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Pfizer to pay nearly $24 million to settle kickback allegations
Drug maker Pfizer was under federal investigation. (DOMINICK REUTER/AFP/Getty Images)
By Jonathan Saltzman
Globe Staff

Pfizer Inc. has agreed to pay nearly $24 million to settle federal charges that the drug-making giant used a purportedly independent charitable foundation to pay illegal kickbacks to Medicare patients to cover their out-of-pocket drug expenses.

The US Justice Department said Thursday that the civil settlement resolves allegations that Pfizer improperly used a tax-exempt foundation as a conduit to cover co-payments of patients taking three Pfizer drugs.

Pfizer’s scheme enabled the New York-based drug maker to boost prices and revenue, violating the federal False Claims Act, prosecutors said. The scheme ran from 2012 to 2016. The company has about 2,200 employees in Massachusetts, the fifth most of any drug maker in the state, according to a Massachusetts Biotechnology Council report last year.

The agreement with the Justice Department followed an investigation led by the office of US Attorney Andrew Lelling of Boston into the drug industry’s support of patient assistance charities. The Boston office is historically among the most active in the country in pursuing health care fraud.

“Pfizer used a third party to saddle Medicare with extra costs,’’ Lelling said. “The anti-kickback statute exists to protect Medicare, and the taxpayers who fund it, from schemes like these. At the same time, we commend Pfizer for stepping forward to resolve these issues in a responsible manner.’’

Pfizer said on its website that the settlement “reflects the Company’s desire to put this legal matter behind it and focus on the needs of patients. The Company believes all individuals deserve access to medicines prescribed by their physicians.’’

The company also signed a five-year corporate integrity agreement with the inspector general of the Department of Health and Human Services.

Drug companies are barred from subsidizing copayments for patients enrolled in Medicare, but may donate to independent nonprofits that provide such assistance.

Pfizer allegedly worked with a third-party specialty pharmacy to move patients taking its renal cell carcinoma medicines Sutent and Inlyta to the foundation, rather than provide the drugs free to eligible patients.

Pfizer also allegedly worked with the foundation to set up a fund for patients taking Tikosyn, an arrhythmia medicine, and coordinated the opening of the fund with a price hike.

Jonathan Saltzman can be reached at jsaltzman@globe.com