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EyePoint Pharmaceuticals to Pay Over 4.6 Million Dollars to Resolve False Claims Act Allegations Regarding DEXYCU Kickbacks

by Nana July 19, 2026

written by Nana

EyePoint Pharmaceuticals, Inc., a Massachusetts-based biopharmaceutical company, has reached a settlement with the United States government, agreeing to pay $4,657,463.18 to resolve allegations of violating the False Claims Act. The settlement addresses claims that the company engaged in an illegal kickback scheme to induce Ambulatory Service Centers (ASCs) to purchase and dispense DEXYCU, a long-acting injectable steroid used for treating inflammation following cataract surgery. According to the Department of Justice, these activities occurred between January 1, 2019, and March 1, 2023, during which time EyePoint allegedly implemented financial incentives that corrupted the medical decision-making process and inflated costs for federal healthcare programs.

The civil settlement involves allegations that EyePoint utilized two primary methods to improperly influence healthcare providers. First, the company established an "Assurance Program" designed to insulate ASCs from the financial risks associated with the drug. Under this program, EyePoint allegedly offered to reimburse or compensate ASCs if health insurance providers denied claims for DEXYCU or if the reimbursement amount fell below the purchase cost the centers paid to EyePoint. Second, the government alleged that EyePoint provided ASCs with an excessive number of free samples of DEXYCU, which served as an additional financial inducement to favor the drug over other treatment options.

The Mechanics of the Alleged Kickback Scheme

The investigation focused on EyePoint’s marketing and distribution strategies following the commercial launch of DEXYCU in early 2019. DEXYCU was marketed as a convenient alternative to the traditional regimen of corticosteroid eye drops that patients must self-administer for several weeks following cataract surgery. Because DEXYCU is an intraocular suspension administered by a physician at the end of the procedure, it is typically billed under a "buy-and-bill" model. In this model, the ASC purchases the drug upfront and then bills the patient’s insurance, such as Medicare, for the cost of the drug and its administration.

Federal investigators alleged that EyePoint recognized the financial risk ASCs faced if they were not fully reimbursed for the expensive drug. To mitigate this risk and ensure high sales volumes, EyePoint allegedly created the Assurance Program. This program functioned as a safety net, guaranteeing that the ASC would not lose money on the product. By promising to make the ASC "whole" in the event of insurance denials or low reimbursement rates, EyePoint effectively removed the economic barriers to prescribing the drug. Under the Anti-Kickback Statute, providing such financial guarantees to a healthcare provider in exchange for the purchase of a drug covered by federal programs is considered an illegal inducement.

Furthermore, the government alleged that EyePoint’s distribution of "excessive" free samples acted as a secondary kickback. While pharmaceutical companies are permitted to provide samples for patient use under specific guidelines, the government contended that EyePoint used these samples as a form of currency to reward high-volume ASCs or to further offset the costs of the purchased units. This practice can lead to "double-dipping" or improper billing if samples are used in a way that generates profit for the clinic at the expense of federal taxpayers.

Financial Settlement and Whistleblower Reward

The total settlement amount of approximately $4.66 million will be distributed primarily to the federal government, with a separate portion of $21,518.68 allocated to various participating states that also funded the claims through Medicaid programs. The resolution of this matter was facilitated by the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens or entities with knowledge of fraud against the government to file a lawsuit on behalf of the United States.

In this instance, the whistleblower was AFCE LLC. Under the False Claims Act, a relator (whistleblower) is entitled to a percentage of the recovered funds as an incentive for reporting the misconduct. As part of the settlement, AFCE LLC will receive $791,768.74 from the federal recovery. This mechanism remains one of the government’s most effective tools for uncovering hidden fraud in the complex pharmaceutical supply chain. The case is officially captioned U.S. ex rel. AFCE LLC, et al., v. EyePoint Pharmaceuticals, Inc., No. 21-CV-12071, filed in the District of Massachusetts.

Corporate Integrity and Oversight

As a condition of the settlement, EyePoint Pharmaceuticals has entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). A CIA is a rigorous compliance framework imposed on healthcare entities that have been accused of fraud. It is designed to ensure that the company adheres to federal healthcare laws in the future and to prevent a recurrence of the conduct that led to the settlement.

Under the terms of the CIA, EyePoint must implement a series of internal reforms. These typically include the appointment of a dedicated compliance officer, the establishment of a compliance committee, and the implementation of a formal training program for employees involved in sales and marketing. Perhaps most importantly, the agreement requires an annual review by an Independent Review Organization (IRO). This third-party auditor will examine EyePoint’s systems, transactions, and practices to ensure they remain within the bounds of the law. Failure to comply with the CIA can result in significant financial penalties or even exclusion from participating in federal healthcare programs like Medicare and Medicaid—a "death penalty" for most pharmaceutical firms.

Eyepoint pharmaceuticals to pay $4.6 million to resolve false claims act allegations — DOJ

Official Statements and Government Priorities

The settlement was the result of a multi-agency effort involving the Justice Department’s Civil Division, the Commercial Litigation Branch (Fraud Section), the U.S. Attorney’s Office for the District of Massachusetts, the FBI, and the HHS-OIG. Officials emphasized that this case is part of a broader crackdown on pharmaceutical companies that attempt to bypass the law to gain market share.

Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division stated, "Kickbacks by pharmaceutical companies increase the cost of drugs used by patients and paid for by federal health care programs. The Civil Division will hold accountable anyone who pays unlawful kickbacks." This sentiment was echoed by United States Attorney Leah B. Micheli, who noted that her office remains committed to protecting patients by removing financial incentives that might lead providers to dispense products that are not medically necessary.

Acting Deputy Inspector General for Investigations Scott J. Lampert of the HHS-OIG highlighted the betrayal of trust inherent in such schemes. "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," Lampert said. He added that the government will continue to aggressively pursue any entity that seeks to "corrupt medical decision-making."

Broader Implications for the Healthcare Industry

The EyePoint settlement serves as a stark warning to the pharmaceutical industry regarding "patient assistance" and "provider assurance" programs. While such programs are often framed as a way to increase patient access to medication, the DOJ has increasingly scrutinized them for potentially violating the Anti-Kickback Statute. If a program’s primary effect is to shield a provider from the financial consequences of choosing one drug over another, it is likely to draw federal investigation.

This case also aligns with the recent launch of the "Task Force to Eliminate Fraud" and the "National Fraud Enforcement Division" by the current administration. These initiatives are designed to enhance the government’s ability to detect waste, abuse, and mismanagement in federal programs. The government’s focus is not only on recovering lost funds but also on ensuring that medical decisions are based on clinical evidence and patient needs rather than the financial interests of drug manufacturers.

The use of the False Claims Act in this matter underscores its role as the primary vehicle for healthcare litigation in the United States. In the last fiscal year alone, the DOJ recovered billions of dollars through FCA settlements, a significant portion of which originated from the healthcare sector. For companies like EyePoint, the cost of the settlement, combined with the administrative burden of a five-year CIA, represents a substantial consequence for aggressive marketing tactics.

Timeline of Events and Investigation

The timeline of the EyePoint case reflects the typical trajectory of a qui tam investigation:

January 2019: EyePoint officially launches DEXYCU in the United States market.
2019–2021: The company allegedly implements the Assurance Program and begins distributing excessive samples to ASCs across the country.
2021: AFCE LLC files a whistleblower lawsuit under the False Claims Act in the District of Massachusetts, prompting a federal investigation.
2021–2023: Federal agents from the FBI and HHS-OIG conduct a deep dive into the company’s internal records, sales data, and communications with ASCs.
March 1, 2023: The period of alleged misconduct ends as the company adjusts its practices in response to the ongoing investigation.
Present: The settlement is finalized, requiring EyePoint to pay over $4.6 million and enter into a five-year monitoring period.

This resolution demonstrates the persistence of federal investigators in tracking pharmaceutical marketing practices over several years. As the government continues to modernize its data analytics capabilities, it is becoming increasingly difficult for companies to hide patterns of improper inducements or irregular billing practices.

Conclusion

The settlement between EyePoint Pharmaceuticals and the United States government marks another chapter in the ongoing effort to purge kickbacks from the American healthcare system. By targeting the financial mechanisms that incentivized ASCs to favor DEXYCU, the DOJ has reaffirmed its stance that medical necessity, not corporate subsidies, must drive patient care. For the broader pharmaceutical industry, the message is clear: marketing programs that provide financial guarantees or excessive freebies to providers will be viewed as unlawful inducements, leading to multimillion-dollar penalties and long-term federal oversight.

July 19, 2026 0 comment

RegTech & Financial Compliance

EyePoint Pharmaceuticals Agrees to Pay $4.6 Million Settlement to Resolve Allegations of Illegal Kickbacks and False Claims Act Violations

by Neng Nana July 19, 2026

written by Neng Nana

EyePoint Pharmaceuticals, Inc., a specialty biopharmaceutical company based in Watertown, Massachusetts, has reached a formal agreement with the United States Department of Justice to pay more than $4.6 million to settle allegations of violating the False Claims Act. The settlement addresses claims that the company engaged in an illegal kickback scheme designed to induce Ambulatory Service Centers (ASCs) to purchase and dispense DEXYCU, a long-acting intraocular steroid used for treating inflammation following cataract surgery. According to the settlement terms, the company will pay $4,657,463.18 to the federal government, alongside an additional $21,518.68 to various participating states whose Medicaid programs were affected by the alleged misconduct.

The resolution of this case highlights the federal government’s ongoing commitment to policing the relationships between pharmaceutical manufacturers and healthcare providers. The allegations centered on a period spanning from January 1, 2019, through March 1, 2023, during which EyePoint allegedly utilized financial incentives and "assurance" programs to manipulate the market for DEXYCU, potentially compromising medical decision-making and increasing costs for federal healthcare programs such as Medicare and Medicaid.

The Nature of the Allegations: The Assurance Program and Free Samples

At the heart of the government’s case was the commercial launch and subsequent marketing of DEXYCU in 2019. DEXYCU is an injectable medication administered at the conclusion of cataract surgery to control postoperative inflammation. Because the drug is administered in a surgical setting, its reimbursement is typically handled through federal programs under specific billing codes. The United States alleged that EyePoint recognized that financial risk—specifically the risk that a provider might not be fully reimbursed by an insurer—could deter ASCs from choosing DEXYCU over cheaper or more established alternatives.

