Pfizer loses closely watched court case on kickbacks and subsidizing drugs
A New York district court on Thursday knocked back Pfizer’s plan to subsidize the cost of one of its rare disease drugs for some Medicare beneficiaries.
Pfizer had attempted to convince the court that it should be able to help patients overcome a financial barrier to obtain appropriately prescribed medication they desperately need, which in this case was the company’s rare disease drug tafamidis, which comes with a $225,000 list price for a single year’s supply.
“While there may be an administrative or legislative remedy to the problems Pfizer seeks to correct here, the remedy does not lie with the Court,” Mary Kay Vyskocil, a judge of the US District Court for the Southern District of New York, wrote in her opinion. “Because the stated intent of the payments Pfizer proposes here are to increase the number of Medicare beneficiaries who purchase the drug, the Court is unable to issue the declaratory judgment Pfizer seeks or to issue judgment in its favor.”
She also makes clear the law governing kickbacks prohibits knowingly and willfully providing remuneration which is intended to induce a purchase of medical treatments or services.
“While the statute is broad, that alone does not mandate that the Court must endorse a narrower reading,” Vyskocil wrote.
The case was closely watched as government lawyers previously warned of a “gold rush” of similar subsidies from biopharma companies if the court had ruled in Pfizer’s favor.
Since 2005, OIG has always been clear that where a drugmaker provides financial help, there’s a high risk for fraud and abuse, meaning the companies could end up paying people to take their drugs.
And Pfizer understands the system well. Back in 2018, the company agreed to pay $23.85 million to settle allegations that the company violated the False Claims Act by paying kickbacks to Medicare patients through a purportedly independent charitable foundation.
Jennifer Michael, a member of the law firm Bass, Berry and Sims with a focus on the anti-kickback statute, told Endpoints News that the end result is not surprising, and the court was very clear that they were not going to adopt Pfizer’s interpretation of the anti-kickback statute. But she said the opinion left open some room for other companies to challenge unfavorable HHS opinions in the future, although it’s unlikely that manufacturers would move forward with new copay assistance programs as a result of this opinion.