July 7, 2017

Drugmaker Alexion the focus of federal probe

PHOTO | Contributed
PHOTO | Contributed
The building at 100 College St. in New Haven is headquarters for Alexion Pharmaceuticals.

Embattled New Haven drugmaker Alexion Pharmaceuticals Inc. is the focus of a probe by the U.S. Department of Health and Human Services' Office of Inspector General in connection with an earlier federal investigation involving its support for charities that aid Medicare patients, according to a Bloomberg report.

First reported late Thursday, the "ongoing" probe comes on the heels of an investigation launched in January by the U.S. Attorney's Office for the District of Massachusetts, which subpoenaed documents on the matter.

Bloomberg sought confirmation of the HHS investigation through a Freedom-of-Information request.

According to an emailed statement from Alexion, the U.S. Attorneys' Office originally requested documents relating to its support of nonprofits that provide financial assistance to Medicare patients taking drugs sold by Alexion. It also sought information about Alexion's provision of free drugs to Medicare patients, and Alexion compliance policies and training materials concerning the anti-kickback statute or payments to such nonprofits.

"Other companies have disclosed similar inquiries," Alexion said.

The rare disease drugmaker noted it is "aware" of the investigation but "has not received a request for records from the HHS Office of Inspector General pertaining to any other matter."

Alexion received $51 million in state loans and grants as part of Connecticut's First Five Plus program, which provides incentives to companies to grow jobs in the state. The aid enabled the firm to move its headquarters from Cheshire to New Haven in 2016.

To date, the company has met its job targets and received forgiveness of a $20 million loan, and earned $2.5 million so far, said state Department of Economic and Community Development Spokesperson Jim Watson via email.

"DECD is not involved in any probes," said Watson, " ... but we are watching developments closely to determine whether any state action is necessary."

The company's troubles began even earlier in late 2016, when it disclosed it was investigating sales practices of its Soliris drug following a complaint by a former employee. That internal probe revealed no wrongdoing, but did find "material weaknesses" in internal controls over financial reporting that existed as early as Dec. 31, 2015 because senior managers failed to set "an appropriate tone at the top."

Since then a shakeup has included new CEO Ludwig N. Hantson replacing four key executives in the C-suite.

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