To mitigate this risk and ensure high volume sales, EyePoint allegedly implemented what it termed an "Assurance Program." Under this program, EyePoint reportedly offered to reimburse or compensate ASCs if a health insurer denied a claim for DEXYCU or if the reimbursement amount fell below the ASC’s actual purchase cost. By providing this financial safety net, the government argued that EyePoint effectively removed the financial risk associated with the drug, creating an unlawful inducement for providers to select EyePoint’s product over others.

Furthermore, the government alleged that EyePoint provided ASCs with excessive quantities of free samples of DEXYCU. While providing samples for patient use is a common industry practice, the Department of Justice contended that these samples were distributed in such high volumes that they functioned as a form of kickback. By providing free units, the company allowed ASCs to lower their overall cost of goods or even profit from the spread between the zero-cost sample and the reimbursement received for other units, thereby incentivizing the continued use and purchase of the medication.

Chronology of the Case and Legal Framework

The investigation into EyePoint Pharmaceuticals was initiated following a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. The case, captioned U.S. ex rel. AFCE LLC, et al., v. EyePoint Pharmaceuticals, Inc., was filed in the United States District Court for the District of Massachusetts. Under the False Claims Act, private citizens or entities (known as relators) can sue on behalf of the government when they have evidence of fraud against federal programs. If the government’s intervention or subsequent settlement is successful, the relator is entitled to a portion of the recovery.

In this instance, the relator, AFCE LLC, will receive $791,768.74 as its share of the federal settlement. The timeline of the case reflects several years of intensive investigation:

January 2019: EyePoint launches DEXYCU and begins the alleged "Assurance Program" and sample distribution strategy.
2021: The whistleblower complaint is filed under seal, prompting a federal investigation led by the Justice Department’s Civil Division and the U.S. Attorney’s Office.
March 2023: The period of the alleged misconduct concludes as federal oversight and investigative pressure mount.
2024-2025: Negotiations lead to the final settlement agreement and the imposition of a Corporate Integrity Agreement.

The settlement is a result of a coordinated effort involving the Commercial Litigation Branch (Fraud Section) of the Justice Department, the FBI, and the Department of Health and Human Services Office of Inspector General (HHS-OIG).

Corporate Integrity Agreement and Future Compliance

As a condition of the settlement, EyePoint Pharmaceuticals has entered into a comprehensive five-year Corporate Integrity Agreement (CIA) with the HHS-OIG. This agreement is a common tool used by the federal government to ensure that healthcare companies that have settled fraud allegations do not repeat their mistakes.

The CIA requires EyePoint to implement a series of rigorous compliance measures, including:

Independent Monitoring: The company must engage an Independent Review Organization (IRO) to conduct regular audits of its marketing and sales practices, specifically focusing on its relationships with healthcare providers and the distribution of samples.
Executive Accountability: Senior leadership at EyePoint will be required to certify the company’s compliance with federal healthcare program requirements annually.
Compliance Training: Mandatory training for employees regarding the Anti-Kickback Statute and the False Claims Act.
Reporting Requirements: EyePoint must report any "reportable events"—potential violations of law—directly to the HHS-OIG within specified timeframes.

Failure to adhere to the terms of the CIA can result in significant stipulated financial penalties or, in extreme cases, exclusion from participation in federal healthcare programs like Medicare and Medicaid, which would be catastrophic for a pharmaceutical manufacturer.

Official Statements and Government Response

Federal officials were clear in their condemnation of the alleged practices, emphasizing that financial incentives should never dictate medical care.

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

United States Attorney Leah B. (Simeone) echoed these sentiments, noting that her office remains vigilant in protecting the integrity of the healthcare system. "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."

Scott J. Lampert, Acting Deputy Inspector General for Investigations at HHS-OIG, highlighted the betrayal of trust inherent in kickback schemes. "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. We will aggressively pursue any entity that seeks to corrupt medical decision-making."

Broader Implications for the Pharmaceutical Industry

The EyePoint settlement serves as a stark warning to the pharmaceutical industry regarding the use of "patient assistance" or "reimbursement assurance" programs. While these programs are often marketed as a way to help patients access medication, the government increasingly views them with skepticism when they appear to insulate providers from financial risk or serve as a surrogate for price discounts that are not properly disclosed.

From a regulatory standpoint, this case underscores two critical legal pillars:

The Anti-Kickback Statute (AKS): This law prohibits the knowing and willful payment of "remuneration" to induce the purchase of items or services paid for by a federal healthcare program. The EyePoint case demonstrates that "remuneration" is defined broadly, encompassing not just cash but also "assurance" against loss and excessive free goods.
The False Claims Act (FCA): Claims for payment submitted to Medicare or Medicaid that result from a violation of the Anti-Kickback Statute are considered "false" under the FCA, leading to treble damages and significant per-claim penalties.

This settlement also reflects the priorities of the newly launched Task Force to Eliminate Fraud and the National Fraud Enforcement Division. These administrative bodies were established to enhance the government’s ability to detect and prosecute fraud in federal programs, which currently costs American taxpayers billions of dollars annually.

Impact on Healthcare Providers and Patients

For Ambulatory Service Centers and individual practitioners, the EyePoint case is a reminder of the legal risks involved in accepting aggressive marketing incentives. When a manufacturer offers to "guarantee" reimbursement or provides an unusually high volume of samples, it creates a potential liability for the provider if those incentives lead to the submission of claims to federal insurers.

