Culper Research Short Tarsus Pharmaceuticals: A Medicare Copay 'Charity' That Loops Back to the Drug
On July 1, 2026, Culper Research published a short report on Tarsus Pharmaceuticals, Inc. (NASDAQ: TARS), whose sole commercial product is XDEMVY, an eyedrop used to treat demodex blepharitis. The firm alleges that XDEMVY's growth to roughly $519 million in trailing-twelve-month revenue has been driven by a company-funded charitable foundation Medicare copay scheme that it says raises serious Anti-Kickback Statute (AKS) concerns, and that the drug's true addressable market is roughly 20% of what Tarsus claims.
Epistemic note. Culper Research is a short seller that discloses a financial interest in the decline of Tarsus stock. Its allegations — including the characterization of the Healthwell Foundation relationship as an illegal kickback scheme, the specialty-pharmacy practices described, and the market-size critique — are the opinions of a third party with a disclosed short position. None of this has been independently verified by The Forensic Ledger, adjudicated by a regulator or court, or admitted by Tarsus Pharmaceuticals.
A charitable fund that launched one month after the drug
Culper states that the Healthwell Foundation launched its blepharitis charitable fund in September 2023 — a single month after Tarsus launched XDEMVY — despite, the report says, no other meaningful change in the blepharitis treatment landscape at that time. The report alleges that Tarsus appears to be the fund's overwhelming, if not sole, donor, citing an analysis of Tarsus's own financial statements that it says shows charitable donations of $5.7 million in 2023, $31.2 million in 2024, and an estimated $78.5 million in 2025 — figures the report says are nearly identical to the blepharitis fund's total disclosed donations received ($5.1 million in 2023 and $30.0 million in 2024) according to IRS filings. Culper states the alignment will hold when Healthwell's 2025 statements are released in Fall 2026.
The OIG-HHS red flags Culper says Tarsus hits
The report cites several signposts that the Office of Inspector General of the Department of Health and Human Services (OIG-HHS) has explicitly flagged as evidence of a manufacturer's intent to funnel copay support to its own drug:
- Donations tracking revenue. Tarsus's 'charitable giving' has exploded in lockstep with XDEMVY revenues, the report states.
- A single-drug fund in disguise. OIG-HHS often prohibits funds that cover only a single drug. Healthwell claims to cover over a dozen low-cost blepharitis treatments, but Culper calls the alternatives 'purely window dressing,' noting that Healthwell itself touts blepharitis grants averaging $680 to $750 per patient per year — a figure the report says is only mathematically possible if XDEMVY, priced at many multiples of the alternatives, represents the vast majority of disbursements.
- Corroborating channel check. A representative from Carepoint — described as one of Tarsus's top two specialty pharmacies — estimated to Culper that 50% of XDEMVY Medicare patients obtain Healthwell grants, which the report says implies 91% of the fund's grants are disbursed to XDEMVY patients (and an even higher percentage on a dollar basis).
'They already told on themselves'
Culper states that in its 2024 Form 10-K, Tarsus explicitly named 'patient assistance donations' as a component of SG&A expenses — even though, the report argues, the company already records revenues on a net basis, meaning discounts should be a contra-revenue item rather than an SG&A expense. The report states that in its 2025 Form 10-K, Tarsus scrubbed the donation language in favor of 'patient support functions,' which Culper characterizes as a telling change.
A one-time course and a make-believe TAM
Beyond the kickback allegations, Culper makes a structural argument about the business: XDEMVY is prescribed as a one-time, six-week treatment course meant to eliminate or control demodex blepharitis, giving it little recurring revenue. The report alleges that XDEMVY's true addressable market in DB is roughly 20% of the company's claims, and that as a one-time course it will exhaust a patient pool that is a fraction of what Tarsus represents. Culper states it expects XDEMVY revenues to peak below $800 million at best, and that 2026 results will disappoint as the 'patient assistance' costs buried within SG&A prove far larger than the Street models.
What would falsify this thesis
Falsification would look like: Tarsus disclosing that its Healthwell donations are a small fraction of the blepharitis fund's total receipts, with other named donors; Healthwell restructuring the fund so that XDEMVY represents a minority of disbursements; a Department of Justice or OIG-HHS review that clears the arrangement; XDEMVY demonstrating sustained recurring revenue from repeat courses rather than a one-time exhaust; and the realized addressable market coming in line with the company's claims rather than the ~20% Culper estimates. Corroborating developments would include a DOJ or OIG-HHS investigation or subpoena, a restatement of SG&A versus contra-revenue treatment, a slowdown in XDEMVY's net-revenue growth as the patient pool exhausts, or a reduction in charitable donations that coincides with a revenue decline.
Culper Research's disclosed position
Culper Research disclosed that it, along with its members, partners, affiliates, employees, consultants, clients, and/or investors, has a position in Tarsus securities, that it is likely to transact in the securities immediately following publication, and that it may be long, short, or neutral at any time thereafter regardless of its initial recommendation.
Source
⚖️ Editorial Disclaimer
This article summarizes with citation a research report already published by Culper Research. The Forensic Ledger is an independent newsroom and archive; it is not the author of the underlying allegations and does not adopt them as established fact. All figures and characterizations attributed to the report — including the characterization of the Healthwell Foundation relationship as an illegal kickback scheme, the specialty-pharmacy practices described, and the market-size critique — are the opinions of a third party (Culper Research) that discloses a financial interest in the decline of the covered security. These claims have not been independently verified by The Forensic Ledger, have not been adjudicated by any court or regulator, and may be denied or disputed by Tarsus Pharmaceuticals. This article is published for informational and journalistic purposes only, is not investment advice, and is not a recommendation to buy, sell, or hold any security.
Original reporting by Culper Research. This article is desk analysis prepared by The Forensic Ledger from publicly available sources, summarized with citation to the original.
Not investment advice. This is original reporting and analysis prepared by The Forensic Ledger from publicly available data. Nothing here is a recommendation to buy, sell, or hold any security. Always consult the original source and a licensed professional. See our full disclaimer and source-citation policy.
