By Nate Raymond
BOSTON (Reuters) - Biogen Inc (NASDAQ:BIIB) has agreed to pay $22 million to resolve U.S. allegations that it illegally used two charities that help cover Medicare patients' out-of-pocket drug costs as a means to pay them kickbacks to use its multiple sclerosis drugs.
The deal, announced by the U.S. Justice Department on Thursday, was the latest to result from an industry-wide probe of drugmakers' financial support of patient assistance charities that has resulted in more than $1 billion in settlements.
A specialty pharmacy that performed services for the Cambridge, Massachusetts-based company, Advanced Care Scripts, has also agreed to pay $1.4 million to resolve allegations it conspired to help Biogen use the charities as conduits.
Neither Biogen nor the pharmacy admitted wrongdoing. Their representatives did not immediately respond to requests for comment.
Drug companies are prohibited from subsidizing co-payments for patients enrolled in Medicare, the government healthcare program for those aged 65 and older. Companies may donate to non-profits providing co-pay assistance as long as they are independent.
But the government has alleged that various pharmaceutical companies including Biogen used such charities as means to improperly pay the co-pay obligations of Medicare patients using their drugs, in violation of the Anti-Kickback Statute.
"Biogen coordinated with ACS to game the system, time its payments, and direct its money to cover co-pay costs for patients using its drugs," said First Assistant U.S. Attorney Nathaniel Mendell in a statement.