For patients, the impact of such schemes is often indirect but profound. When financial incentives drive the selection of a drug, there is a risk that the choice is not based solely on clinical efficacy or patient-specific needs. Furthermore, these practices contribute to the inflation of healthcare costs, as federal programs are forced to pay for medications that might have been chosen over more cost-effective alternatives due to the hidden financial arrangements between the manufacturer and the provider.

As EyePoint Pharmaceuticals begins its five-year period under federal monitoring, the case stands as a significant entry in the Department of Justice’s ongoing "war on fraud." It illustrates the powerful role of whistleblowers and the extensive resources the federal government is willing to deploy to ensure that medical decisions remain in the hands of clinicians, unclouded by illegal financial inducements.

July 19, 2026 0 comment

RegTech & Financial Compliance

EyePoint Pharmaceuticals to Pay Over $4.6 Million to Resolve False Claims Act Allegations Regarding DEXYCU Kickback Scheme

by Raul Delapena Setiawan July 18, 2026

written by Raul Delapena Setiawan

EyePoint Pharmaceuticals, Inc., a Massachusetts-based pharmaceutical company, has reached a formal agreement with the United States Department of Justice to pay a total of $4,657,463.18 to settle allegations that it violated the False Claims Act. The settlement addresses claims that the company engaged in an illegal kickback scheme designed to induce Ambulatory Service Centers (ASCs) to purchase and dispense the drug DEXYCU. The alleged misconduct took place over a four-year period, beginning shortly after the drug’s commercial launch in early 2019 and continuing through March 1, 2023.

The settlement resolves allegations that EyePoint utilized two primary methods to improperly influence medical providers: a financial "Assurance Program" and the distribution of excessive free samples. These actions were allegedly intended to bypass the competitive market and ensure that DEXYCU—a physician-administered injectable drug used to treat inflammation following cataract surgery—was favored by surgical centers, regardless of whether it was the most cost-effective or medically necessary option for the patient.

The Nature of the Alleged Kickback Scheme

The core of the government’s case against EyePoint Pharmaceuticals centers on the Anti-Kickback Statute, which prohibits pharmaceutical companies from offering or paying any form of "remuneration" to induce the purchase or recommendation of drugs covered by federal healthcare programs, such as Medicare and Medicaid. According to federal prosecutors, EyePoint’s "Assurance Program" functioned as a prohibited financial inducement.

Under this program, EyePoint reportedly offered to reimburse or compensate ASCs if a health insurance provider denied a claim for DEXYCU or if the reimbursement amount fell below the ASC’s actual purchase cost. By providing this financial safety net, EyePoint effectively removed the financial risk associated with stocking and administering the drug. This "spread" or "risk-free" guarantee created a powerful incentive for ASCs to choose DEXYCU over competing treatments, as they were insulated from any potential financial loss.

In addition to the Assurance Program, the United States alleged that EyePoint provided ASCs with an excessive number of free samples of DEXYCU. While the distribution of samples is a common practice in the pharmaceutical industry, the government contended that the volume provided by EyePoint went beyond legitimate clinical needs. These samples were allegedly used as a tool to induce providers to purchase the drug for their broader patient populations, further blurring the lines between clinical promotion and illegal financial inducement.

Chronology of Events and Investigative Oversight

The timeline of the case begins with the commercial launch of DEXYCU in 2019. DEXYCU (dexamethasone intraocular suspension) 9% was designed as a long-acting steroid treatment administered at the conclusion of cataract surgery. Because cataract surgery is one of the most frequently performed procedures among the elderly population in the United States, the drug targeted a massive market primarily funded by Medicare Part B.

Between January 1, 2019, and March 1, 2023, EyePoint allegedly aggressive marketed the drug through the aforementioned programs. The investigation into these practices was initiated following the filing of a "qui tam," or whistleblower, lawsuit by AFCE LLC. Under the False Claims Act, private parties (known as relators) can file lawsuits on behalf of the government if they have evidence of fraud against federal programs.

The investigation was a multi-agency effort involving:

The Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section.
The United States Attorney’s Office for the District of Massachusetts.
The Department of Health and Human Services Office of Inspector General (HHS-OIG).
The Federal Bureau of Investigation (FBI).

The resolution of the matter was led by Fraud Section Trial Attorney Margaret F. Thomas and Assistant U.S. Attorneys from the District of Massachusetts. Following the federal settlement, EyePoint also entered into separate agreements to pay an additional $21,518.68 to various participating states to resolve related claims involving state-funded healthcare programs.

The Role of the Whistleblower and Qui Tam Provisions

The False Claims Act remains the government’s most potent weapon in the fight against healthcare fraud. A critical component of the Act is its qui tam provision, which encourages individuals or entities with "inside" information to come forward. In this case, the relator, AFCE LLC, will receive a significant portion of the settlement proceeds as a reward for initiating the action.

Specifically, the relator is set to receive $791,768.74 from the federal portion of the settlement. This mechanism is designed to incentivize transparency and hold corporations accountable for complex financial schemes that might otherwise go undetected by federal regulators. The case is officially captioned as U.S. ex rel. AFCE LLC, et al., v. EyePoint Pharmaceuticals, Inc., No. 21-CV-12071 (D. Mass.).

