Ac­cused of milk­ing the CMS with co-pay kick­backs, J&J's Acte­lion set­tles case for $310M

As the Trump ad­min­is­tra­tion con­tin­ues to pump out new pro­pos­als to guard the Cen­ters of Medicare and Med­ic­aid Ser­vices against high drug prices, its law en­force­ment arm has al­so been busy round­ing up bio­phar­ma com­pa­nies that it says have es­sen­tial­ly bought their ways in­to re­im­burse­ment for their ever-more-ex­pen­sive ther­a­pies.

Acte­lion has been made the lat­est ex­am­ple, hav­ing agreed to pay $360 mil­lion to re­solve kick­back al­le­ga­tions.

Jean-Paul Clozel

The scheme — which vi­o­lat­ed the False Claims Act, ac­cord­ing to the US At­tor­ney’s Of­fice — al­leged­ly took place be­tween 2014 and 2015, when Jean-Paul Clozel was still in charge and be­fore J&J be­gan en­gag­ing in a bid that cul­mi­nat­ed in a $30 bil­lion buy­out in 2017.

Per the al­le­ga­tions, Acte­lion used an as­sis­tance foun­da­tion to cov­er co-pays for thou­sands of Medicare pa­tients tak­ing its drugs for pul­monary ar­te­r­i­al hy­per­ten­sion, in­clud­ing Tr­a­cleer, Ven­tavis, Veletri and Op­sum­it. By foot­ing these re­quired pay­ments, the gov­ern­ment says, the com­pa­ny was in­duc­ing pa­tients to pur­chas­es drugs with oth­er­wise pro­hib­i­tive high prices — and pil­ing up bills for Medicare.

Acte­lion al­so al­leged­ly di­rect­ed Medicare pa­tients who qual­i­fied for its own free drug pro­gram to the foun­da­tion in­stead, fur­ther milk­ing gov­ern­ment re­im­burse­ment.

Im­por­tant­ly, the gov­ern­ment added, Acte­lion bud­get­ed its do­na­tions to the foun­da­tion care­ful­ly to make sure that its con­tri­bu­tion would not cov­er pa­tients tak­ing ri­val PAH drugs. It did so by keep­ing close track of the num­ber of pa­tients the foun­da­tion helped and the amount spent on them.

Joseph Hunt

“Phar­ma­ceu­ti­cal com­pa­nies can­not have it both ways — they can­not con­tin­ue to in­crease drug prices while en­gag­ing in con­duct de­signed to de­feat the mech­a­nisms that Con­gress de­signed to check such prices and then ex­pect Medicare to pay for the bal­loon­ing costs,” said As­sis­tant At­tor­ney Gen­er­al Joseph Hunt of the De­part­ment Jus­tice’s Civ­il Di­vi­sion in a state­ment.

Dur­ing the pe­ri­od cov­ered in the set­tle­ment, US At­tor­ney An­drew Lelling not­ed, “Acte­lion raised the price of its main PAH drug, Tr­a­cleer, by near­ly 30 times the rate of over­all in­fla­tion in the Unit­ed States.”

Car­ing Voice Coali­tion, the med­ical char­i­ty in­volved in the scheme, got in­to trou­bles of its own late last year when the gov­ern­ment re­voked its rights to pro­vide such co-pay as­sis­tance to pa­tients, due to con­cerns about im­prop­er in­flu­ence from drug­mak­ers.

Unit­ed Ther­a­peu­tics, an­oth­er PAH drug­mak­er, set­tled a sim­i­lar probe a month lat­er for $210 mil­lion, one of the first to emerge from an in­dus­try-wide in­ves­ti­ga­tion.

John Hood [file photo]

UP­DATE: Cel­gene and the sci­en­tist who cham­pi­oned fe­dra­tinib's rise from Sanofi's R&D grave­yard win FDA OK

Six years after Sanofi gave it up for dead, the FDA has approved the myelofibrosis drug fedratinib, now owned by Celgene.

The drug will be sold as Inrebic, and will soon land in the portfolio at Bristol-Myers Squibb, which is finalizing a deal to acquire Celgene.

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Ab­b­Vie gets its FDA OK for JAK in­hibitor upadac­i­tinib, but don’t look for this one to hit ex­ecs’ lofty ex­pec­ta­tions

Another big drug approval came through on Friday afternoon as the FDA OK’d AbbVie’s upadacitinib — an oral JAK1 inhibitor that is hitting the rheumatoid arthritis market with a black box warning of serious malignancies, infections and thrombosis reflecting fears associated with the class.

It will be sold as Rinvoq — at a wholesale price of $59,000 a year — and will likely soon face competition from a drug that AbbVie once controlled, and spurned. Reuters reports that a 4-week supply of Humira, by comparison, is $5,174, adding up to about $67,000 a year.

