Jazz Pharmaceuticals to settle U.S. probe for $57 million

BOSTON (Reuters) – Jazz Pharmaceuticals Plc said on Tuesday it had agreed to pay $57 million to resolve a U.S. probe into its financial support of charities that offer assistance to Medicare patients seeking help to cover out-of-pocket drug costs.

The drugmaker said in a filing with the U.S. Securities and Exchange Commission that it reached an agreement in principle with the U.S. Justice Department to pay the sum as part of a civil settlement.

Jazz, which produces the expensive narcolepsy drug Xyrem, said in the filing it could not guarantee its efforts to reach a final settlement would be successful. The Dublin-based drugmaker did not respond to a request for comment.

The company is among more than a dozen pharmaceutical manufacturers that have disclosed receiving subpoenas seeking for information related to their support of patient-assistance charities.

Drug companies are prohibited from subsidizing co-payments for patients enrolled in the Medicare government healthcare program for the elderly. But companies may donate to nonprofits providing co-pay assistance as long as they are independent.

The U.S. Attorney’s Office in Massachusetts has been leading the industry-wide investigation.

In December, it announced a $210 million settlement with United Therapeutics Corp to resolve claims it used a charity as a conduit to illegally cover Medicare patients’ out-of-pocket costs in order to eliminate price sensitivity and boost sales.

Reporting by Nate Raymond in Boston; Editing by Sandra Maler and Peter Cooney