Dompé U.S. Agrees to Pay $32 Million to Resolve Kickback Allegations Involving Patient Assistance Foundations

BOSTON – Dompé U.S., Inc. (Dompé), based in California, has agreed to pay $32 million to resolve allegations that, between 2018 and 2021, it paid Medicare beneficiary co-payments through two patient assistance foundations to induce the purchase of its drug, Oxervate, in violation of the Anti-Kickback Statute and the False Claims Act. When a Medicare beneficiary obtains a prescription drug covered by Medicare Part B or Part D, the beneficiary is often required to make a partial payment, which may take the form of a co-payment, co-insurance, or deductible (collectively “co-pays”). These co-pay obligations may be substantial for expensive medications. Congress included co-pay requirements in these programs, in part, to encourage market forces to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration – which includes money or any other thing of value – to induce Medicare patients to purchase the companies’ drugs. Dompé admitted that, around the time of Oxervate’s 2018 launch in the United States, Dompé U.S. employees expressed reservations about launching the drug before making a payment to a patient assistance foundation that paid the co-pays for Oxervate. After conversations with Dompé employees, two foundations opened funds that, among other things, paid co-pays for Oxervate, and Dompé made contributions to those foundations. Between 2019 and 2021, despite having an annual budgeting process for contributions, Dompé sometimes approved mid-year increases to those foundations or held certain amounts in “reserve” so that it could determine mid-year which of the foundations were running low on funding and allocate the “reserve” accordingly. Dompé also solicited patient assistance foundation data directly from the foundations, and from the specialty pharmacy that provided hub services to Dompé U.S. patients. Certain Dompé employees involved in the patient assistance foundation budgeting process received this data through either direct or indirect means. “Kickbacks to beneficiaries undermine the purpose of the Medicare co-pay system and drive up the cost of drugs,” said United States Attorney Leah B. Foley. “My Office has recovered over $1.4 billion for taxpayers through settlements and enforcement actions concerning drug company kickbacks to purported charities, and we will continue to pursue these matters to ensure that all drug companies play by the rules and to protect federal taxpayer funded healthcare programs.” “This settlement demonstrates the United States’ commitment to enforcing the Anti-Kickback Statute and ensuring that pharmaceutical manufacturers do not use unlawful inducements,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department encourages companies that uncover improper kickbacks to self-disclose such conduct.” “Pharmaceutical manufacturers that attempt to disguise kickbacks as charitable patient assistance are engaging in blatant misconduct which corrupts medical decision‑making and drains federal health care programs,” said Acting Deputy Inspector General for Investigations Miranda L. Bennett of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Dompé’s actions undermined critical safeguards Congress put in place to protect Medicare, driving up costs for taxpayers while exploiting patients. HHS-OIG does not tolerate such conduct and will continue to work tirelessly for justice and accountability.” Dompé is the U.S. subsidiary of Dompé farmaceutici S.p.A., a pharmaceutical company incorporated in Italy. Dompé farmaceutici voluntarily self-disclosed this conduct to the U.S. Attorney’s Office in Massachusetts, which Dompé U.S. discovered following an internal compliance review. Following the voluntary disclosure, both Dompé farmaceutici and Dompé U.S. fully cooperated with the government in this matter. By 2022, Dompé implemented changes to its patient assistance foundation contribution practices.