June 6, 2018 / 7:46 PM / in 2 months

Drugmaker Lundbeck to settle U.S. charity probe for $52.6 million

BOSTON (Reuters) - Danish drugmaker Lundbeck (LUN.CO) said on Wednesday that it will pay $52.6 million to resolve a U.S. probe into its financial support of patient assistance charitable foundations.

FILE PHOTO: The U.S. Department of Justice building is seen in Washington, U.S., February 1, 2018. REUTERS/Jim Bourg

The company, formally called H. Lundbeck A/S, said it had reached an agreement with the U.S. Justice Department, which has investigating drugmakers’ support of charities that help Medicare patients cover out-of-pocket drug costs.

Lundbeck, which develops and distributes drugs for neurological and psychological diseases such as depression and Alzheimer’s, said the settlement would include no admission of wrongdoing and is subject to further negotiation.

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 non-profits 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. A spokeswoman for the office declined to comment.

The probe most recently resulted in Pfizer Inc (PFE.N) on May 25 agreeing to pay $23.85 million to resolve claims that it used a purportedly independent charity as a conduit to pay illegal kickbacks to Medicare patients.

In December, United Therapeutics Corp (UTHR.O) reached a $210 million settlement to resolve similar allegations it improperly used a charity to cover co-payments.

Jazz Pharmaceuticals Plc (JAZZ.O) announced on May 8 that it had reached an agreement to pay $57 million to resolve a related investigation.

Reporting by Nate Raymond in Boston; Editing by Chizu Nomiyama and Lisa Shumaker

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