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Patient Services Inc. Agrees to Pay $3 Million to Settle

What’s New/Significant

Patient Services Inc. (PSI), agreed Jan. 21, 2020, to pay $3 million to the United States Department of Justice to resolve charges that it violated the False Claims Act by acting as a conduit for pharmaceutical companies to pay kickbacks to Medicare patients taking their drugs.


The government alleged that PSI worked with various pharmaceutical companies — Insys, Aegerion and Alexion — to design and operate funds that funneled money from the companies to patients taking the specific drugs the companies sold. The creation of these funds minimized the possibility that the companies’ contributions to the funds would go to patients taking competing drugs made by other companies and undermined the nature of these contributions as bona fide donations.  The government previously entered into settlement agreements totaling $122 million with these companies covering their use of PSI as a conduit to pay their patients’ copays.

With respect to PSI’s activities with each company, the government alleged that:

  • i) PSI and Insys discussed a potential copayment assistance fund for Subsys, which was approved for the treatment of breakthrough cancer pain in opioid-tolerant patients; ii) PSI worked with Insys to create the “Breakthrough Cancer Pain” patient assistance fund, to which Insys was the only donor; iii) PSI allowed Insys to see the status of each patient who it referred to PSI, including whether that patient had received copay assistance from PSI and the amount of the assistance; and iv) PSI knew that Insys was referring patients to the Breakthrough Cancer Pain fund who did not have cancer.

  • i) PSI created a fund for homozygous familial hypercholesterolemia (HoFH), which can be treated by Juxtapid, a drug that was sold by Aegerion; ii) PSI allowed Aegerion to participate in establishing the patient eligibility criteria that PSI used to cover copayment obligations of patients taking Juxtapid; and iii) the HoFH fund allowed Aegerion to pay for Medicare patients’ copayments to eliminate any price sensitivity to physicians prescribing and patients taking Juxtapid. 

  • i) PSI created a fund to provide financial assistance to Soliris patients, which paid Medicare copays and other medical expenses for Soliris patients; ii) PSI provided financial assistance from the Complement Mediated Diseases (CMD) fund only if a patient was taking Soliris; and iii) PSI reported information back to Alexion confirming the specific Soliris patients who were approved for copay or other financial assistance from PSI and through which PSI detailed payments to those patients.

Terms of Settlement

In addition to the monetary settlements, PSI has agreed to a three-year Integrity Agreement (IA) with the Office of the Inspector General (OIG). The IA requires, among other things, that PSI implement measures designed to ensure that it operates independently and that its arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law. In addition, the IA require i) training for and compliance-related certifications from PSI’s  board of directors; and ii) detailed reviews by an independent review organization.