Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Charity Funded by #Pharma Draws IRS Probe

Charity Funded by #Pharma Draws IRS Probe | Pharmaguy's Insights Into Drug Industry News |

The U.S. Internal Revenue Service has opened a probe into the tax-exempt status of a charity funded by pharmaceutical companies, threatening a lifeline the industry uses to help patients buy expensive drugs for cancer, multiple sclerosis and other diseases.


The agency is exploring whether the Chronic Disease Fund, a patient-assistance charity funded largely by drugmakers, gave “impermissible” benefits to its corporate donors, according to federal court filings. An IRS analysis found that 95 percent of the $129.3 million the charity spent on co-payment support in its public programs in 2011 went to patients taking drugs made by the very companies that had donated the money, according to court papers.


Donations from drug companies “are nearly all returned to those same pharmaceutical manufacturers as payments for the drugs they make,” attorneys for the IRS said in papers filed in federal courts in California, Pennsylvania and other states, seeking information related to the probe. “In effect, CDF is serving as a conduit for its pharmaceutical manufacturer ‘donors,’” government lawyers said.


The IRS has sent summonses to Roche Holding AG’s Genentech unit, Biogen Inc., Johnson & Johnson, Teva Pharmaceutical Industries Ltd., Novartis AG and Bayer AG, seeking information on donations to CDF. Biogen, Novartis and Bayer said they’re cooperating with the IRS summonses, and Teva declined to comment. J&J said it has no control over how co-pay charities operate. Roche declined to comment on ongoing legal matters.


The IRS probe adds to the growing scrutiny of charities that help poor patients pay for expensive drugs. As prices have soared, pharmaceutical companies’ contributions to patient-assistance charities have sparked accusations that the donations are, in effect, a profitable form of marketing subsidized by U.S. taxpayers. The seven biggest co-pay charities, which cover scores of diseases, reported combined contributions of $1.1 billion in 2014 -- more than double their 2010 figures.


In 19 of 24 disease-specific funds managed by the Chronic Disease Fund that received drug company funding in 2011, 90 percent of the spending ended up going to patients taking the primary donor companies’ drugs, according to an analysis by an IRS agent contained in court filings. The vast majority of the funds had just a single corporate donor, according to the IRS analysis.


Genentech, the biggest funder of CDF in 2011 according to the IRS analysis, donated more than $70 million for at least nine disease funds that year. In seven of the disease funds Genentech supported, almost all the co-pay assistance ended up going to patients taking Genentech drugs, the IRS said.


Another big donor was Celgene Corp., which gave $48.8 million in 2011 to support a fund for multiple myeloma patients, according to the IRS analysis. It was the only drug company donor to the fund and 98 percent of the money CDF spent in that fund went to patients taking drugs from Celgene, the IRS said. Celgene declined to comment.

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Turing Testimony Changes Perception of #Pharma Patient Assistance Programs

Turing Testimony Changes Perception of #Pharma Patient Assistance Programs | Pharmaguy's Insights Into Drug Industry News |

During a recent House hearing on drug pricing, Turing Pharmaceuticals chief commercial officer Nancy Retzlaff, on the stand to testify about a 5,000% price increase on the firm's toxoplasmosis treatment Daraprim, defended the dramatic hike in part by noting that the drugmaker provides access through patient assistance programs. 

Members of the House Committee on Oversight and Government Reform weren't impressed that Turing's strategy, put in place by embattled ex-CEO Martin Shkreli, was good for patients.

“Turing employed a PR strategy to divert attention to patient assistance programs and research and development efforts,” charged Rep. Eleanor Holmes Norton (D-DC), based on disclosures released in documents obtained by the committee. “In other words, instead of keeping the price so it could be purchased by patients and hospitals, you went to patient assistance programs to try to obscure the price.”

The testy exchange signals a shift in the perception of a tactic that industry may once have considered the very essence of what it means to be patient centric. Affordability is no longer an unassailable talking point for industry.

Pharmacy benefit manager Express Scripts was one critic saying that Turing's drug is a poor example of the benefits of patient assistance programs. The medicine has been on the market for decades and was acquired in August by Turing, which raised the price and set off a furor about drug-pricing practices in the US.

“This is an old, simple generic medication, and it shouldn't have a price high enough to even warrant a patient assistance program for low-income patients,” says David Whitrap, a company spokesperson.

