US Department of Health and Human Services Launches Investigation into Alexion Pharmaceuticals

This week, the United States Department of Health and Human Services launched an investigation into the American pharmaceutical company Alexion. The company is best known for developing Soliris, which is used to combat two rare blood disorders, paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome. Federal prosecutors wish to investigate the company’s support of charities that help Medicare patients. The investigation comes at a time when the New Haven pharmaceutical company has been plagued with negative press.

Alexion confirmed the investigation, but also admitted it had yet to receive a request for records from the HHS pertaining to any other matter. The pharmaceutical company confirmed the United States attorneys’ office had requested documents related to the company’s support of charitable organizations that offer financial support to Medicare patients, who may be taking drugs produced by Alexon. The attorneys also requested documents regarding compliance policies and training materials associated with anti-kickback laws.

In January, Alexion revealed it had received a subpoena from the United States Attorneys’ Office for the District of Massachusetts. A spokesman with the HHS refused to confirm or deny the investigation. The agency is responsible for investigating fraud and waste. The HHS Office of Inspector General has admitted that Medicaid and Medicare are their two biggest problems.

A report from 2015 revealed that Medicare spent a minimum of 150 million dollars on Soliris, which is used to combat rare blood disorders. On average, the drug costs anywhere from $500,000 to $700,000 each year. Several years ago, Alexion took advantage of Connecticut governor Dannel P. Malloy’s First Five initiative, which was designed to promote job growth at some of the state’s big companies. At the time, Alexion received $51 million in economic development aid.

An internal investigation was initiated by Alexion in January of this year, after a former employee alleged improper sales of Soliris. The company’s investigation concluded that the orders were valid and placed by customers. Nevertheless, they did discover inefficient internal controls in financial reporting protocols. In Brazil, authorities raided the company’s Sao Paulo offices on May the 8th. The raid was conducted as a part of an investigation into the company’s sale practices.

Brazilian authorities accused Alexion of helping a local patient association subsidize lawsuits for patients to gain access to Soliris via the national health system. On Friday, Alexion stock, ALXN, climbed 1.97 points to end the trading day at $123.06. During the after hours trading, ALXN climbed an additional .19 points to settle at $123.25.