Wires

UPDATE 1-Two charities to pay $6 mln to resolve U.S. pharma kickback probe

Nate Raymond

(Adds further details on settlement, background on investigation, comment from charities)

BOSTON, Oct 25 (Reuters) - Two charities will pay $6 million to resolve claims they operated as pass-throughs for seven pharmaceutical companies to pay kickbacks to Medicare patients using their high-priced medications, the U.S. Justice Department said on Friday.

The settlements with the patient assistance charities Good Days and Patient Access Network Foundation were the first to be reached with foundations linked to an industry-wide probe that has resulted in $840 million in settlements with drugmakers.

Both of the foundations provide assistance to patients seeking to pay out-of-pocket costs for medications. Good Days agreed to pay $2 million while PAN Foundation agreed to pay $4 million. Neither admitted wrongdoing.

Good Days in a statement said the settlement will allow it to concentrate on providing help to people in need of life-saving medications. PAN said the settlement involved "legacy matters" rather than its current operations.

Drug companies are prohibited from subsidizing co-payments for patients enrolled in the governments Medicare healthcare program for those aged 65 and older. Companies may donate to non-profits providing co-pay assistance as long as they are independent.

But the government has alleged that various drugmakers have used charities like Good Days and PAN as means to improperly pay the co-pay obligations of Medicare patients using their drugs, in violation of the Anti-Kickback Statute.

The department said Good Days, previously known as the Chronic Disease Fund, from 2010 to 2014 conspired with companies including Novartis AG, Astellas and Questcor, now owned by Mallinckrodt Plc, to pay kickbacks to Medicare patients.

PAN similarly permitted four companies including Bayer AG , Astellas, Dendreon Pharmaceuticals and Amgen Inc to use it as a conduit to pay patients kickbacks, the government alleged.

Astellas and Amgen in April agreed to pay $100 million and $24.75 million, respectively, to resolve related claims. Mallinckrodt is fighting a lawsuit by the Justice Department over its donations to Good Days and denies wrongdoing.

Representatives for the other companies did not immediately respond to requests for comment on Friday. (Reporting by Nate Raymond in Boston; Editing by Hugh Lawson and Chris Reese)