Corporate Integrity and Future Compliance Mandates

As a condition of the settlement, EyePoint Pharmaceuticals has entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG. This agreement is a standard but rigorous requirement for healthcare entities involved in False Claims Act settlements.

The CIA imposes several strict obligations on EyePoint to ensure future compliance with federal healthcare laws:

Independent Monitoring: The company must hire an external Independent Review Organization (IRO) to conduct regular audits of its physician relationships, marketing practices, and sample distribution protocols.
Compliance Leadership: EyePoint is required to maintain a compliance officer and a compliance committee to oversee the implementation of the CIA.
Training and Education: All employees and relevant third-party contractors must undergo mandatory training regarding the Anti-Kickback Statute and the False Claims Act.
Reporting Requirements: The company must submit annual reports to the HHS-OIG detailing its compliance efforts and disclosing any potential violations found during internal or external audits.

This five-year period of oversight is intended to fundamentally change the corporate culture at EyePoint and prevent a recurrence of the behaviors that led to the $4.6 million penalty.

Official Statements and Government Response

Federal officials were clear in their condemnation of the practices alleged in the EyePoint case, emphasizing that kickbacks undermine the fiduciary duty doctors owe to their patients.

"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."

United States Attorney Leah B. (District of Massachusetts) echoed these sentiments, stating, "As we have for years, our Office will continue to hold pharmaceutical manufacturers accountable for paying illegal kickbacks. 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."

Acting Deputy Inspector General for Investigations Scott J. Lampert of the HHS-OIG added that such schemes "betray the patients who rely on them" and "corrupt medical decision-making." He emphasized that the OIG would remain aggressive in pursuing entities that attempt to boost profits through unlawful financial inducements.

Broader Impact on the Pharmaceutical Industry and ASCs

The EyePoint settlement serves as a warning to other pharmaceutical manufacturers and Ambulatory Service Centers. In recent years, the DOJ has increasingly focused on the relationship between drug makers and ASCs, particularly in the ophthalmic space. Cataract surgery is a high-volume, high-profit area for many clinics, and the introduction of new "J-code" drugs (injectables billed under Medicare Part B) has created numerous opportunities for improper financial arrangements.

The "Assurance Program" model is of particular interest to regulators. Any program that guarantees a provider against financial loss on a drug purchase is likely to be viewed as a kickback. This is because the provider’s choice of drug should be based on clinical efficacy and the best interests of the patient, rather than a guarantee that the clinic’s profit margins will remain intact.

Furthermore, the settlement highlights the risks associated with sampling programs. While samples are intended to allow physicians to gain experience with a new medication, they cannot be used as a "buy-in" or a reward for a provider’s loyalty to a specific brand.

The "War on Fraud" and the New Task Force

This settlement comes at a time when the federal government is intensifying its focus on white-collar crime and healthcare fraud. This year, the administration launched the "Task Force to Eliminate Fraud" and the "National Fraud Enforcement Division." These entities are designed to enhance the government’s ability to detect and prosecute waste and abuse in federal programs.

The DOJ has noted that when unscrupulous actors exploit Medicare and Medicaid for personal gain, they not only defraud the taxpayer but also disadvantage law-abiding American businesses. The Civil Division’s enforcement of the False Claims Act has recovered billions of dollars over the last decade, and officials indicate that healthcare fraud will remain a top priority for the foreseeable future.

Conclusion

The $4.6 million settlement with EyePoint Pharmaceuticals marks the end of a multi-year investigation into the marketing of DEXYCU. While the settlement is not an admission of liability by the company, the accompanying five-year Corporate Integrity Agreement ensures that EyePoint will operate under a microscope for the next half-decade. For the broader healthcare industry, the message is clear: financial arrangements that shield providers from risk or provide excessive inducements will be met with rigorous investigation and substantial financial penalties. As the DOJ continues to leverage the False Claims Act and support whistleblowers, the cost of non-compliance in the pharmaceutical sector continues to rise.

July 18, 2026 0 comment

RegTech & Financial Compliance

EyePoint Pharmaceuticals to Pay 4.6 Million Dollars to Resolve False Claims Act Allegations Involving Kickback Schemes for Ocular Drug DEXYCU

by Nila Kartika Wati July 18, 2026

written by Nila Kartika Wati

EyePoint Pharmaceuticals, Inc., a biopharmaceutical company headquartered in Watertown, Massachusetts, has reached a settlement with the United States government, agreeing to pay $4,657,463.18 to resolve allegations that it violated the False Claims Act. The settlement addresses claims that the company engaged in an illegal kickback scheme designed to induce ambulatory service centers (ASCs) to purchase and dispense DEXYCU, an injectable steroid used to treat inflammation following cataract surgery. According to the Department of Justice, these activities occurred between January 1, 2019, and March 1, 2023, creating a period of several years where medical decision-making was allegedly tainted by financial incentives.

The resolution of this matter highlights the federal government’s ongoing commitment to policing the relationship between pharmaceutical manufacturers and healthcare providers. In addition to the federal payment, EyePoint has agreed to pay an additional $21,518.68 to several participating states whose Medicaid programs were affected by the alleged misconduct. As part of the settlement, EyePoint has also entered into a comprehensive five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which will mandate strict oversight of the company’s compliance and marketing practices moving forward.

