Hagens Berman filed class action complaints alleging that Regeneron engaged in an illegal scheme wherein it donated to a so-called “charity” for it to offer out-of-pocket financial assistance to the plaintiff’s insureds for purchasing the drug Eylea. The complaints allege that the “donations” in fact were illegal kickbacks to steer patients and their prescribers away from cheaper comparable drugs to the significantly more expensive Eylea.
ALLEGATIONS AGAINST REGENERON
Hagens Berman filed class-action complaints on behalf of Medical Mutual of Ohio and Local 464A United Food and Commercial Workers Union Welfare Service Benefit Fund, and on behalf a class of all similarly situated third-party payors.
The lawsuit alleges the FDA approved Eylea to treat wet Age-related Macular Degeneration (wet AMD), Regeneron Pharmaceuticals, the case’s defendant manufactured and sold the drug. Between 2012 and 2020, Eylea cost about $1,850 per treatment, compared to about $55 per treatment for its key competitor drug, Avastin. The complaint alleges that despite the enormous price differential, Regeneron managed to build Eylea’s market dominance, and it maintained its exorbitant price through an illegal scheme that directly injured MMO and other health insurance plans.
CHARITY SCHEME KICKBACKS
The lawsuit states that beginning in 2012, Regeneron and the Chronic Disease Fund (CDF), a purported “charity,” entered into a scheme to thwart price competition and to inflate artificially the cost health plans such as MMO paid for Eylea.
Pursuant to the scheme, Regeneron allegedly claimed to donate funds to CDF to provide financial assistance to patients for their out-of-pocket share of wet-AMD treatment costs. However, Regeneron and CDF allegedly colluded to ensure that only patients on Eylea qualified for the financial assistance.
The complaint states that this Eylea prescription assistance drove patients and prescribers to Eylea from comparable, but less expensive, wet AMD drugs. Despite the enormous price differential, that assistance desensitized patients and physicians to the true cost of Eylea, because Regeneron’s donations through the charity sham reduced or eliminated patients’ out-of-pocket costs. The complaint alleges that these donations constituted illegal kickbacks, i.e., providing incentive payments for patients to choose Eylea over less expensive competing drugs.
ARTIFICIAL MARKET DEMAND FOR EYLEA
The complaint alleges that through the Regeneron/CDF charity scheme, Regeneron artificially increased market demand for Eylea and maintained the artificially high prices that MMO and other health plans paid for the drug. The illegal scheme resulted in Eylea sales skyrocketing, with Regeneron’s revenues for Eylea hitting $5 billion in 2020, the lawsuit states. Meanwhile, MMO and other health plans paid millions in overcharges for Eylea resulting from the scheme.
MMO brings this action under the federal Racketeer Influenced and Corrupt Organizations Act and under state laws governing fraudulent concealment, tortious interference with contractual relationships, unjust enrichment, and unfair and deceptive trade practices.
TOP PHARMA LAW FIRM
Hagens Berman is one of the most successful litigation law firms in the U.S. taking on pharmaceutical companies and has achieved more than $320 billion in settlements against Big Pharma largest sellers and manufacturers for antitrust schemes, pay-for-delay, IP shams and other forms of wrongdoing that drive up the costs of prescription drugs for consumers and others.