RICO Class Action Alleges Actelion Schemed to Raise Prices of Blood Pressure Meds

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Actelion Pharmaceuticals faces a proposed class action lawsuit that alleges the company has illegally schemed to raise the unit price and quantity dispersed of certain high blood pressure drugs, causing Medicare Advantage and Medicaid health plans—and, consequently, their patients—to pay artificially high prices for the life-saving treatments. 

The 84-page RICO complaint against Actelion, Caring Voice Coalition (CVC) and CVC successor Adira Foundation alleges the entities have worked together to circumvent congressionally mandated co-payment requirements designed to combat the ever-increasing prices of Actelion’s pulmonary arterial hypertension drugs, including Tracleer, Opsumit, Veletri and Ventavis. 

According to the case, the defendants executed their scheme through “numerous overt acts” that effectively eliminated price sensitivity for Medicare Advantage and Medicaid patients by covering the cost of their co-payments. This allowed Actelion to spike prices “without concern of their product not being dispensed due to patient financial restrictions,” leading to the over-dispensing of “supra-competitively priced drugs,” the suit alleges. 

More specifically, Actelion and CVC “colluded and agreed” that the latter would “act as an illegal conduit, disguised as an independent charity,” through whom Actelion could funnel “kickbacks” to pharmacies, the suit claims. Per the case, the two defendants allegedly agreed that CVC would create a pulmonary arterial hypertension fund that would cater exclusively or near-exclusively to patients taking Actelion’s drugs, and that the company would be the fund’s sole donor. Through the fund, CVC would pay the co-payment obligations for Medicare Advantage and Medicaid patients who otherwise may not have been able to afford their portion of the cost. With price sensitivity eliminated, pharmacies could dispense more of the drugs and Actelion could raise their prices while federal health care programs were left to foot the bill, the lawsuit alleges. 

Essentially, Actelion “bribed” CVC to serve as a middleman to funnel kickbacks to pharmacies, the lawsuit alleges. The filing claims Actelion’s bribes to CVC and the defendants’ essentially illegal payments to federal healthcare program beneficiaries are violations of the federal Anti-Kickback Statute, which “makes it a crime to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce a person to purchase or recommend any good, service, or item covered under a federal health care program.” 

Further, the case says Actelion routinely obtained data from CVC detailing the number of patients who were taking its drugs, CVC’s spending on those patients and how much it expected to spend on them in the future. This information was allegedly used to ensure that CVC used Actelion’s donations for only the company’s drugs while allowing Actelion to perform “return on investment calculations.” 

The lawsuit also alleges the defendants funneled Medicare Advantage and Medicaid Plan patients away from Actelion’s free drug program because they were “eligible for participation in federal health programs.” 

“In other words,” the case says, “Defendants treated customers differently based on eligibility for participation in the federal health programs.” 

According to the suit, Actelion ensured that large sums of money would continuously be paid to CVC, improperly influencing the group’s actions. Likewise, the lawsuit says, the defendant ensured that co-payment assistance grants, paid for and facilitated by Actelion and distributed by CVC, also improperly influenced patients’ receipt of and/or pharmacies’ dispensing of the Actelion blood pressure drugs. 

“In doing so, Defendants eliminated the effects of price sensitivity—because the patients (i.e., consumers) were no longer incurring any cost—thereby eliminat[ing] price considerations, thus artificially increasing the quantity dispensed by pharmacies, and the amount of claims paid by Assignors and Class Members for Actelion Drugs. Accordingly, with price sensitivity eliminated, the Co-Payment Scheme allowed Actelion to circumvent congressional safeguards and artificially increase the price of Actelion Drugs for all prescriptions to supra-competitive levels.” 

The complaint relays that Actelion in December 2018 paid $360 million to settle federal claims that it violated the Anti-Kickback Statute and False Claims Act. The Department of Justice’s allegations against the pharmaceutical company are related to the conduct alleged in the instant proposed class action, and Actelion did not address or settle damages allegedly sustained by the proposed class members, the case says. 

“The improper actions alleged here have allowed Actelion to maintain supra-competitive prices by eliminating price sensitivity that would have directly benefited consumers and the public at large,” the lawsuit reads. “Price sensitivity counterbalances Actelion’s desire to inflate prices for medically necessary drugs—which is why Congress relies on price sensitivity as a vital mechanism for combating supra-competitive pricing for Government payors.” 

The plaintiffs behind the case are companies that obtained assignments from entities (assignors) who provide health insurance coverage pursuant to Medicare Part C and Part D and Medicaid on behalf of enrollees. The assignors ultimately became financially responsible for the cost of the “illegally inflated and excessively dispensed” Actelion drugs at issue, the filing claims. 

The lawsuit looks to cover: 

“All Medicare Advantage Organizations, Medicaid Managed Care Organizations, and at-risk, first-tier, and downstream entities in the United States and its territories that from at least January 1, 2014 through present, pursuant to Medicare and/or Medicaid contracts offering Medicare and Medicaid benefits, provided services, purchased Subject Actelion Drugs, provided reimbursement, or possess the recovery rights to reimbursement for some or all of the purchase price of the Actelion Drugs resulting from CVC’s or Adira’s co-payment assistance”;

And: 

“All self-funded, third-party payors and related entities in the United States and its territories that from at least January 1, 2014 through present, provided services, purchased the subject pharmaceuticals, provided reimbursement, or possess the recovery rights to reimbursement for some or all of the purchase price of Actelion Drugs resulting from CVC’s or Adira’s co-payment assistance.” 

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