Colorado joins lawsuit against Regeneron over alleged fraudulent drug price reporting for eye medication

Aug. 1, 2024 (DENVER)—The attorneys general for Colorado, Georgia, Michigan, North Carolina, Texas, and Washington have filed suit in federal district court against Regeneron Pharmaceuticals, a New York-based pharmaceutical company, for allegedly inflating the amount that the states’ Medicaid programs have paid and continue to pay for the eye medication Eylea. The scheme resulted in the submission of tens of thousands of false claims to Medicaid and millions of dollars in losses to the states, the complaint alleges.

“Companies that defraud Medicaid are undermining health care services and cheating the public,” said Attorney General Phil Weiser. “We are committed to holding such companies accountable and protecting Colorado health care funds.”

Regeneron manufactures and sells Eylea, an FDA-approved drug used to treat forms of macular degeneration and other ophthalmological conditions. Medicaid is a joint federal-state program that provides health care benefits, including prescription drug coverage for drugs like Eylea, to qualified people, including low-income individuals and families, the elderly, and people with disabilities. Between 2013 and 2023, the Medicaid programs for Colorado, Georgia, Michigan, North Carolina, Texas, and Washington collectively spent over $175 million on Eylea. In determining the reimbursement rate for each claim submitted for Eylea, each of these state’s Medicaid programs relied on the Average Sales Price (ASP) reported by Regeneron to the federal Centers for Medicare and Medicaid Services.

The complaint alleges that Regeneron was required to include all price concessions for Eylea as part of its ASP reporting to CMS, but knowingly failed to include credit card processing fees that Regeneron paid its distributors to allow distributors to charge customers a lower effective price for Eylea. The states allege that Regeneron paid these credit card fees so that doctors and retina practices that purchased Eylea could use credit cards at no additional cost and obtain hundreds of millions of dollars in “cash back” rewards. By knowingly failing to report these credit card processing fees as price concessions, Regeneron falsely inflated each state’s Medicaid reimbursement for Eylea, accordingly to the complaint.

The lawsuit, filed June 25 in the U.S. District Court for the District of Massachusetts, originated as a whistleblower case in which the U.S. Department of Justice has already sued under the federal False Claims Act. The states seek monetary damages and penalties under each of their respective false claims act or other state laws.

###

“The Colorado Medicaid Fraud Control Unit receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $3,795,665 for federal fiscal year 2024. The remaining 25 percent, totaling $1,265,221, is funded by the State of Colorado for the federal fiscal year.”