News briefing: HHS chastises Eli Lilly for ending some discounts in a pandemic; Gilead to pay $97 million to settle kickback allegations

Gilead agreed to pay $97 million to settle allegations that it illegally used a charity to pay thousands of Medicare patients’ co-payments for its pulmonary arterial hypertension drug Letairis.

The US government claimed that between June 2007 and December 2010, Gilead $GILD used the Caring Voice Coalition as a conduit to cover the costs of just its own drug. The alleged behavior goes against the False Claims Act.

“Such conduct not only violates the anti-kickback statute, it also undermines the Medicare program’s co-pay structure, which Congress created as a safeguard against inflated drug prices,” U.S. Attorney Andrew Lelling in Boston said in a statement. During the 3-year time period, Gilead raised the price of Letairis by over 7 times the rate of overall inflation in the US, according to Lelling.

Gilead issued its own statement, saying it “does not believe it violated the law and had no intention of doing so.”

Letairis, chemically known as ambrisentan, was approved by the FDA in 2007. Last year, the FDA approved four generic versions of the pulmonary arterial hypertension drug.

The US government also filed a complaint last year against Gilead related to Truvada and Descovy, alleging the biotech infringed on patents owned by the HHS that cover specific drug regimens used for HIV prevention. — Nicole DeFeudis 

HHS scolds Lilly for seeking to cut back 340B discounts

HHS is not happy with Eli Lilly.

In a letter dated Monday, the department’s general counsel Robert Charrow criticized the drug company for scaling back discounts offered in federal programs. Specifically, HHS is concerned about Lilly’s recent move to halt 340B discounts, which were created in 1992 to require price cuts on all outpatient drugs to hospitals and clinics in poverty-stricken communities.

One issue, the letter said, was that Lilly’s finances are good.

Charrow noted that the company’s stock price had risen 11% since Jan. 1 and pulled in revenue totaling more than $1.6 billion in the second quarter alone.

Charrow also accused Lilly of unilaterally seeking to impose deadlines on when such discounts could end, something it cannot do.

“Lilly cannot and should not view the absence of any questions from the government as somehow endorsing Lilly’s policy especially when this Department is leading the government’s response to the Covid-19 pandemic,” Charrow wrote.

This is just the latest in a long tit-for-tat between drugmakers and 340B hospitals, according to STAT. For the past few years, they have gone back and forth on several issues in court, mainly how many hospitals and clinics are eligible for the program, how much money those hospitals should receive and requirements that drug companies disclose ceiling prices. — Max Gelman

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