The Mechanics of the Alleged Kickback Scheme

The core of the government’s allegations involves two primary methods through which EyePoint allegedly induced ASCs to utilize DEXYCU over competing treatments. Following the commercial launch of the drug in early 2019, EyePoint faced the challenge of penetrating a competitive market for post-operative ocular care. To gain market share, the government alleges that the company implemented what it termed an "Assurance Program."

Under the parameters of this Assurance Program, EyePoint allegedly offered to reimburse or compensate ASCs if their claims for DEXYCU were denied by health insurers or if the reimbursement rate fell below the purchase cost the ASC had paid to EyePoint. In the healthcare industry, such "make-whole" arrangements are often viewed as illegal inducements because they eliminate the financial risk for the provider, thereby encouraging them to select a specific drug based on financial safety rather than clinical superiority or cost-effectiveness for the taxpayer.

Furthermore, the United States alleged that EyePoint provided excessive quantities of free samples of DEXYCU to ASCs. While the distribution of drug samples is a common industry practice, the government contended that the volume and frequency of these samples exceeded legitimate clinical needs and functioned as a form of "in-kind" kickback. By providing free units that could be dispensed to patients, the company effectively lowered the net cost of the drug for the centers, creating an artificial financial incentive to favor EyePoint’s product in their surgical protocols.

Background on DEXYCU and the Ophthalmic Market

DEXYCU (dexamethasone intraocular suspension) was approved by the U.S. Food and Drug Administration (FDA) as a long-acting, single-dose injectable steroid. It was designed to replace the traditional regimen of steroid eye drops that patients must self-administer for several weeks following cataract surgery. Cataract surgery is one of the most frequently performed medical procedures in the United States, with millions of operations conducted annually, primarily on the elderly population covered by Medicare.

Because DEXYCU is administered by the physician during the surgery, it is typically billed under Medicare Part B or other medical insurance, rather than through a pharmacy benefit. This billing structure places the financial responsibility for purchasing the drug on the surgical facility, which then seeks reimbursement from insurers. The "Assurance Program" was specifically designed to address the "buy-and-bill" anxiety felt by ASCs, who feared that if Medicare or private insurers did not fully cover the high cost of the injectable, the facility would be left with a significant financial loss. By removing this risk, EyePoint allegedly bypassed the natural market forces that keep drug prices and usage in check.

The Role of the Whistleblower and Qui Tam Litigation

The investigation into EyePoint’s marketing practices was initiated under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private parties with knowledge of fraud against the government to file a lawsuit on behalf of the United States. In this case, the action was brought by AFCE LLC.

Whistleblowers, known legally as "relators," play a critical role in the enforcement of healthcare laws, as they often have access to internal documents and communications that government investigators might not otherwise see. As a reward for bringing the misconduct to light and assisting in the recovery of federal funds, AFCE LLC will receive a portion of the settlement proceeds. Specifically, the relator is slated to receive $791,768.74 from the federal recovery.

The successful resolution of this case, captioned U.S. ex rel. AFCE LLC, et al., v. EyePoint Pharmaceuticals, Inc., demonstrates the power of the False Claims Act as a tool for transparency. Without the intervention of the relator, the Assurance Program might have continued to operate unnoticed, potentially costing federal healthcare programs millions more in unnecessary expenditures.

Official Statements and Government Response

Federal officials were clear in their condemnation of the alleged practices, emphasizing that kickbacks have no place in the American healthcare system. Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division noted that illegal incentives drive up costs for everyone. "Kickbacks by pharmaceutical companies increase the cost of drugs used by patients and paid for by federal health care programs," Shumate stated. "The Civil Division will hold accountable anyone who pays unlawful kickbacks."

United States Attorney Leah B. [Foley/Wainwright – reference to District of Massachusetts] echoed these sentiments, highlighting the office’s long-standing focus on pharmaceutical integrity. "As we have for years, our Office will continue to hold pharmaceutical manufacturers accountable for paying illegal kickbacks. Through these efforts, we protect patients by removing providers’ financial incentives to prescribe or dispense products that may not be medically necessary."

Acting Deputy Inspector General for Investigations Scott J. Lampert of the HHS-OIG underscored the betrayal of trust inherent in such schemes. "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," Lampert said. He added that the HHS-OIG would "aggressively pursue any entity that seeks to corrupt medical decision making."

The Five-Year Corporate Integrity Agreement

A significant component of the resolution is the Corporate Integrity Agreement (CIA) EyePoint entered into with the HHS-OIG. A CIA is a common requirement in healthcare fraud settlements involving large corporations. It serves as a probationary period during which the company must adhere to strict compliance standards to ensure that the misconduct does not recur.

Under the terms of the five-year agreement, EyePoint will be required to:

Establish a Compliance Committee: This body must include senior management and be overseen by a Board of Directors committee.
Implement Mandatory Training: Employees and contractors involved in sales and marketing must undergo regular training on the Anti-Kickback Statute and the False Claims Act.
Engage an Independent Review Organization (IRO): An outside firm must be hired to conduct annual reviews of the company’s systems, policies, processes, and transactions.
Report to the HHS-OIG: The company must provide regular reports on its compliance efforts and disclose any further violations of healthcare laws.

