On December 21, 2023, the government announced that Ultragenyx Pharmaceutical Inc. (Ultragenyx) has agreed to pay $6 million to settle a False Claims Act qui tam case that Gregg Shapiro filed in 2021 on behalf of a whistleblower who was then working at Ultragenyx. The whistleblower alleged that Ultragenyx used kickbacks to generate sales of an expensive drug called Crysvita.
The Food and Drug Administration has approved Crysvita for treatment of a rare genetic disease called x-linked hypophosphatemia (“XLH”), an inherited form of rickets that impairs bone growth and development. Crysvita generally costs over $200,000 annually, and it is covered at taxpayer expense by Medicare and Medicaid.
The whistleblower alleged that, in early 2019, as part of its efforts to market Crysvita, Ultragenyx entered into an agreement with Invitae, a genetic testing laboratory, to finance what Invitae referred to on its website as a “sponsored testing program” for XLH. Under this agreement, the whistleblower alleged, Ultragenyx paid Invitae not only to provide genetic testing to physicians and their patients, but also to tell Ultragenyx the names of those physicians and the results of the tests (albeit without identifying the patients by name). When test results were positive for XLH, Ultragenyx allegedly directed its sales representatives to contact the physicians and to encourage them to prescribe Crysvita for their patients.
Relator thus alleged that Ultragenyx violated the anti-kickback statute by providing remuneration – the genetic tests – to generate referrals. In April 2022, after the Relator filed her case and brought Ultragenyx’s conduct to the attention of the government, the Office of Inspector General of the Department of Health and Human Services issued an advisory opinion warning that a pharmaceutical company’s provision of genetic tests could violate the anti-kickback statute if the tests were used “as a marketing or sales tool to induce physicians to order additional items and services.”
In the settlement agreement, consistent with the whistleblower’s core factual allegation, Ultragenyx admitted that it paid the genetic testing “[l]aboratory to provide test results back to Ultragenyx and [that] its commercial team used the results, in part, to find potential Crysvita patients and their HCPs for follow up Crysvita marketing efforts.”
The government has agreed to pay the whistleblower approximately $1.1 million as a reward for bringing this case.
The federal government team on the case included Assistant United States Attorneys Brian LaMacchia and Diane Seol, and Department of Justice Trial Attorney Augustine Ripa.