UP­DAT­ED: AveX­is sci­en­tif­ic founder was axed — and No­var­tis names a new CSO in wake of an ethics scan­dal

Now at the center of a storm of controversy over its decision to keep its knowledge of manipulated data hidden from regulators during an FDA review, Novartis CEO Vas Narasimhan has found a longtime veteran in the ranks to head the scientific work underway at AveXis, where the incident occurred. And the scientific founder has hit the exit.

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The top 10 fran­chise drugs in bio­phar­ma his­to­ry will earn a to­tal of $1.4T (tril­lion) by 2024 — what does that tell us?

Just in case you were looking for more evidence of just how important Amgen’s patent win on Enbrel is for the company and its investors, EvaluatePharma has come up with a forward-looking consensus estimate on what the list of top 10 drugs will look like in 2024.

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UP­DAT­ED: Sci­en­tist-CEO ac­cused of im­prop­er­ly us­ing con­fi­den­tial in­fo from uni­corn Alec­tor

The executive team at Alector $ALEC has a bone to pick with scientific co-founder Asa Abeliovich. Their latest quarterly rundown has this brief note buried inside:

On June 18, 2019, we initiated a confidential arbitration proceeding against Dr. Asa Abeliovich, our former consulting co-founder, related to alleged breaches of his consulting agreement and the improper use of our confidential information that he learned during the course of rendering services to us as our consulting Chief Scientific Officer/Chief Innovation Officer. We are in the early stage of this arbitration proceeding and are unable to assess or provide any assurances regarding its possible outcome.

There’s no explicit word in the filing on what kind of confidential info was involved, but the proceeding got started 2 days ahead of Abeliovich’s IPO.

Abeliovich, formerly a tenured associate professor at Columbia, is a top scientist in the field of neurodegeneration, which is where Alector is targeted. More recently, he’s also helped start up Prevail Therapeutics as the CEO, which raised $125 million in an IPO. And there he’s planning on working on new gene therapies that target genetically defined subpopulations of Parkinson’s disease. Followup programs target Gaucher disease, frontotemporal dementia and synucleinopathies.

But this time Abeliovich is the CEO rather than a founding scientist. And some of their pipeline overlaps with Alector’s.

Abeliovich and Prevail, though, aren’t taking this one lying down.

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Chi­na has be­come a CEO-lev­el pri­or­i­ty for multi­na­tion­al phar­ma­ceu­ti­cal com­pa­nies: the trend and the im­pli­ca­tions

After a “hot” period of rapid growth between 2009 and 2012, and a relatively “cooler” period of slower growth from 2013 to 2015, China has once again become a top-of-mind priority for the CEOs of most large, multinational pharmaceutical companies.

At the International Pharma Forum, hosted in March in Beijing by the R&D Based Pharmaceutical Association Committee (RDPAC) and the Pharmaceutical Research and Manufacturers of America (PhRMA), no fewer than seven CEOs of major multinational pharmaceutical firms participated, including GSK, Eli Lilly, LEO Pharma, Merck KGaA, Pfizer, Sanofi and UCB. A few days earlier, the CEOs of several other large multinationals attended the China Development Forum, an annual business forum hosted by the research arm of China’s State Council. It’s hard to imagine any other country, except the US, having such drawing power at CEO level.

As dis­as­ter struck, Ab­b­Vie’s Rick Gon­za­lez swooped in on Al­ler­gan with an of­fer Brent Saun­ders couldn’t say no to

Early March was a no good, awful, terrible time for Allergan CEO Brent Saunders. His big lead drug had imploded in a Phase III disaster and activists were after his hide — or at least his chairman’s title — as the stock price continued a steady droop that had eviscerated share value for investors.

But it was a perfect time for AbbVie CEO Rick Gonzalez to pick up the phone and ask Saunders if he’d like to consider a “strategic” deal.

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CEO Pascal Soriot via Getty Images

As­traZeneca's jug­ger­naut PARP play­er Lyn­parza scoops up an­oth­er dom­i­nant win in PhI­II as the FDA adds a 'break­through' for Calquence

AstraZeneca’s oncology R&D group under José Baselga keeps churning out hits.

Wednesday morning the pharma giant and their partners at Merck parted the curtains on a successful readout for their Phase III PAOLA-1 study, demonstrating statistically significant improvement in progression-free survival for women with ovarian cancer in a first-line maintenance setting who added their PARP Lynparza to Avastin. This is their second late-stage success in ovarian cancer, which will help stave off rivals like GSK.

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ICER blasts FDA, PTC and Sarep­ta for high prices on DMD drugs Em­flaza, Ex­ondys 51

ICER has some strong words for PTC, Sarepta and the FDA as the US drug price watchdog concludes that as currently priced, their respective new treatments for Duchenne muscular dystrophy are decidedly not cost-effective.

The final report — which cements the conclusions of a draft issued in May — incorporates the opinion of a panel of 17 experts ICER convened in a public meeting last month. It also based its analysis of Emflaza (deflazacort) and Exondys 51 (eteplirsen) on updated annual costs of $81,400 and over $1 million, respectively, after citing “incorrect” lower numbers in the initial calculations.