RICO: Offering Co-Pay Coupons Does Not Constitute A Racketeering “Enterprise,” Rules Federal Court

Pharmaceutical manufacturer co-payment coupons have come under a lot of scrutiny recently. HHS-OIG recently warned these coupons may violate the anti-kickback statute if they encourage the purchase of Medicare Part D drugs. Manufacturers seem to be safe, however, from co-pay challenges under RICO—the federal Racketeer Influenced and Corrupt Organizations Act which was originally enacted to combat organized crime. Last week, a Federal Court judge dismissed an insurance company’s claim that they overpaid for drugs in which Abbott Laboratories and Abbvie allegedly committed mail and wire fraud by offering co-pay coupons for their brand name drugs. The Court did not find that a racketeering “enterprise” existed between the companies and the pharmacies distributing the drugs. Manufacturers routinely offer copayment coupons to reduce or eliminate the cost of patients' out-of-pocket payment for specific brand name drugs. Abbot and Abbvie manufacture and market two brand names, Humira and AndroGel. Humira treats rheumatoid arthritis and plaque psoriasis; AndroGel is a replacement therapy for men with low testosterone. In 2008, the companies began offering coupons that discount patients’ co-pays for these drugs to, among other things, increase the sales of Humira and AndroGel by encouraging patients to choose brand names over less costly generics. Insurance companies are not as big of fans of this process as patients and companies. In New England Carpenters Healt...
Source: Policy and Medicine - Category: American Health Authors: Source Type: blogs