Feds probe relationship between drugmakers, pharmacy benefit managers

Federal prosecutors are investigating contracts between three pharmaceutical companies and unnamed pharmacy benefit managers (PBMs), an indication the federal government is increasing its scrutiny of potential False Claims Act violations within the agreements, according to the Wall Street Journal.

Johnson & Johnson, Merck & Co. and Endo International PLC each received a civil investigative demand from the U.S. Attorney's Office for the Southern District of New York in March requesting information about PBM contracts dating back to Jan. 1, 2006. According to an SEC filing by Endo International, authorities are looking at the company's contracts with PBMs regarding Frova, a migraine treatment medication. Merck's filing revealed prosecutors were investigating Maxalt, also a headache medication, and Levitra, which treats erectile dysfunction.

The relationship between PBMs and drugmakers has received more attention as of late. Last November, Merck received a separate request from the U.S. Attorney for the Eastern District of Pennsylvania, according to WSJ. Weeks prior, Novartis agreed to pay $390 million to settle claims it paid kickbacks to specialty pharmacies to boost sales numbers for certain drugs. AntraZeneca also paid $7.9 million to settle claims it gave discounts on drugs to keep Nexium on Express Scripts' formulary.  

Last year, Citron Research accused Valeant Pharmaceuticals International Inc. of using the specialty pharmacy Philidor RX Services LLC to create phantom sales, and a California pharmacist accused Philidor of "widespread fraud."

To learn more:
- read the WSJ article
- here's Merck's filing
- see Endo International's filing