Horizon Blue Cross Blue Shield of New Jersey has filed suit against Regeneron Pharmaceuticals charging that the company has paid "kickbacks" to a charity in order to boost sales of its Eylea drug.
Eylea is a prescription drug administered via injection, and it treats wet age-related macular degeneration (AMD), an eye disease that can cause blindness. According to the suit, the product's wholesale price has been $1,850 per treatment since 2012.
A competitive and equally-effective drug, Avastin, costs $55 per treatment. However, Eylea's sales have significantly outpaced Avastin's, and Regeneron has earned billions in annual revenue from the drug, according to the lawsuit.
Horizon alleges in the suit that Regeneron maintained its market share for Eylea by regularly transferring funds to the Chronic Disease Fund that would be used to offer financial assistance to patients for their out-of-pocket costs related to Eylea. The funds were calculated to cover Eylea specifically but not competitors, according to the suit.
This directly injures the Medicare program as well as private insurers who cover the drug, Horizon argues, as it lowers costs for the patient but not for the payer. The scheme also allowed the drugmaker to "distort" the price of the drug to patients and prescribers while charging insurers the full cost, according to the suit.
The scheme was operated in secret until it was exposed in a June 2020 suit filed by the Department of Justice against Regeneron.
"Evidence revealed by the DOJ action demonstrates not only Regeneron’s extensive coordination with CDF, but also Regeneron executives’ awareness that this coordination violated federal law, and that wet AMD patients and prescribers would opt for Avastin in the absence of Regeneron’s kickback funding," Horizon said in the suit.
To date, Horizon said it has paid more than $180 million to cover costs related to Eylea, including $1 million in Massachusetts where the suit was filed.
Regeneron said in a statement to Fierce Healthcare that the claims in the suit are "without merit."
"This complaint is related to lawful, charitable donations Regeneron made in 2013 and early 2014 to an independent charitable patient assistance foundation to assist financially disadvantaged elderly patients with wet age-related macular degeneration ("wet AMD") gain access to treatments designed to prevent blindness," the company said.
"Regeneron is proud to support patients in need through donations to charitable foundations, which help to ensure elderly patients have access to the medicines prescribed by their physicians," it said.