Johnson & Johnson Acquisition Actelion to Pay $360 Million In Federal Charitable Impropriety Probe

Towards the end of the week, a unit of Johnson & Johnson has agreed to pay $360 million in a recent lawsuit over financial inconsistencies.  With the payment, the company hopes to resolve an investigation over Johnson & Johnson’s financial support of a charity who focuses on helping Medicare patients cover out-of-pocket drug expenses.

According to the United States Department of Justice, this Actelion Pharmaceuticals US Inc settlement is the largest such case, so far, to result from the recent industry-wide probe into how drugmakers support patient-assistance charities.

Actelion Pharmaceuticals US Inc became a subsidiary of Johnson & Johnson in a 2017 acquisition.  The US government has alleged that Actelion used the charity as a means to improperly pay thousands of Medicare patients’ co-pay obligations for pulmonary artery hypertension treatments between 2014 and 2015.  These treatments include big names like Opsumit, Tracleer Veletri, and Ventavis.

Furthermore, the charity in question is known as the Caring Voice Coalition.  This is important because US government revoked the organization’s approval to provide aid, in 2017, over concerns that drugmakers (no brand in particular) had an improper influence over the charity. Thus, it should be noted that the Department of Justice recognizes that the alleged improprieties occurred before Johnson & Johnson’s acquisition.

In the suit, the allegations describe that Actelion had obtained data from the Caring Voice Coalition which contained details about the number of patients who use Actelion drugs.  Also, it appears that Actelion learned how much the foundation expected to spend on those patients, in particular, down the road.  And then, Actelion allegedly took this information and established a budget for future payments to the foundation.  Essentially, then, this confirmed that Actelion’s charitable contributions could cover copays for patients who could not afford them but not enough money to cover the copay for patients who were taking medicine from a competitor.

Furthermore, it seems Actelion launched a policy that did not allow Medicare patients to participate in the free-drug program. Basically, Actelion referred Medicare patients to the Caring Voice Coalition for help with payment instead of incentivizing patients to use their drug (through the free-drug program, for example), with the goal of generating revenue from Medicare.

Pharmaceutical companies donating money to charities—in the hundreds of millions—is nothing new. Indeed, these donations help patients to cover copays and other out-of-pocket drug-related expenses. Thus, federal prosecutors started to investigate charities that help Medicare patients in 2015.

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