Major BioTech Company Faces Lawsuit For Alleged Civil RICO Violations

On April 4th, 2022, a health insurance company in New Jersey filed a civil RICO lawsuit against Regeneron Pharmaceuticals, a biotechnology company based in New York State (Horizon Healthcare Services, Inc .D/B/A Horizon Blue Cross Blue Shield of New Jersey v. Regeneron Pharmaceuticals, Inc.) The lawsuit alleges a corruption scheme related to Eylea macular degeneration treatment. In this article, our West Palm Beach RICO claims lawyer provides an analysis of the civil racketeering claim.

Allegations: BioTech Firm Developed Scheme to Overcharge Health Insurance Carrier 

Regeneron Pharmaceuticals manufactures and sells a prescription drug called Eylea. It treats age-related macular degeneration (AMD). The civil RICO complaint states that the company lists the price of the drug at $1,850 per treatment. It also states that a suitable alternative drug costs $55.

The complaint contends that the defendant set up a charity called the Chronic Disease Fund through which it transferred funds to help patients secure its drug at a lower cost than the $55 competitor. However, the complaint contends that Regeneron billed private health insurers and the government for the full listed price.

In effect, this complaint argues that the biotech company is misusing its charity by transferring money around so that its macular degeneration drug can remain cost-competitive for patients but it can charge very high prices to health insurance companies and government health programs.

To be clear, these are only allegations as laid out by the plaintiff in a civil racketeering lawsuit. There has not been a finding of liability or wrongdoing on the part of the defendant. Representatives for Regeneron Pharmaceuticals declined to offer public comment citing ongoing litigation. 

What the Plaintiff Must Prove to Establish Civil RICO Liability 

A civil racketeering violation is not easy to prove for plaintiffs. A RICO violation is more than just fraud or general commercial misconduct by a defendant. There are very specific elements that a plaintiff must establish in order to impose civil RICO liability. Among other things, this includes:

• Proving that there was racketeering activity;
• Proving that an enterprise (formal or informal) was used to commit racketeering; and
• Proving that the defendant(s) engaged in a pattern of racketeering activity.

There is a lot at stake in federal civil RICO cases and Florida civil RICO cases. A defendant found liable for a civil RICO violation can be held responsible for treble damages. In other words, they face legal liability for three times the plaintiff’s actual financial losses.

Schedule a Confidential Consultation With a Civil RICO Attorney in Southeast Florida

At Pike & Lustig, LLP, our Palm Beach County civil racketeering lawyers are skilled, justice-driven advocates for clients. If you or your business is involved in a civil RICO case, we are here to help you find the best path forward. Reach out to us by phone or connect with us directly online to set up your completely confidential consultation. We handle civil RICO litigation throughout South Florida, including in West Palm Beach, Jupiter, Fort Lauderdale, Miami, Hialeah, and Homestead.

Resource:

docketalarm.com/cases/Massachusetts_District_Court/1–22-cv-10493/Horizon_Healthcare_Services_Inc._d-b-a_Horizon_Blue_Cross_Blue_Shield_of_New_Jersey_v._Regeneron_Pharmaceuticals_Inc/1/