Other LanguagesFederal lawsuit asserts scheme cost state Medicaid programs millions for critical eye medication
SEATTLE — Attorney General Bob Ferguson today announced his partnership with a bipartisan group of six attorneys general in a federal lawsuit asserting New York-based Regeneron Pharmaceuticals inflated the price it charged Medicaid for an important eye medication. The scheme resulted in the submission of tens of thousands of false claims to Medicaid and millions of dollars in losses to the states.
“We’re fighting corporate greed in order to protect public health care dollars and improve the affordability of medications,” Ferguson said. “This is how we protect Medicaid dollars that allow us to provide access to health care for nearly two million Washingtonians, including children and the most vulnerable.”
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, filed in the U.S. District Court for the District of Massachusetts, 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 and other credit card benefits. 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, 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. Washington is partnering with Colorado, Georgia, Michigan, North Carolina and Texas to bring the case.
The Attorney General’s Medicaid Fraud Control Division is responsible for the investigation and prosecution of health care provider fraud committed against the state’s Medicaid program. The Washington State Medicaid Fraud Control Division receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $9,062,900 for federal fiscal year FY 2024. The remaining 25%, totaling $3,021,000 for FY 2024, is funded by Washington state Medicaid fraud recoveries.
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Brionna Aho, Communications Director, (360) 753-2727; Brionna.aho@atg.wa.gov
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