Regeneron Pharmaceuticals Inc (NASDAQ:REGN) faced a blow in early trading after being hit with fraud allegations from the US Justice Department.
Regeneron allegedly inflated the sales price of its macular degeneration drug Eylea to boost revenues from Medicare, according to the department.
This was done by subsidising distributors for credit card purchases so they would accept the payment method for the drug while still charging lower cash rates.
The company denies wrongdoing.
“Regeneron’s customers - typically retina and ophthalmic practices - could receive credit card benefits for their purchases, such as ‘cash back’ and other credit card rewards,” the department’s lawsuit said in a filing made in Boston.
“By doing so, Regeneron greatly inflated the costs of its drug to Medicare over many years and enhanced its revenues,” US attorney Joshua Levy added.
The drug, which was first marketed in 2011, costs US$1,850 per vial and has become a leading expense for people on the government healthcare program aged over 65, the department said.
Some US$25 billion was paid out between 2012 and 2023, it added, with the case being filed under the False Claims Act regarding government payments.
Shares dipped 2.3% to US$914.41 on Thursday.
In London, the company has been a top 10 holding for the JPMorgan American Investment Trust.