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Incyte (INCY) agreed to pay $12.6 million to settle allegations that donations amounted to kickbacks paid to Medicare patients as a way to cover their out-of-pocket costs, the latest in a growing list of drug makers to reach such a deal with the U.S. government.

At issue is a federal law known as the Anti-Kickback Statute, which prohibits pharmaceutical companies from offering or paying — whether directly or indirectly — money or anything else of value to induce Medicare or other federal programs to purchase their drugs. The Department of Justice has previously alleged some charities made it possible for drug companies to evade the law.


In this instance, Incyte illegally used an independent foundation as a conduit to cover the cost of copays for people who were enrolled in Medicare and TRICARE and prescribed its Jakafi medicine for treating the blood cancer myleofibrosis, according to the U.S. Department of Justice. From late 2011 through late 2014, Incyte was the sole donor to a fund that only assisted patients with the disease.

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