‘Unusual’ Humana Case Has Implications for Pharma Pacts

In what the plaintiff’s attorneys are calling the first False Claims Act settlement arising from a Medicare Advantage organization accepting a kickback from a pharmaceutical company, Humana Inc., Roche Diagnostics Corp. and related entities this month agreed to pay $12.5 million to resolve allegations that they engaged in a debt forgiveness scheme to keep Roche’s products on Humana’s formularies. Although the settlement amount is relatively small and the government did not intervene in the relator’s case, experts say the suit has some important takeaways for MA organizations.

The case (U.S. ex rel. Crystal Derrick v. Hoffman-La Roche Ltd. et al. 1:14-cv-04601), originally filed in 2014 in the Illinois Northern District Court, was brought by a former Roche employee who claimed she was privy to internal discussions that resulted in Roche forgiving millions of dollars owed by Humana in exchange for continued access to its formularies. These included formularies for Humana’s MA plans and the Right Source mail-order formulary, which covered diabetes products such as glucose strips, meters and lancets made by Roche.

© 2021 MMIT

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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