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Two pharmaceutical companies – Astellas Pharma US, Inc., and Amgen Inc. – have agreed to pay a total of $124.75 million to resolve allegations that they violated the False Claims Act by illegally paying the Medicare co-pays for their own high-priced drugs.

The two companies first announced an alliance in 2013. Amgen, the world’s largest independent biotechnology company, and Astellas Pharma Inc., a leading Tokyo-based global pharmaceutical company, announced the companies entered into a strategic alliance to provide new medicines to help address serious unmet medical needs of Japanese patients.

According to the allegations, Astellas and Amgen conspired with two co-pay foundations to create funds that functioned almost exclusively to benefit patients taking Astellas and Amgen drugs. As a result, the companies’ payments to the foundations were not ‘donations,’ but rather were kickbacks that undermined the structure of the Medicare program and illegally subsidized the high costs of the companies’ drugs at the expense of American taxpayers.

Amgen and Astellas each entered five-year corporate integrity agreements with OIG as part of their respective settlements. The integrity agreements require the companies to implement measures, controls, and monitoring designed to promote independence from any patient assistance programs to which they donate.

In addition, the companies agreed to implement risk assessment programs and to obtain compliance-related certifications from company executives and Board members.

To date, the Department of Justice has collected over $840 million from eight pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, and Amgen) that allegedly used third-party foundations as kickback vehicles.