Drug-assistance programs getting increased scrutiny
Federal, state officials probe co-pay coupons, drug-donor links
Some say help plans are only choices for many patients, but lower prices would help.
Charity-run funds to help patients pay high co-payments face new scrutiny by prosecutors in two states and increased federal oversight, amid increasing questions about how they mask high drug prices.
Three drugmakers — Gilead Sciences, Jazz Pharmaceuticals and Biogen — disclosed subpoenas this spring related to their funding of co-pay assistance programs. Valeant Pharmaceuticals, already under fire for its high drug prices, announced last October that the U.S. attorneys for both the Southern District of New York and Massachusetts had subpoenaed information about its contributions to patient assistance programs.
The Department of Health and Human Services’ office of the inspector general (OIG) stepped up its oversight of patient groups’ relationships with pharmaceutical companies beginning late last year by alerting patient groups to possible violations of Medicare’s anti-kickback rules. A key issue: Groups favoring patients on certain drugs.
“The PR nightmare of patients not getting their drugs would drag down (pharmaceutical companies’) entire pricing approach,” said Peter Bach, a physician who heads the Memorial Sloan Kettering Cancer Center’s Center for Health Policy and Outcomes. “So it’s easily worth it to them to donate to a charity, even if it costs them a few million dollars.”
Several groups, such as the Chronic Disease Fund — now called Good Days — had to change the way they operate following an earlier probe. Bloom-
berg Businessweek reported last month that five former employees of another group, the Caring Voice Coalition, said it sometimes favored donor companies’ drugs over those sold by other firms.
Pam Harris, president and cofounder of Caring Voice Coalition, said in a statement that the group “awards assistance to applicants without regard to any donor’s interest, an individual’s choice of insurer, physician, pharmacy, drug therapy, identity of any referring person or organization, or the amount of any contributions made by a donor whose services or products are used or may be used by an applicant.”
Alan Balch, CEO of the Patient Advocate Foundation, said in a statement that the group’s programs “have never been designed to favor a donor’s drugs or patients on those drugs.” PAF has always been run according to law, its HHS inspector general advisory opinion, “ethical principles and best practices,” Balch said.
The inspector general opinions carry “a lot of weight” for the patient charities and need to be followed closely given the increased attention the assistance programs are getting, said attorney Janet Rehnquist, a former HHS inspector general.
Drugmakers aren’t allowed to directly cover patients’ prescription co-payments for Medicare or Medicaid, but they can donate to patient charities as long as they are independent of the pharmaceutical companies.
Those who get their insurance through employers or private insurance companies can use what are known as co-pay coupons, which drugmakers distribute liberally online and in magazines.
Massachusetts state legislators rejected an attempt this year to permanently lift a ban on the use of the coupons in that state.
One of the issues some find troubling about both co-pay assistance and coupons is that neither are for the uninsured. Insurers say they use co-payments to steer patients to less expensive drugs that are equally effective. So when co-payments are subsidized, patients are insulated from the high cost of a drug and insurers and employers bear the brunt of the drug prices.
Mark Merritt, who heads the Pharmaceutical Care Management Association, notes about 100 million prescriptions are filled each year with co-pay coupons.
“It’s a shadow world with a shadow claims system that’s not transparent to payors or insurers,” he said.
Marc Boutin, CEO of the National Health Council, who doesn’t like co-payment assistance programs, adds, “There’s clearly a gap needs to be filled and I’d want to do it through assistance if the only other options are bankruptcy or life and death.”
“The PR nightmare of patients not getting their drugs would drag down (pharmaceutical companies’) entire pricing approach.” Peter Bach, Memorial Sloan Kettering Cancer Center