The United States announced that it has intervened in a False Claims Act case against New York-based Regeneron Pharmaceuticals Inc. (Regeneron). The suit, brought by two whistleblowers, alleges that Regeneron improperly inflated Medicare reimbursement rates and submitted doctored sales reports to Medicare and Medicaid.

Regeneron is a pharmaceutical manufacturer that sells Eylea, which treats certain types of eye conditions, including neovascular Age-Related Macular Degeneration, which affects a person’s eyesight. The United States alleged that Regeneron increased their Medicare reimbursement rates for Eylea without the authority to do so, and knowingly submitted fraudulent average sales price reports to Medicare and Medicaid that did not include price concessions made by the company. These concessions were paid to specialty drug distributors in the form of credit card processing fees so that these distributors would accept credit as payment for Eylea to benefit Regeneron’s customers – eye health practitioners – who could then receive credit card benefits for their purchases of Eylea.

The U.S. Attorney for the District of Massachusetts summarized the claims, stating:

“The government alleges that Regeneron manipulated Medicare’s drug pricing process, by knowingly failing to report its payment of credit card processing fees as price concessions to its customers … By doing so, Regeneron greatly inflated the costs of its drug to Medicare over many years and enhanced its revenues. Falsely reported average sales prices cost the Medicare system hundreds of millions of dollars and we will make every effort to prevent such practices.”

The lawsuit was originally filed under the qui tam provisions of the False Claims Act by two whistleblowers, Julianne Nunnelly and Matthew Shanks. Nunnelly was a Regional Sales Director at Regeneron, and Shanks was a Director of Analytics at Regeneron. A whistleblower or qui tam relator who files a successful whistleblower lawsuit is entitled to between 15 and 25 percent of the government’s recovery.