Did Ultragenyx Confuse Its Drug Crysvita With Kris Kringle? Drug Maker Settles Alleged Kickback Allegations
Kickback

Did Ultragenyx Confuse Its Drug Crysvita With Kris Kringle? Drug Maker Settles Alleged Kickback Allegations

01/22/2024

Just days prior to Christmas in 2023, Ultragenyx Pharmaceutical Inc. (“Ultragenyx”) agreed to pay the U.S. government $6 million to resolve allegations that it caused the submission of false claims to Medicare and Medicaid, in violation of the False Claims Act.

In connection with the settlement, which arose from allegations under the False Claims Act brought by a whistleblower, the Relator, Lisa Ruggiero, Ultragenyx admitted that:

  1. It understood that, in some cases, a positive genetic test for a genetic mutation consistent with X-linked hypophosphatemia (“XLH”) would be required for an insurer (including Medicare or Medicaid) to reimburse Crysvita prescribed to a patient, or for a healthcare provider (“HCP”) to make a definitive diagnosis of XLH and prescribe Crysvita.
  2. Ultragenyx entered into an arrangement with a genetic testing laboratory (“Laboratory”) whereby Ultragenyx paid the Laboratory to conduct these tests—at no cost to HCPs or patients—and provide the results to the HCP. Ultragenyx separately paid the Laboratory to provide test results back to Ultragenyx and its commercial team used the results, in part, to find potential Crysvita patients and their HCPs for follow up Crysvita marketing efforts. Ultragenyx referred to this program as its “sponsored” XLH testing program.
  3. Ultragenyx sales personnel discussed the XLH testing program with HCPs and delivered order forms for the tests to HCP offices. The test results Ultragenyx received did not contain patient names but did contain the name of the HCP who ordered the test, a de-identified patient ID number, the date the test was ordered, and—once ready—the test result itself (collectively, “Results Reports”). Until April 2022, Ultragenyx received Results Reports and disseminated this information to its sales force with instructions to make sales calls for Crysvita to HCPs who ordered a test or, in particular, who had a patient with a positive test result. Ultragenyx’s sales  force followed up with HCPs regarding test results.

Although Ultragenyx admitted to the above facts, it entered into the settlement without admitting that it violated the law; as a result, the government’s (and the Relator’s) claims are allegations only, there having been no determination of liability.

Discussion

In the context of the allegations aimed at Ultragenyx, the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b (“AKS”), prohibits drug companies from knowingly and willfully paying remuneration to induce a person to:  (1) refer an individual to a person for the furnishing, or arranging for the furnishing, of any Medicare or Medicaid-reimbursed drug; or (2) to purchase or order, or arrange for the purchasing or ordering, of any Medicare or Medicaid-reimbursed drug.

Underlying the Ultragenyx situation were allegations that the free tests, free to the patients and to the healthcare providers, that is, were inducements to those individuals and entities.

Because the AKS equally criminalizes the receipt of remuneration to induce referrals, its possible that the DOJ and state attorneys general could pursue the healthcare providers on the other side of the transaction.

Just as the post, OIG Permits Deferred Payment Physician Partner Buyout illustrates how potential AKS traps lie within internal business arrangements, the allegations surrounding Ultragenyx demonstrate the AKS issues within arrangements that, to many, are difficult to envision as being referrals.

Just because they’re hard to envision doesn’t mean that referrals within the scope of the AKS don’t exist.

Actionable Takeaways for You

Analyze: Any potential arrangement must be analyzed carefully because the AKS is a criminal statute, the violation of which can lead to fines, civil penalties, whistleblower lawsuits, exclusion as a provider, and imprisonment.

Structure: Any deal must be structured in compliance with the AKS, Stark, and numerous other federal laws, as well as with various state law counterparts and other restrictions. Your investment in structuring things correctly is an investment in yourself and your jail-free future.

Audit: No matter how well structured, it’s essential that you engage in periodic compliance audits coordinated through legal counsel. Laws change and actual behavior impacts all of the structure and planning. Even the best planning can be made worthless if illegal conduct takes place within the context of what was planned to be a proper structure.

Investigations: If you learn that you (or any person or entity connected to the operation) are under investigation, immediately engage a team of experienced healthcare attorneys and criminal defense counsel. Many potential prosecutions are resolved at this stage.

Indictment: Again, immediately engage a defense team of healthcare and criminal defense counsel.



Leave a Reply