(Reuters) – Pfizer Inc <PFE.N> has agreed to pay $23.85 million (17.86 million pounds) to resolve U.S. government charges that the drugmaker illegally used a purportedly independent charity to pay kickbacks to Medicare patients covering their out-of-pocket drug costs.
The settlement announced by the U.S. Department of Justice resolves allegations that Pfizer violated the federal False Claims Act between 2012 and 2016.
It resulted from an industrywide probe into drug companies’ support of patient assistance charities.
Pfizer did not immediately respond to a request for comment.
The government accused Pfizer of improperly using the Patient Access Network Foundation, which claimed non-profit status for tax purposes, as a conduit to cover the co-pay obligations of Medicare patients taking three Pfizer drugs.
These drugs included Sutent and Inlyta, which both treat renal cell carcinoma, and Tikosyn, which treats arrhythmia in patients with atrial fibrillation, the government said.
“Pfizer used a third party to saddle Medicare with extra costs,” enabling the drugmaker to generate more revenue and mask price increases, Andrew Lelling, the U.S. attorney in Boston, said in a statement.
(Reporting by Jonathan Stempel in Toronto; Additional reporting by Brendan Pierson in New York; Editing by Bernadette Baum)