Watertown Pharmaceutical Company to Pay Nearly $4.7 Million to Resolve False Claims Act Allegations

BOSTON - EyePoint, Inc., formerly EyePoint Pharmaceuticals, Inc. (EyePoint), has agreed to pay $4,678,981 to resolve allegations that it paid kickbacks to Ambulatory Surgery Centers (ASCs) to induce the ASCs to purchase its drug, DEXYCU. This scheme, the government alleges, violated the Anti-Kickback Statute and the False Claims Act.

The government contends that EyePoint's unlawful scheme took two forms between January 2019 and March 2023: illegal payments from EyePoint to ASCs through an "Assurance Program;" and illegal payments from EyePoint to ASCs via the provision of free DEXYCU samples.

The company, headquartered in Watertown, Mass., has admitted and accepted responsibility for the following facts. First, through its "Assurance Program," EyePoint covered ASCs' costs when federal insurance programs denied coverage of the drug, either by paying the ASCs cash or by providing them with free replacement DEXYCU. Second, EyePoint gave thousands of free samples to ASCs and the ASCs used the no-cost DEXYCU on patients whose commercial health insurance would not pay for the drug. The government alleges that EyePoint's provision of no-cost samples induced ASCs to purchase and dispense DEXYCU reimbursed by Medicare, Medicaid and TRICARE by eliminating the ASCs' potential financial losses from commercial health insurers denying payment for DEXYCU.

"As we have for years, our Office will continue to hold pharmaceutical manufacturers accountable for paying illegal kickbacks," said United States Attorney Leah B. Foley. "Through these efforts, we protect patients by removing providers' financial incentives to prescribe or dispense products that may not be medically necessary for the patient and protect the public from fraud, waste and abuse."

"Kickbacks by pharmaceutical companies increase the cost of drugs used by patients and paid for by federal health care programs," said Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division. "The Civil Division will hold accountable anyone who pays unlawful kickbacks."

"Pharmaceutical companies that attempt to boost profits through unlawful kickbacks undermine the integrity of federal health care programs and betray the patients who rely on them," said Acting Deputy Inspector General for Investigations Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). We will aggressively pursue any entity that seeks to corrupt medical decision making and will not hesitate to hold them accountable."

"As alleged, EyePoint's unlawful scheme compromised safeguards meant to ensure that treatment decisions are made in the best interests of patients, not corporate profits," said Roberto Coviello, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General. "This settlement demonstrates our commitment to protecting the integrity of taxpayer-funded health care programs, and we will use every enforcement tool available to address conduct that seeks to undermine those protections."

In connection with the settlement, EyePoint entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General. Through separate agreements, Eyepoint will pay an additional $25,478 to certain participating states.

The claims against EyePoint were brought under the whistleblower or qui tam provisions of the False Claims Act. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. The relator will receive $791,768.74 from the proceeds of the settlement. The lawsuit is captioned United States, et al. ex rel. AFCE, LLC v. EyePoint Pharmaceuticals, Inc., No 21-cv-120171.

U.S. Attorney Foley, AAG Shumate, Acting Deputy IG Lampert and HHS-OIG SAC Coviello made the announcement today. This case is being handled by Assistant U.S. Attorney Steven Sharobem of the U.S. Attorney's Office's Affirmative Civil Enforcement Unit and Trial Attorney Margaret F. Thomas of the Department of Justice's Fraud Section.