Failure to comply with the CIA can result in significant financial penalties or, in extreme cases, exclusion from participating in federal healthcare programs like Medicare and Medicaid—a move that would be catastrophic for any pharmaceutical manufacturer.

Broader Impact on the Pharmaceutical Industry

The EyePoint settlement is part of a broader trend of increased enforcement targeting "patient assistance" and "provider assurance" programs. While these programs are often marketed as ways to increase patient access to expensive medications, the DOJ has increasingly viewed them as sophisticated covers for kickbacks. When a manufacturer offsets the financial risk for a provider, it effectively "pays" that provider to choose their product over a competitor’s, violating the Anti-Kickback Statute.

The investigation was a collaborative effort involving several high-level agencies, including the Justice Department’s Civil Division, the Commercial Litigation Branch, the Fraud Section, the U.S. Attorney’s Office for the District of Massachusetts, the Federal Bureau of Investigation (FBI), and the HHS-OIG. This multi-agency approach reflects the government’s "war on fraud," which was further bolstered this year by the launch of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.

These new administrative bodies are designed to enhance the government’s ability to detect and prosecute fraud, waste, and abuse in federal programs. By pooling resources and expertise, the administration aims to recover billions of dollars for American taxpayers and ensure that medical decisions are based on patient health rather than corporate profit margins.

Conclusion and Future Outlook

The settlement with EyePoint Pharmaceuticals serves as a stern warning to the pharmaceutical industry that the government is closely monitoring how drugs are marketed and sold to surgical centers and hospitals. As medical technology advances and new, expensive injectables enter the market, the temptation to offer financial "safety nets" to providers remains high. However, the $4.6 million penalty and the subsequent five years of federal oversight demonstrate that the cost of such shortcuts far outweighs any temporary gain in market share.

For the public, the resolution of this case is a victory for the integrity of the healthcare system. It reinforces the principle that the relationship between a doctor and a patient should be sacred, free from the corrupting influence of undisclosed financial arrangements. As the Task Force to Eliminate Fraud continues its work, industry observers expect to see a continued surge in False Claims Act litigation, particularly in the ophthalmic and surgical sectors where "buy-and-bill" drugs are most prevalent.

Taxpayers and patients alike are encouraged to remain vigilant. The Department of Health and Human Services continues to maintain its hotline (800-HHS-TIPS) for reporting potential fraud, waste, or mismanagement. With the government’s renewed emphasis on accountability, the EyePoint case likely represents just one chapter in a much larger effort to cleanse the federal healthcare landscape of unscrupulous financial practices.

July 18, 2026 0 comment

RegTech & Financial Compliance

Eyepoint pharmaceuticals to pay $4.6 million to resolve false claims act allegations — DOJ

by Asep Darmawan July 17, 2026

written by Asep Darmawan

EyePoint Pharmaceuticals, Inc., a Massachusetts-based biopharmaceutical company, has reached a settlement with the United States government, agreeing to pay $4,657,463.18 to resolve allegations that it violated the False Claims Act. The settlement addresses claims that EyePoint engaged in a sophisticated kickback scheme designed to induce Ambulatory Service Centers (ASCs) to purchase and dispense DEXYCU, a physician-administered injectable drug used to treat ocular inflammation following cataract surgery. The alleged misconduct took place over a four-year period, beginning with the drug’s commercial launch on January 1, 2019, and continuing through March 1, 2023.

According to the Department of Justice (DOJ), the settlement also includes an additional $21,518.68 to be paid to several participating states whose Medicaid programs were affected by the alleged fraudulent billing. Beyond the financial penalties, EyePoint has entered into a rigorous five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which will require the company to implement significant compliance reforms and undergo regular external monitoring.

The Mechanics of the Alleged Kickback Scheme

The core of the government’s allegations involves two primary methods EyePoint used to manipulate the market for DEXYCU: the implementation of an "Assurance Program" and the distribution of excessive free samples. Under the federal Anti-Kickback Statute, pharmaceutical companies are prohibited from offering or paying any remuneration to induce the purchase or recommendation of items or services covered by federal healthcare programs, such as Medicare and Medicaid.

The "Assurance Program" was characterized by the government as a financial safety net for healthcare providers. EyePoint allegedly promised to reimburse or compensate ASCs if health insurers denied a claim for DEXYCU or if the insurance reimbursement fell below the ASC’s actual purchase cost. In the highly regulated world of federal healthcare, such "money-back guarantees" are viewed as illegal inducements because they eliminate the financial risk for the provider, thereby encouraging the use of a specific drug based on financial gain rather than clinical necessity.

Furthermore, the United States alleged that EyePoint provided ASCs with an excessive volume of free samples of DEXYCU. While the distribution of limited samples for patient trial is generally permitted, the government contended that EyePoint’s distribution was so vast that it functioned as a form of "price-leveling" or a "kickback in kind." By providing a high volume of free units, the company effectively lowered the net cost of the drug for the ASCs, creating a financial incentive for the facilities to choose DEXYCU over competing treatments.

Contextual Background: DEXYCU and the Cataract Surgery Market

To understand the impact of these allegations, it is necessary to examine the specific medical and economic context of DEXYCU. Approved by the FDA in early 2018, DEXYCU is a long-acting corticosteroid. Unlike traditional post-operative treatments that require patients to self-administer eye drops multiple times a day—a process often fraught with compliance issues—DEXYCU is injected by the surgeon directly into the eye at the conclusion of cataract surgery.

