Benzinga - by Vandana Singh, Benzinga Editor.
The U.S. Justice Department has leveled allegations against Regeneron Pharmaceuticals (NASDAQ:REGN), accusing the company of manipulating Medicare’s drug-pricing system for its macular degeneration drug, Eylea (aflibercept).
In a federal court complaint filed in Boston, the department claims that Regeneron inflated the average sales price of Eylea, a move that significantly impacted Medicare expenses.
According to the lawsuit, Reuters highlighted that Regeneron purportedly failed to disclose substantial payments to drug distributors to subsidize Eylea’s purchases.
These payments ensured that distributors accepted credit card payments for the drug while offering lower prices to physicians and retina practices.
Related: Median Drug Prices For Rare Diseases Hit $300K In 2023, Report Highlights Lack of Clear Rationale Behind Escalating Drug Prices.
Eylea is approved by the FDA for treating various eye-related conditions, including wet age-related macular degeneration.
In 2023, Regeneron recorded Eylea HD and Eylea US sales of $5.9 billion.
The medication, with a wholesale acquisition cost of $1,850 per vial, has been a significant expense for Medicare, amounting to over $25 billion in payments from 2012 to 2023.
The lawsuit alleges that Regeneron’s failure to report all price concessions for Eylea violates the False Claims Act, resulting in inflated Medicare costs.
Acting U.S. Attorney Joshua Levy of Massachusetts emphasized that Regeneron’s actions greatly inflated Medicare costs and boosted its revenues.
Another ongoing lawsuit from 2020 accused the company of using a charity to pay kickbacks for Eylea usage among Medicare patients, an accusation Regeneron denies.
The current case originated from a whistleblower lawsuit filed in 2020 by former Regeneron employees operating under the False Claims Act, which allows whistleblowers to sue on behalf of the government to recover funds based on false claims.
Read Next: FDA Delays Decision For Regeneron’s Inaugural Blood Cancer Therapy, Highlights Trial Concerns.
Price Action: REGN shares are down 1.44% at $922.75 on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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