Amgen, Astellas pay $125M to settle Medicare kickback allegations

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Amgen Inc. and Astellas Pharma will pay a total of $125 million to resolve allegations from the Department of Justice that the pharmaceutical firms violated U.S. law and paid Medicare copays for their own treatments, the agency announced on Thursday.

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The two companies are the latest to face penalties related to a breach of the False Claims Act, which prohibits drugmakers from paying the out-of-pocket costs that some patients face when obtaining prescription medications under the entitlement program.

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The law was passed to help prevent pharmaceutical manufacturers from increasing the price of their treatments and violating the statue “undercuts a key safeguard against rising drug costs,” according to assistant attorney general Jody Hunt.

"These enforcement actions make clear that the government will hold accountable drug companies that directly or indirectly pay illegal kickbacks,” she said in a statement.

TickerSecurityLastChange%Chg
AMGNAMGEN INC.168.43-1.48-0.87%
ALPMYASTELLAS PHARMA INC.13.58-0.07-0.48%

Similar to prior cases, the DOJ claimed that Amgen and Astellas were both sole donors to patient funds that helped patients cover the cost of co-payments.

For Amgen, the foundation was tied to Sensipar, a treatment for secondary hyperparathyroidism, and multiple myeloma drug Kyprolis. Meanwhile, Astellas’ fund was tied to prostate cancer treatment Xtandi.

Thousand Oaks, California-based Amgen will pay $24.75 million, while Japan-based Astellas will pay $100 million in fines.

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Jazz Pharmaceuticals, Lundbeck LLC and Alexion Pharmaceuticals previously paid a total of $122.6 million to settle similar allegations.