Groups that help pay for medication investigated
Critics accuse them of being ‘arm of pharma’
Co-payment assistance groups, created to help patients with the increasing price of drugs to treat medical conditions, are under investigation by federal authorities for possibly skewing the cost of health care to favor drug companies.
The investigations, noted by several drugmakers in their regulatory filings, slowed contributions to at least two of these assistance groups, charities that sometimes pay top executives salaries of $300,000 or more.
Critics of these groups, such as Patients for Affordable Drugs founder David Mitchell, say they drive up the cost of health care by masking the price of drugs and forcing higher costs on the insurance companies that pass them along to consumers and employers. Co-payments are the part of drug bills that insurers require consumers to pay to make them aware of the true cost of medication and encourage them to seek cheaper alternatives such as generic medications.
The money to pay for the groups’ support of patients comes almost entirely from the drug companies themselves or other charities they fund.
“These groups are a marketing arm of pharma, and the fact that patients are caught in the middle of all this is disgusting,” Mitchell says. “Patients shouldn’t have to live month to month at the mercy of the drug companies.”
Leonard Rodgers is a Tempe, Ariz., patient with an incurable blood cancer. The group Good Days helps him with his share of two drugs that have kept him alive and cost more than $200,000 a year.
“If I end up paying for this, I’d have to liquidate all my assets within five
years,” said Rodgers, 80, who relies on Social Security and a modest income from non-profit charity work.
Another group, Patient Services, was started by former pastor Dana Kuhn in
1989 to pay patients’ insurance premiums. Kuhn, who has hemophilia and developed hepatitis C and HIV during a blood transfusion in the early 1980s, was struggling to pay for his own insurance at the time.
Now, Kuhn makes about $600,000 a year at a group that brought in $86 million last year to help 28,000 people pay for their medicine. The salary, he says, is justified because he was a CEO for 28 years, and “we’re really doing the work of the angels.”
As he prepares to retire April 30, Kuhn, 65, is in Washington lobbying for legislation that would protect co-pay and premium assistance from insurers who have been prohibiting its use in plans purchased on the Affordable Care Act (ACA) exchanges.
Drugs could and should be cheaper for everyone, says Paul Kleutghen, a former pharmaceutical industry official. Each $1 million industry donation used to help patients get high-priced drugs has the potential to generate up to
$21 million for the drug company, according to a report last year from Citi Research, so “you cannot call that charity,” Kleutghen says.
“There ought to be something called a moral compass for those companies who make the decision to price at such a high level,” says Kleutghen, who takes
$750 worth of drugs a day for his blood cancer, multiple myeloma, one of the costliest forms of cancer. “If they really want to be charitable, they ought to give the drugs away for free to the poor and lower the prices for all.”
Kickback concerns
The U.S. attorney in Massachusetts and the Health and Human Services (HHS) inspector general have investigated co-payment assistance for more than three years. Kuhn and Clorinda Walley, president of Good Days, say the investigations cast a pall over donations and forced them to shut down funding for drug co-pays for several diseases.
“I understand the problem, but the solution is not to take it out on patients by taking away the help,” says Jackie Trapp, a former Wisconsin high school teacher who has multiple myeloma. “Someone has to have the guts to stand up to the pharmaceutical companies and to punish the people doing the wrong stuff.”
Trapp, 53, became eligible for Medicare in February when she was approved for Social Security disability coverage. After she pays $5,000 out of pocket, she will have to pay 5% of all her medication costs and will need co-pay help.
It’s illegal under federal “anti-kickback” law for drug companies to pay patients’ Medicare drug co-pays, and any patient group that covers these copays can’t steer consumers to their pharmaceutical donors’ drugs. In December, the Justice Department reached a settlement agreement with drugmaker United Therapeutics (UT), which sells several drugs that treat pulmonary arterial hypertension.
The government accused UT of paying kickbacks to Medicare patients through a charity, Caring Voice Coalition (CVC), “that held itself out as an independent charitable foundation.” The drugmaker paid $210 million to resolve the allegations, and the Justice Department rescinded an advisory opinion it issued CVC because the group “allowed its drug company donors to funnel money through CVC in potentially illegal ways that served the drug companies’ financial interests.”
This practice, the HHS inspector general said in a statement, could harm patients, the government and taxpayers because people might take pricey drugs instead of cheaper ones. “The government took these actions to protect the Medicare program and the taxpayers who fund it from schemes like these,” the inspector general’s office said.
The groups say they provide assistance to patients who contact them based on need and their prescriptions, not favoritism toward their donors.
Preaching about co-pays
When Kuhn got a “bad infusion” while hospitalized in the early 1980s, HIV was little understood. By the time doctors knew what was wrong with him, Kuhn had infected his wife. In March 1987, she was dead.
A single father with two preschoolage children, the Presbyterian minister needed a job that had insurance. He found one counseling people with chronic diseases.
As insurance premiums rose, his new type of parishioners took drastic steps to get coverage, including one couple who got divorced so the mother and child could go on Medicaid. Kuhn came up with the concept of premium assistance and first got specialty drugstores to fund it until he branched out into copay help funded by drugmakers when pricey multiple sclerosis drugs hit the market in the early 1990s.
Without this, “people who make too much money to qualify for a free drug program have to deplete their savings or beg or borrow to afford their co-payments,” Kuhn says. “Many of the stories are that people stop taking their drugs, their conditions become exacerbated so they go to emergency rooms where they can’t be denied their drug and can get stabilized for little or no money.”
Then, Kuhn says, the cycle starts all over again.
The investigations have made it worse, Kuhn and Walley say. Patient Service’s funding was down 17% last year. Walley says her funding is flat, and she had to slash the number of diseases supported. Two of the other groups under investigation say it hasn’t had the same effect on them. HealthWell says it doubled the number of people it served last year to 90,000 and had a record year in donations. In a statement, the group attributed that to the “transparency and compliance” it has adhered to since it launched in 2003.
The Patient Access Network Foundation’s contributions have remained constant at about $500 million for the past two years, says CEO Daniel Klein, but the group has to shut down disease funds when they run out in the middle of a quarter or year.
Kuhn says he can’t rely on getting additional money beyond what’s approved in grants.