On Monday, plaintiffs Blue Cross and Blue Shield of Massachusetts Inc. and Blue Cross and Blue Shield of Massachusetts HMO Blue Inc. (collectively, BCBSMA) filed a lawsuit in \ federal court against Regeneron Pharmaceuticals Inc., claiming that the pharmaceutical manufacturer illegally inflated the price of a drug for an eye disease that can leave patients legally blind.
The insurers, who both contract with the privately insured and the Centers for Medicare and Medicaid Services (CMS) for Medicare beneficiaries, claim that the prescription drug Eylea to treat wet age-related macular degeneration (wet AMD) cost $1,850 per treatment, whereas an equally effective competitor cost only $55. BCBSMA argues that to date, it has paid more than $100 million to cover patients’ Eylea costs.
The complaint explains that since 2012, Regeneron entered into a “secret arrangement” with the Chronic Disease Fund Inc. (CDF) to provide financial assistance to patients for their out-of-pocket share of Eylea’s costs, but not for the Medicare program or for private healthcare plans. “Regeneron’s scheme rendered Eylea cost-free in the view of patients and their prescribing physicians, while healthcare plans paid Eylea’s entire net cost,” the complaint says.
Consequently, BCBSMA claims that the pharmaceutical manufacturer obtained a competitive advantage of its rivals by warping the costs of Eylea in the view of patients and their prescribers, while increasing the costs it bore. The complaint describes the “charity” payments funneled to CDF as “kickbacks to patients who otherwise had a contractual incentive to choose an equally effective but lower-cost drug.”
The filing notes that Regeneron concealed its illegal scheme until it was exposed by an action filed by the U.S. Department of Justice in June 2020. Indeed, other insurers have sued Regeneron over the CDF scheme, such as Humana this July.
In the instant complaint, the plaintiffs contend that Regeneron violated the Racketeer Influenced and Corrupt Organizations (RICO) Act, the Massachusetts Consumer Protection Law, and committed fraud and fraudulent concealment and tortious interference with contract. BCBSMA is represented by its own counsel, Lowey Dannenberg P.C., and Getnick & Getnick LLP.
