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Alexion (ALXN) is Under Investigation by the HHS Office of Inspector General



7/7/2017 5:43:06 AM

Alexion is Under Investigation by the HHS Office of Inspector General July 7, 2017
By Alex Keown, BioSpace.com Breaking News Staff

NEW HAVEN, Conn. – Shares of Connecticut-based Alexion Pharmaceuticals (ALXN) took a hit, falling about 5 percent after reports revealed the company is under investigation from the U.S. Department of Health and Human Services’ Office of the Inspector General.


The company is reportedly being scrutinized for support of charities that aid Medicare patients. According to a Bloomberg report, the investigation is looking at the organizations that "provide financial assistance to Medicare patients taking drugs sold by Alexion." Details of the investigation are few. Bloomberg noted that a Freedom of Information Act request from the federal government did reveal the existence of the investigation, but did not provide information as to what promoted it. Citing a 2015 federal report, Bloomberg showed that Medicare spent approximately $150 million on Alexion’s Soliris. Known as the world’s most expensive drug, Soliris has an annual price tag of about $440,000 for patients. It is used to treat paroxysmal nocturnal hemoglobinuria, a rare blood disorder that affects about one or two people out of every million.

Alexion told Bloomberg it is cooperating with the investigation.

This isn’t Alexion’s first brush with controversy. The company continues to grapple with allegations of improper sales practices for Soliris—allegations that led to the resignation of the former CEO David Hallal, as well as Vikas Sinha, the company’s chief financial officer. In January of this year Alexion admitted that unnamed members of its senior management team used “inappropriate business tactics” to market Soliris. In January the company said some revenues pulled in 2015 and 2016 were “realized by employee actions that involved inappropriate business conduct, including violations of company policies and procedures.”
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In May, police in Brazil raided the company’s sales offices as part of an investigation into how Soliris is marketed in that country. According to a May Bloomberg report, the company worked with a local patient association to subsidize lawsuits seeking patient access to Soliris. Some of those lawsuits were fraudulent, according to Brazilian authorities.

Because of its troubles, Alexion has been taking steps to restructure its leadership and cleanse its reputation. In March the company tapped former Baxalta (BXLT) head Ludwig Hantson to serve as the new CEO. Since taking over the reins, Hantson has been reshaping the leadership team of the company. He conducted a purge of Alexion’s former leadership team, and then began to bring in new C-suite-level leaders, many of them his former colleagues from Baxalta.

After falling to $120.08 per share on Thursday, Alexion stock is currently up this morning, trading at $122.10 as of 10:13 a.m.


Read at BioSpace.com


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