Foundation to Pay $4M to Settle Kickback Allegations

The Assistance Fund is the third foundation to settle allegations of conspiring with drug makers.

An Orlando-based foundation will pay the federal government $4 million to settle allegations that it funneled kickbacks from three drug companies to induce Medicare patients to use the companies' multiple sclerosis drugs, the Department of Justice said.  

According to federal prosecutors in Boston, The Assistance Fund was supposed to be open to any Medicare patient with multiple sclerosis. Instead, a DOJ complaint alleged that TAF conspired with MS drug makers Teva, Biogen, and Novartis to use the fund as a conduit for money from those manufacturers to patients taking their MS drugs.

"The conspiracy enabled the pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their MS drugs," DOJ said. "The conspiracy also minimized the possibility that the companies’ money would go to patients taking competing MS drugs made by other companies."

The $4 million settlement was based on an analysis of TAF's ability to pay after review of its financial condition, DOJ said.

TAF is the third foundation to settle allegations of kickbacks in the last month. The other two foundations – Chronic Disease Fund, Inc. doing business as Good Days from CDF, and Patient Access Network Foundation – paid $2 million and $4 million, respectively, to resolve the alleged violations of the False Claims Act, federal prosecutors in Boston said.  

The federal government has also collected more than $840 million in total from eight pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas and Amgen) to resolve kickback allegations linked to the foundation schemes. 

Under the federal Anti-Kickback Statute, drug makers are prohibited from paying, directly or indirectly, any remuneration to induce Medicare patients to purchase the companies’ drugs.

The statute also prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute.

"TAF cared more about helping its big pharma donors make money than about helping individual patients in need of life changing assistance," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.  

TAF, which describes itself as an independent charitable patient assistance foundation, issued a statement claiming that the kickback allegations occurred under previous management.

"TAF will continue its normal operations, pursuing its work to help patients and families facing high medical out-of-pocket costs by providing financial assistance for their copayments, coinsurance, deductibles, and other health-related expenses," the company said.

Over the past decade, TAF said it has provided financial help to more than 78,000 people living with live-threatening and chronic diseases through its 60 disease programs.  

TAF also entered a three-year Integrity Agreement with the Department of Health and Human Services Office of the Inspector General that requires, among other things, that TAF implement measures designed to ensure its independence, and that its interactions with drug maker donors are legal.