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.

Tar­get­ing a Po­ten­tial Vul­ner­a­bil­i­ty of Cer­tain Can­cers with DNA Dam­age Re­sponse

Every individual’s DNA is unique, and because of this, every patient responds differently to disease and treatment. It is astonishing how four tiny building blocks of our DNA – A, T, C, G – dictate our health, disease, and how we age.

The tricky thing about DNA is that it is constantly exposed to damage by sources such as ultraviolet light, certain chemicals, toxins, and even natural biochemical processes inside our cells.¹ If ignored, DNA damage will accumulate in replicating cells, giving rise to mutations that can lead to premature aging, cancer, and other diseases.

Roivant par­lays a $450M chunk of eq­ui­ty in biotech buy­out, grab­bing a com­pu­ta­tion­al group to dri­ve dis­cov­ery work

New Roivant CEO Matt Gline has crafted an all-equity upfront deal to buy out a Boston-based biotech that has been toiling for several years now at building a supercomputing-based computational platform to design new drugs. And he’s adding it to the Erector set of science operations that are being built up to support their network of biotech subsidiaries with an eye to growing the pipeline in a play to create a new kind of pharma company.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

The fu­ture of mR­NA, J&J's vac­cine ad­comm, Mer­ck­'s $1.85B au­toim­mune bet and more

Welcome to the third installment of Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

If this report was helpful in recapping it all for you, please do share it with your colleagues.

Get ready for FDA’s third Covid-19 vaccine

On the heels of a ringing endorsement from FDA reviewers earlier in the week, J&J‘s single-dose vaccine — which proved 66% effective at preventing symptomatic Covid-19, and 85% effective at stopping severe disease 28 days after administration — the advisory committee convened by the agency voted unanimously to recommend its emergency use authorization. It was “a relatively easy call,” according to one of the committee members — although that doesn’t mean they didn’t have questions. Jason Mast has the highlights from the discussion, including new information from the company, on this live blog.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 102,100+ biopharma pros reading Endpoints daily — and it's free.

Doug Ingram (file photo)

Why not? Sarep­ta’s third Duchenne MD drug sails to ac­cel­er­at­ed ap­proval

Sarepta may be running into some trouble with its next-gen gene therapy approach to Duchenne muscular dystrophy. But when it comes to antisense oligonucleotides, the well-trodden regulatory path is still leading straight to an accelerated approval for casimersen, now christened Amondys 45.

We just have to wait until 2024 to find out if it works.

Amondys 45’s approval was unceremonious, compared to its two older siblings. There was no controversy within the FDA over approving a drug based on a biomarker rather than clinical benefit, setting up a powerful precedent that still haunts acting FDA commissioner Janet Woodcock as biotech insiders weighed her potential permanent appointment; no drama like the FDA issuing a stunning rejection only to reverse its decision and hand out an OK four months later, which got more complicated after the scathing complete response letter was published; no anxious tea leaf reading or heated arguments from drug developers and patient advocates who were tired of having corticosteroids as their loved ones’ only (sometimes expensive) option.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 102,100+ biopharma pros reading Endpoints daily — and it's free.

Fol­low biotechs go­ing pub­lic with the End­points News IPO Track­er

The Endpoints News team is continuing to track IPO filings for 2021, and we’ve designed a new tracker page for the effort.

Check it out here: Biopharma IPOs 2021 from Endpoints News

You’ll be able to find all the biotechs that have filed and priced so far this year, sortable by quarter and listed by newest first. As of the time of publishing on Feb. 25, there have already been 16 biotechs debuting on Nasdaq so far this year, with an additional four having filed their S-1 paperwork.

Steve Cutler, Icon CEO (Icon)

In the biggest CRO takeover in years, Icon doles out $12B for PRA Health Sci­ences to fo­cus on de­cen­tral­ized clin­i­cal work

Contract research M&A had a healthy run in recent years before recently petering out. But with the market ripe for a big buyout and the Covid-19 pandemic emphasizing the importance of decentralized trials, Wednesday saw a tectonic shift in the CRO world.

Icon, the Dublin-based CRO, will acquire PRA Health Sciences for $12 billion in a move that will shake up the highest rungs of a fragmented market. The merger would combine the 5th- and 6th-largest CROs by 2020 revenue, according to Icon, and the merger will set the newco up to be the second-largest global CRO behind only IQVIA.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 102,100+ biopharma pros reading Endpoints daily — and it's free.

With dust set­tled on ac­tivist at­tack, Lau­rence Coop­er leaves Zio­pharm to a new board

Laurence Cooper has done his part.

In the five years since he left a tenured position at Houston’s MD Anderson Cancer Center to become CEO of Boston-based Ziopharm, he’s steered the small-cap immunotherapy player through patient deaths in trials, clinical holds, short attacks and, most recently, an activist attack on the board.

So when the company has “fantastic news” like an IND clearance for a TCR T cell therapy program, he’s ready to pass on the baton.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 102,100+ biopharma pros reading Endpoints daily — and it's free.

S&P ex­pects steady ero­sion in Big Phar­ma's cred­it pro­file in 2021 as new M&A deals roll in — but don't un­der­es­ti­mate their un­der­ly­ing strength

S&P Global has taken a look at the dominant forces shaping the pharma market and come to the conclusion that there will be more downgrades than upgrades in 2021 — the 8th straight year of steady decline.

But it’s not all bad news. Some things are looking up, and there’s still plenty of money to be made in an industry that enjoys a 30% to 40% profit margin, once you factor in steep R&D expenses.

Ken Frazier, Merck CEO (Bess Adler/Bloomberg via Getty Images)

UP­DAT­ED: Mer­ck takes a swing at the IL-2 puz­zle­box with a $1.85B play for buzzy Pan­dion and its au­toim­mune hope­fuls

When Roger Perlmutter bid farewell to Merck late last year, the drugmaker perhaps best known now for sales giant Keytruda signaled its intent to take a swing at early-stage novelty with the appointment of discovery head Dean Li. Now, Merck is signing a decent-sized check to bring an IL-2 moonshot into the fold.

Merck will shell out roughly $1.85 billion for Pandion Pharmaceuticals, a biotech hoping to gin up regulatory T cells (Tregs) to treat a range of autoimmune disorders, the drugmaker said Thursday.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 102,100+ biopharma pros reading Endpoints daily — and it's free.