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Pfizer to pay $23.85 million to resolve dispute over kickbacks

By Brooke Baitinger
Pfizer to pay $23.85 million to resolve dispute over kickbacks
A metal plate logo of Pfizer in the company's headquarters building. Pfizer has agreed to pay more than $23 million in an agreement publicized by the U.S. Justice Department Thursday. Photo by pio3/Shutterstock

May 24 (UPI) -- Drug company Pfizer has agreed to pay $23.85 million to resolve claims it violated the False Claims Act by using a foundation to cover the copays of Medicare patients taking three of its drugs.

The U.S. Department of Justice announced the agreement in a news release Thursday.

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The Justice Department said Pfizer used an independent charity to subsidize the copays of Medicare patients taking Pfizer's renal cell carcinoma drugs Stutent and Inlyta, as well as Tikosyn, which treats arrhythmia in patients with atrial fibrillation or atrial flutter.

Pfizer used the foundation, which the Justice Department did not identify, to subsidize the patients' copays rather than give the drugs for free to qualified patients, the department said.

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Under the federal Anti-Kickback Statute, pharmaceutical companies cannot offer any money -- including paying patient's copay obligations -- to encourage Medicare patients to buy the company's drugs.

Congress included copay requirements in the Medicare program to enforce a check on healthcare costs, including the prices pharmaceutical manufacturers can demand for their drugs. Pfizer's actions allowed the company to hike up drug prices and boost revenue, the Justice Department said.

The settlement comes months after Britain's antitrust regulator fined the New York-based company $107 million for skyrocketing price increases for generic versions of the anti-epilepsy drug Epanutin. Pfizer and drug-distribution company Flynn Pharma hiked prices of the drug by up to 2,600 percent for about 48,000 patients in September 2012.

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Pfizer had transferred its distribution rights to Flynn, which sold the medicine by its generic name, phenytoin sodium. Flynn was fined $6.55 million.

Other drugmakers have been blasted for soaring prices.

In 2015, U.S. pharmaceutical executive Martin Shkreli's Turing Pharmaceuticals bought the rights to Daraprim, a half-century old drug that treats parasitic infection, and raised the price more than 50-fold.

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And Mylan hiked the price of its injectable medication EpiPen to more than $6,000, a six-fold increase from its cost in 2007.

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