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Analysis

Patient Services Inc. to Pay $3M for Alleged Role as Illegal Conduit for Drug Makers

By John Commins  
   January 22, 2020

PSI coordinated with three pharmaceutical manufacturers – Insys, Aegerion, and Alexion – to facilitate paying kickbacks to Medicare patients taking their drugs.

The not-for-profit Patient Services Inc. foundation will pay $3 million to resolve allegations that it acted as a conduit that paid Medicare patients illegal kickbacks from drug makers, the Department of Justice said.

"Pharmaceutical companies cannot use foundations to funnel drug co-payments disguised as routine charitable donations, all to prop up excessive drug prices," Andrew E. Lelling, U.S. Attorney for the District of Massachusetts.

"PSI allegedly operated as a vehicle for specific pharmaceutical companies essentially to pay kickbacks at the ultimate expense of the American taxpayers who support the Medicare program," Lelling said.

DOJ said the amount of the settlement was based on PSI's ability to pay. 

HealthLeaders' attempts to contact PSI for comment on Wednesday were not successful.

The government alleged that Midlothian, Virginia-based PSI coordinated with three pharmaceutical manufacturers – Insys, Aegerion, and Alexion – to facilitate paying kickbacks to Medicare patients taking their drugs, which are violations of the False Claims Act.

"PSI allegedly worked with these companies to design and operate certain funds that funneled money from the companies to patients taking the specific drugs the companies sold," DOJ said "These schemes allegedly minimized the possibility that the companies' contributions to the funds would go to patients taking competing drugs made by other companies and undermined the nature of these contributions as bona fide donations."

The three drug makers in April 2019 entered into settlement agreements with DOJ totaling $122 million.  

“Pharmaceutical companies cannot use foundations to funnel drug co-payments disguised as routine charitable donations, all to prop up excessive drug prices.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Photo credit: Mark Van Scyoc / Shutterstock.com


KEY TAKEAWAYS

DOJ said the amount of the settlement was based on PSI's ability to pay.

Insys, Aegerion, and Alexion in April 2019 entered into settlement agreements with DOJ totaling $122 million.


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