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Lundbeck to pay $52.6M to settle US probe into donations to patient charities

H. Lundbeck A/S said it will probably pay $52.6 million to settle the U.S.Justice Department investigation into allegedly improper donations to charities that provide financial help to patients who use the company's products.

The agreement in principle between the Danish drugmaker's U.S. unit, Lundbeck LLC, and the Justice Department is subject to further negotiation. It does not involve any admission of guilt by Lundbeck LLC.

The company said it will recognize the settlement expense as a charge in the second quarter of 2018.

In 2016, a Lundbeck unit received a subpoena from the U.S. attorney's office in Boston regarding a probe into payments to patient-assistance charities as well as sales and marketing practices for blood-pressure therapy Northera and Huntington's disease treatment Xenazine.

The potential settlement comes as U.S. investigators conduct an industrywide probe into various drugmakers' donations to patient-assistance charities.

Dublin-based Jazz Pharmaceuticals PLC has agreed to pay $57 million to settle a Justice Department probe regarding donations to charities supporting Medicare patients.

The U.S. prohibits drugmakers from covering out-of-pocket costs for patients enrolled in a Medicare program for the elderly so that patients are not induced into buying a certain company's drug.

The companies, however, can donate to charities supporting the patients as long as they stay independent.