Dompé U.S. Inc., the California-based subsidiary of Italian drugmaker Dompé farmaceutici S.p.A., has agreed to pay $32 million to resolve allegations that it used two patient assistance charities to cover Medicare patients’ co-pays for its eye drug Oxervate. The Justice Department announced the False Claims Act settlement on September 10, saying the conduct ran from 2018 through 2021 and violated the Anti-Kickback Statute. The parent company reported the conduct to federal authorities itself, and both companies received credit for cooperating.
How the Oxervate co-pay arrangement worked
Oxervate, known generically as cenegermin-bkbj, is an eye drop that the Food and Drug Administration approved in August 2018 as the first treatment for neurotrophic keratitis, a rare disease of the cornea. According to the Justice Department’s announcement, Dompé admitted as part of the settlement that around the time of the drug’s U.S. launch in 2018, employees of Dompé U.S. expressed reservations about launching Oxervate before the company had made a payment to a patient assistance foundation that paid co-pays for the drug.
After conversations with Dompé employees, two foundations opened funds that, among other things, paid co-pays for Oxervate, and Dompé made contributions to those foundations, the department said. Dompé also solicited patient assistance foundation data directly from the foundations and from the specialty pharmacy that provided hub services to Dompé U.S. patients. That data was passed, directly or indirectly, to certain individuals involved in the foundations’ budgeting process.
Federal officials view that pattern as a way for a manufacturer to steer charitable dollars toward its own product. When a drugmaker’s donation effectively pays a Medicare patient’s share of the cost for that same drugmaker’s medicine, the patient no longer feels the price, and Medicare continues to pay the much larger balance.
Inside the kit: Cases like this one start with paperwork: pharmacy receipts, plan statements and letters from a patient assistance charity that are easy to lose track of. The fraud evidence and report log gives each of those papers a dated place, and it is one of the tools in The Senior Fraud Defense & First-Hour Recovery Kit.
Why federal law treats co-pay help from drugmakers as a kickback
When a Medicare beneficiary fills a covered prescription, the beneficiary may owe part of the cost as a co-payment, co-insurance or deductible, which the Justice Department groups together as “co-pays.” Congress built those payments into the program in part so that market forces would act as a check on health care costs, including the prices drug manufacturers can demand.
Under the Anti-Kickback Statute, a pharmaceutical manufacturer may not offer or pay any remuneration, directly or indirectly, to induce Medicare patients to buy its drugs. The prohibition extends to paying patients’ co-pay obligations. Charitable foundations that help patients with drug costs can operate lawfully, but federal enforcers have repeatedly pursued cases in which a manufacturer’s donations were allegedly tied to its own product.
“Kickbacks to beneficiaries undermine the purpose of the Medicare co-pay system and drive up the cost of drugs,” said U.S. Attorney Leah B. Foley for the District of Massachusetts. Her office has recovered more than $1.4 billion for taxpayers through settlements and enforcement actions over drug company kickbacks to purported charities, she said.
Acting Deputy Inspector General for Investigations Miranda L. Bennett of the Department of Health and Human Services Office of Inspector General said manufacturers that “disguise kickbacks as charitable patient assistance are engaging in blatant misconduct which corrupts medical decision‑making and drains federal health care programs.” She added that Dompé’s actions “undermined critical safeguards Congress put in place to protect Medicare, driving up costs for taxpayers while exploiting patients.”
Self-disclosure earned the company cooperation credit
The case stands out because it began with the company. Dompé farmaceutici self-disclosed the conduct to the United States, according to the Justice Department. Afterward, both the Italian parent and its U.S. subsidiary cooperated with the government and received credit under the department’s guidelines for weighing self-disclosure, cooperation and remediation in False Claims Act cases.
“This settlement demonstrates the United States’ commitment to enforcing the Anti-Kickback Statute and ensuring that pharmaceutical manufacturers do not use unlawful inducements,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department encourages companies that uncover improper kickbacks to self-disclose such conduct.”
The resolution was a coordinated effort by the Civil Division’s Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the District of Massachusetts and HHS-OIG. Senior Trial Counsel Sarah Arni of the Civil Division and Assistant U.S. Attorneys Lindsey Ross and Brian LaMacchia handled the matter. As is standard in civil settlements, the department noted that the claims resolved are allegations only and that there has been no determination of liability.
What the settlement means for Medicare patients and taxpayers
The $32 million is paid to the United States to resolve the government’s claims. The Justice Department did not announce any claims process, refund or payment to individual Medicare beneficiaries who used Oxervate, and patients who were prescribed the drug are not being told to stop taking it. Questions about a specific prescription or co-pay belong with the prescribing doctor and the patient’s Part D plan.
For older Americans, the larger cost is indirect. Medicare’s drug spending is funded by taxpayers and by beneficiaries’ own premiums, so arrangements that keep patients insulated from a drug’s price can push overall program costs higher. The co-pay a retiree sees at the pharmacy counter is only a small slice of what Medicare pays for a specialty medicine, and when that slice is quietly covered by the manufacturer’s donations, the check on pricing that Congress intended is weakened.
The settlement also lands during a broader federal push on health care fraud. The Justice Department said the administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division this year to step up enforcement against fraud, waste and abuse in federal programs, and it described the False Claims Act as one of its most powerful tools in that effort.
Beneficiaries who see charges they do not recognize on a Medicare statement or plan notice, or who are offered money or gifts in exchange for medical services, can report concerns through Medicare’s fraud reporting page, by calling 1-800-MEDICARE, or to HHS-OIG through its tips hotline at 800-HHS-TIPS (800-447-8477). People enrolled in a Medicare Advantage plan or a Part D drug plan can also reach the Investigations Medicare Drug Integrity Contractor at 1-877-7SAFERX (1-877-772-3379).
When a pharmacy bill does not look right
A settlement between a drugmaker and the government does nothing to sort out an individual retiree’s pharmacy charges. Spotting a questionable co-pay, an unfamiliar charity letter or a service that never happened still depends on having the right papers in hand and knowing who to call first.
The Senior Fraud Defense & First-Hour Recovery Kit includes the first-hour recovery plan, which sets out the order of calls after a suspected fraud, and a fraud evidence and report log for tracking each statement, report and reference number.
Both tools are laid out step by step in The Senior Fraud Defense & First-Hour Recovery Kit.
This article was prepared with AI assistance and reviewed against the linked official sources.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