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Pfizer Can Fix It! Expands its Patient Assistance Program, Doubling the Income Eligibility for Free Meds

Pfizer Can Fix It! Expands its Patient Assistance Program, Doubling the Income Eligibility for Free Meds | Pharmaguy's Insights Into Drug Industry News |

In response to the ongoing challenges patients face in paying their out-of-pocket costs for their prescription medicines, Pfizer announced today that it will immediately double the allowable income level for its patient assistance program, so that even more patients in need could be eligible to receive their Pfizer medicines for free.

Through Pfizer RxPathways, Pfizer can also help connect patients to other assistance services the company offers if they are not eligible to receive their medicines for free. These programs include:

  • Savings ranging from 35% to 50% off the retail price on Pfizer medicines for uninsured patients regardless of income
  • Medicine access counseling to help patients get connected to the appropriate Pfizer assistance program
  • Insurance counseling for select Pfizer medicines to help patients understand the coverage offered through their insurance plans
  • Co-pay cards for those with private/commercial insurance and information on alternate sources of help, like independent co-pay foundations
  • Referrals to other industry resources that may help if it is discovered a patient is not taking a Pfizer medicine

Patients, health care providers and patient advocates can visit to learn more about Pfizer’s programs, including eligibility criteria and how to apply, and to download applications or program brochures.

Pharma Guy's insight:

When this was first announced via email, I checked the online application process and found a flaw in the system. I pretended to be a patient taking CHANTIX, a Pfizer smoking cessation medication.

In one case I said I was prescribed CHANTIX, had no insurance, and made $24,000 for a family of 2 people. I was then offered a link to the application to qualify for FREE medicine.
But when I answered and said my yearly income was $36,000, I did NOT get the link to apply for FREE medication, but only a reduction in my costs.
I noted on the application form that I should be eligible for free medication if my yearly income for a family of 2 is less than or equal to $63,720. So why didn’t I get a link to this application when, clearly, $36,000 is less than $63,720?
This is important because many patients accessing the system as I did may not have seen the free med application but would have been directed only to the reduced fee version.
I notified Pfizer right away and am happy to report that this problem seems to have been fixed - Pfizer Can Fit It!
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Biogen Too "Patient-Centric?" Feds Investigating Its Patient-Assistance Programs

Biogen Too "Patient-Centric?" Feds Investigating Its Patient-Assistance Programs | Pharmaguy's Insights Into Drug Industry News |

Biogen disclosed in its first-quarter earnings report that it has been subpoenaed by the federal government. The subpoena requests documents detailing its relationship with nonprofit foundations that assist patients taking drugs sold by the company. These foundations often provide financial support to patients who cannot afford their medications. Biogen said it is cooperating with the government inquiry.

It is illegal for drugmakers to give patients copay assistance if they are insured by federally funded healthcare programs. Some drugmakers fund outside foundations that, in turn, direct money towards patients for medications. These foundations are bound by rules that dictate the terms of this assistance; the foundations, for example, cannot restrict coverage to only one drug.

Patient-assistance programs have come under fire in recent months. During a House hearing, Rep. Eleanor Holmes Norton (D-DC) charged Turing Pharmaceuticals with using patient-assistance programs as a means of diverting attention from the high price of the company's toxoplasmosis treatment, Daraprim. Some critics contend that drugmakers create the need for patient-assistance programs by pricing their drugs too high.

Pharma Guy's insight:

Does this have anything to do with disappointing Tecfidera sales and Biogen's heightened direct-to-consumer promotion campaign? For more on that, read "Social Media Failed to Do the Job, So Biogen Turned to DTC to Promote Tecfidera"; 

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Turing's Patient Assistance Program Better Than Pfizer's, Although...

Turing's Patient Assistance Program Better Than Pfizer's, Although... | Pharmaguy's Insights Into Drug Industry News |

The company says that Daraprim will will be available to hospitals at a discounted rate, and insists that keeping the list price at $750 will not affect patient’s out of pocket costs — the patient will be charged around $10 per pill and the insurance company will cover the rest of the cost.

They also say that they will offer the pill free of charge to “uninsured, qualified patients with demonstrated income at or below 500 percent of the federal poverty level through our Patient Assistance Program.”

Pharma Guy's insight:

Pfizer recently doubled its income eligibility for its PAP program to FOUR times the Federal Poverty Level. For more on that: 

How many insurance plans refuse to pay for Daraprim? How many have a much higher co-pay than $10? And how many patients qualify for the PAP program?

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