Long before anyone had heard of Martin Shkreli, in those blissful and half-remembered years before 2016, an Israeli pharmaceutical company had his idea: Why don’t we increase the price of this drug for multiple sclerosis patients from $17,000 a year to $73,000 for the last nine years we’ll have a patent on it? That’ll make it almost as profitable as pushing opioids.
Lacking, however, Shkreli’s taste for bad press, and possessed of an institutional infrastructure enjoyed by actual pharma companies but not Pharma Bros, Teva Pharmaceutical Industries had an idea to avoid telegenic, wheelchair-bound patients from getting a bill four times as high, or a letter from Medicare saying it would no longer cover such an outrageously-priced drug, calling their congresspeople and local news anchors. It would just pay the difference itself for Medicare patients, through a couple of intermediary charities, ensuring that people kept using the drug and that other people would pay new inflated price for it.
Teva’s U.S. unit and its subsidiary referred patients using Copaxone who faced Medicare copays to a specialty pharmacy. That company arranged for patients to obtain help with copays through two foundations, Chronic Disease Fund and the Assistance Fund, according to the suit.
The specialty pharmacy told Teva how many Copaxone patients were receiving copay help from each organization, which Teva would use, along with information from the foundations, to determine how much it needed to donate to each foundation
Turns out this is no more a new idea than the long-acting version of the drug Teva came up with to preserve its patent, or jacking up the price of a drug. According to the Justice Department, it’s simply a kickback. And kickbacks are illegal.
The Teva businesses used the foundations as conduits, prosecutors allege, intending for the funds it provided to cover copays as it raised the cost of the drug from about $17,000 a year to more than $73,000 a year from late in 2006 until five years ago, the suit alleges. Using the foundations in such a manner violated a federal anti-kickback statute, according to the complaint.
“Teva intended the payments to ensure that Copaxone patients never faced the steep prices that Teva charged for its drug, thus inducing the patients, including Medicare patients, to purchase the drug,” the lawsuit says.
Speaking of opioids and lawsuits:
New York said Teva, which made 20% of opioids distributed from 2006 to 2014 in the state, intentionally marketed opioids such as Actiq for off-label use, and drafted form “letters of medical necessity” for doctors to boost prescriptions and insurer reimbursements….
New York also accused Teva and Allergan of using “front groups” and doctors known as “key opinion leaders” to mislead people about the safety and effectiveness of opioids.