BioScrip Inc., a specialty pharmacy, in its role as a pharmacy benefit manager, has agreed to pay $15 million to settle a False Claims Act (FCA) whistleblower suit. It was alleged that the company received kickbacks from Novartis Pharmaceuticals Corp. to push patients to continue using Novartis’ iron reduction drug Exjade. BioScrip agreed to pay the federal government $11.7 million to settle claims that its distribution of Exjade through its legacy specialty pharmacy operations violated the FCA and the Anti-Kickback Statute. The filing of the settlement with the New York Federal Court coincided with a court order unsealing qui tam relator David Kester’s amended complaint, which he filed in April 2013.
BioScrip also has an agreement in principle with the offices of various state attorneys general to settle civil claims that the individual states may bring in connection with the alleged Exjade kickback scheme, the company said in a press release. Under the agreement in principle, BioScrip would pay a total of $3.3 million to the states, plus interest, according to the company. As usual, Elmsford, N.Y.-based BioScrip did not admit any wrongdoing under the terms of the settlement.
Novartis disputes the allegations and says the company will defend itself in the litigation. The company claims it “worked with BioScrip to ensure it had the information needed to reach out to patients.” But according to the government, BioScrip and Novartis engaged in a “kickback scheme relating to the distribution of Exjade from February 2007 to May 2012, resulting in tens of millions of dollars in payments of Exjade claims by Medicare and Medicaid that should not have been reimbursed by those programs.”
BioScrip was one of three specialty pharmacies permitted to dispense Exjade through a contract with Novartis as part of the so-called Exjade Patient Assistance and Support Services (EPASS) Network, the government alleged. The complaint alleged that half of the Exjade prescriptions received by EPASS were not designated for a particular pharmacy by insurers or physicians, and were instead distributed among the three specialty pharmacies by Novartis. As a side note, if you don’t know what a “pharmacy benefit manager” (PBM) really is, and how they operate, you should find out. Also, you should then explore the cozy relationship the PBMs have with Big Pharma.