Cataract surgery is one of the most frequently performed medical procedures in the United States, particularly among the elderly population. Because the vast majority of these patients are enrolled in Medicare, the financial stakes for drugs used in these procedures are immense. DEXYCU was marketed as a premium, physician-administered product. Under Medicare Part B, physicians and ASCs typically purchase such drugs and then bill Medicare for the cost plus a small percentage. When a manufacturer guarantees that the provider will never lose money on a drug—or provides enough free samples to inflate the provider’s profit margin—it corrupts the economic structure of the Part B program.

Chronology of the Case and the Whistleblower’s Role

The legal proceedings began not with a government audit, but with a "qui tam" or whistleblower lawsuit. The case, captioned U.S. ex rel. AFCE LLC, et al., v. EyePoint Pharmaceuticals, Inc., was filed in the District of Massachusetts. Under the False Claims Act, private individuals or entities (relators) with knowledge of fraud against the government can file a lawsuit on behalf of the United States.

January 2019: EyePoint officially launches DEXYCU in the U.S. market and allegedly begins the Assurance Program and the aggressive sampling strategy.
2021: The whistleblower, AFCE LLC, files a confidential complaint under seal, alerting the Department of Justice to the alleged kickback practices.
2021–2023: Federal investigators from the FBI and HHS-OIG, in coordination with the DOJ’s Civil Division, conduct an extensive investigation into EyePoint’s marketing and sales records.
March 2023: The period of alleged misconduct concludes.
2024: The parties reach a settlement agreement. As part of the resolution, the whistleblower, AFCE LLC, will receive a "relator’s share" of $791,768.74 from the federal recovery, as incentivized by the False Claims Act.

Official Statements and Government Response

The settlement was announced as part of a broader, ongoing effort by the Biden-Harris Administration to crack down on healthcare fraud and rising drug prices. Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division emphasized the danger of such schemes, stating, "Kickbacks by pharmaceutical companies increase the cost of drugs used by patients and paid for by federal health care programs. The Civil Division will hold accountable anyone who pays unlawful kickbacks."

Leah B., the United States Attorney for the District of Massachusetts, echoed these sentiments, noting that such financial incentives can cloud medical judgment. "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," she said.

Acting Deputy Inspector General for Investigations Scott J. Lampert of the HHS-OIG highlighted the betrayal of trust inherent in these cases. "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," Lampert remarked. He added that the HHS-OIG would continue to "aggressively pursue any entity that seeks to corrupt medical decision making."

The Corporate Integrity Agreement: A Five-Year Oversight

A critical component of this resolution is the five-year Corporate Integrity Agreement (CIA) EyePoint entered into with the HHS-OIG. A CIA is a standard tool used by the government to ensure that a company does not revert to fraudulent practices after a settlement.

Under this agreement, EyePoint is required to:

Establish a Compliance Committee: Appoint a compliance officer and a committee to oversee the company’s adherence to federal healthcare laws.
Implement Training Programs: Mandate comprehensive compliance training for all employees and executives, particularly those involved in sales and marketing.
Engage an Independent Review Organization (IRO): Hire a third-party auditor to conduct annual reviews of the company’s systems, transactions, and practices to ensure they meet the requirements of the Anti-Kickback Statute.
Reporting Obligations: Regularly report to the HHS-OIG regarding its compliance efforts and disclose any "reportable events," such as potential violations of law.

Failure to comply with the terms of the CIA can lead to significant stipulated penalties or even exclusion from participating in Medicare and Medicaid—a "death penalty" for most pharmaceutical companies.

Broader Impact and Industry Analysis

The EyePoint settlement serves as a stark warning to the pharmaceutical and medical device industries regarding "value-added" programs and physician-support initiatives. While companies often frame "Assurance Programs" as a way to assist patients in accessing medication, the DOJ’s stance remains clear: if a program shifts the financial risk away from the provider in a way that induces sales, it is likely an illegal kickback.

This case also underscores the increasing reliance of the federal government on the False Claims Act as a primary tool for market regulation. In the last decade, the DOJ has recovered billions of dollars through FCA litigation, much of it initiated by whistleblowers. The involvement of the newly launched "Task Force to Eliminate Fraud" and the "National Fraud Enforcement Division" indicates that the administration is dedicating more resources to identifying and prosecuting sophisticated financial schemes in the healthcare sector.

For the healthcare industry, the implications are twofold. First, pharmaceutical companies must scrutinize their marketing programs—especially those involving samples and financial guarantees—to ensure they do not run afoul of the Anti-Kickback Statute. Second, Ambulatory Service Centers and other providers must be wary of accepting "assistance" from manufacturers that seems "too good to be true," as they too can be held liable for participating in kickback schemes.

As the government continues to battle rising healthcare costs, the scrutiny of physician-administered drugs and the relationships between manufacturers and providers is expected to intensify. The resolution of the EyePoint matter demonstrates that even relatively smaller settlements (in the $4-5 million range) are pursued with the full weight of federal investigative agencies to maintain the integrity of the American healthcare system.

July 17, 2026 0 comment