The United States filed a complaint under the False Claims Act (FCA) against Regeneron Pharmaceuticals. The complaint alleges that Regeneron fraudulently inflated Medicare reimbursement rates for Eylea by knowingly submitting false average sales price reports to CMS that excluded certain price concessions. In particular, the complaint alleges that Regeneron knowingly failed to report price concessions in the form of credit card processing fees that Regeneron paid to specialty drug distributors to benefit its customers. According to the complaint, Regeneron paid these credit card fees so that distributors would accept credit cards for Eylea purchases while still charging a lower, cash price for the drug, so that Regeneron’s customers — typically retina and ophthalmic practices — could receive credit card benefits for their purchases, such as cash back and other credit card rewards.
Regeneron released a response in which the company said it “believes the complaint is meritless and illustrates a fundamental misunderstanding by the DOJ of drug price reporting standards. Regeneron will vigorously defend this case in court. The filing of this lawsuit will not change our practices with respect to reimbursement of credit card fees incurred by our distributors. Reimbursing credit card service fees to distributors is not a price concession and does not affect Eylea’s price. Congress has provided by statute how to calculate ASP. The statute requires manufacturers to include a specific list of price concessions in ASP. Credit card service fees are not included on that list. The Centers for Medicare & Medicaid Services has not exercised its rulemaking authority to define credit card service fees as a price concession under the statute.”
Regeneron added that Bona fide service fees are not included in ASP per applicable statute and regulation. The company says it is reimbursing distributors for credit card service fees incurred by the distributors performing services on Regeneron’s behalf, and such fees are thus bona fide service fees that do not reduce the ASP for a drug.
