm to Pay Feds $280 Million to Settle Pricing Claims
Dey Pharma, LP, maker of several drugs has agreed to pay $280 million to settle U.S. Justice Department accusations that it violated the False Claims Act by artificially inflating prices for drugs reimbursed with federal funds.
The settlement is the fourth involving a pharmaceutical manufacturer this month, following agreements with Abbott Laboratories, B. Braun Medical Inc. and Roxane Laboratories, which totaled $421.1 million. Justice officials say they have recovered more than $2 billion from pharmaceutical companies for similar “unlawful drug pricing schemes.”
In the Dey allegation, which was related by whistleblower Ven-A-Care of the Florida Keys, a home-infusion company, Justice officials said that the manufacturer overpriced the drugs Albuterol Sulfate, Albuterol MDI, Cromolyn Sodium, and Ipratropium Bromide.
“The difference between the resulting inflated government payments and the actual price paid by healthcare providers for a drug is referred to as the ‘spread’,” the DoJ said in a statement. “The larger the spread on a drug, the larger the profit for the healthcare provider or pharmacist who is reimbursed by the government.” The government alleges that Dey created artificially inflated spreads to market, promote and sell the drugs to existing and potential customers.
As a result, Justice officials said, “the government paid millions of claims for far greater amounts than it would have if Dey had reported truthful prices.”
The case stems information provided by Ven-A-Care under qui tam provisions that allow entities who witness or become aware of fraud to file suit on behalf of the U.S. government and share a percentage of money recovered. Ven-A-Care will receive $67.2 million.
Justice officials said the pharmaceutical practice of fraudulently overpricing drugs is a major area being targeted by HEAT, the Health Care Fraud Prevention and Enforcement Action Team set up in 2009 to form collaborations between the Department of Health and Human Services and the U.S. Attorney General.
New kidney cancer drug fast-tracked
A new drug to treat advanced kidney cancer has been fast-tracked for use on the NHS, a health watchdog said.
The National Institute for Health and Clinical Excellence (Nice) recommends Votrient (pazopanib) for patients with advanced cancer if they meet certain criteria, including no previous cytokine therapy.
Pharmaceutical giant GlaxoSmithKline (GSK) has agreed to offer a 12.5% discount on the list price to the NHS and a possible future rebate following the outcome of a clinical trial comparing the drug to another, sunitinib (Sutent), which is already approved.
It comes after Nice came under fire in November for turning down everolimus (Afinitor) for advanced kidney cancer, despite a risk-sharing scheme proposed by manufacturer Novartis.
Nice said the drug did not give patients enough benefit to justify its cost. Research suggests everolimus extends life by three months on average but at £99 per day per patient, it was deemed too expensive.
Sutent is already recommended in some cases for advanced kidney cancer, but other drugs including bevacizumab (Avastin), sorafenib (Nexavar) and temsirolimus (Torisel) are not.
Dr Carole Longson, health technology evaluation centre director at Nice, said: “Sunitinib is recommended by Nice for first-line treatment of advanced renal cell carcinoma.
“Pazopanib will offer patients an additional option and, for some, a more favourable side effect profile.
“The manufacturer has offered a straight discount on the list price of pazopanib, as well as providing a possible future rebate linked to the outcome of the head-to-head trial comparing pazopanib and sunitinib; making pazopanib a cost-effective option for the NHS.”
Every year more than 8,000 new cases of kidney cancer are diagnosed in the UK and almost half will lead to death – around four out of 10 patients are diagnosed when their cancer is at an advanced stage.