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Drug Co. Settles Kickback Allegations for $12.6M

The cancer drug maker denies any wrongdoing.

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DOVER, Del. (AP) — A Delaware pharmaceutical company has agreed to pay $12.6 million to resolve allegations that it violated the federal False Claims Act by paying kickbacks.

Department of Justice officials said in a news release Tuesday that the settlement resolves allegations that Incyte Corp. improperly used an independent foundation to cover the copays of certain people taking the company’s cancer drug Jakafi from November 2011 to December 2014. Jakafi is approved to treat a bone marrow cancer called myleofibrosis.

Authorities said Incyte was the sole donor to a fund that was opened in November 2011 to assist only myleofibrosis patients. Government officials alleged that after the fund opened, Incyte used it to pay the copays of federal beneficiaries taking Jakafi who were ineligible for assistance from the fund because they did not have myleofibrosis.

Incyte said in a prepared statement that it denies any wrongdoing, and that the settlement agreement is not an admission of liability.

“This resolution simply reflects Incyte’s desire to put this matter behind it and to continue to prioritize the health and wellbeing of individuals with serious life-threatening conditions,” the company said.

The settlement resolves whistleblower claims that were filed in the Eastern District of Pennsylvania by Justin Dillon, a former Incyte compliance executive. Dillon will receive about $3.6 million of the settlement recovery.

Federal authorities said Incyte managers pressured the foundation to provide economic assistance to the ineligible patients, and that Incyte’s contractor helped ineligible patients complete applications for assistance. The scheme resulted in Incyte causing false claims for Jakafi to be submitted to the Medicare and TRICARE, the federal health care program for military members, officials said.

Incyte said it had followed guidance issued by the U.S. Department of Health and Human Services Office of Inspector General, and that the company “believes that it complied with the HHS-OIG guidance, did not violate the law and did not have any intention to do so.”

Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying money or any other thing of value to induce federally covered beneficiaries to purchase the company’s drugs.

Incyte, which is headquartered in Wilmington, has about 1,900 employees worldwide. Gov. John Carney has described the company, which has received millions of dollars in state subsidies, as “a real Delaware success story.”

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