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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Gilead et al Investigated by Feds for Contributions to Co-Pay Charities

Gilead et al Investigated by Feds for Contributions to Co-Pay Charities | Pharmaguy's Insights Into Drug Industry News |

Federal investigators have launched a number of investigations into how drugmakers might be setting or maintaining high prices on some of their drugs, looking into pricing on generics and relationships with so-called specialty pharmacies. Now three drugmakers have been subpoenaed for information on their relationships with drug charities.

Gilead Sciences ($GILD), Biogen ($BIIB) and Jazz Pharmaceuticals ($JAZZ) have disclosed in filings that they have been hit up by the feds for documents related to their support of nonprofits that assist patients, reports Bloomberg, which has taken a deep look into such relationships.

As the news service points out, drug companies are not allowed to give direct copay help to patients who get treatments paid for by Medicare. That would be deemed a kickback. But they can make contributions to charities that assist Medicare patients to pay for drugs. That is, so long as those donations don’t have any strings attached and charities are not favoring one company’s drugs over another.

Bloomberg reports that drugmakers donated $1.1 billion to charities in 2014, more than double the amount from just four years before. The charities are important because if their support means patients sometimes continue to take expensive drugs instead of less expensive alternatives, meaning drugmakers benefit.

The charities Bloomberg spoke to claim independence. They point out they have no sway over drug prices and that their donors have no say in their operations. But the news service also spoke to a handful of former employees from one charity that claimed patients taking Jazz’s $90,000 a year narcolepsy drug Xyrem got quick help while those taking a competing drug might get waitlisted, a charge the charity denied.

These kinds of relationships came up three years ago when The New York Times reported that the Chronic Disease Fund, the largest copay assistance charity at the time, had put new administrators in place after questions were raised about favoritism towards patients taking Questcor Pharmaceuticals’ H.P. Acthar Gel, a drug that had come under criticism for its $28,000-per-vial price.

Pharma Guy's insight:

Also read “The Real Reason Big Pharma Wants to Help Pay for Your Prescription”;

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The Real Reason Big Pharma Wants to Help Pay for Your Prescription

The Real Reason Big Pharma Wants to Help Pay for Your Prescription | Pharmaguy's Insights Into Drug Industry News |
Fueled almost entirely by drugmakers’ contributions, the seven biggest copay charities, which cover scores of diseases, had combined contributions of $1.1 billion in 2014. That’s more than twice the figure in 2010, mirroring the surge in drug prices. For that $1 billion in aid, drug companies “get many billions back” from insurers, says Fugh-Berman.
“Drug companies aren’t contributing hundreds of millions of dollars for altruistic reasons,” says Joel Hay, a professor and founding chair in the department of pharmaceutical economics and policy at the University of Southern California. The charities “don’t ever have to scrounge for money. It falls right to them.” Both Hay and Fugh-Berman have served as paid expert witnesses in lawsuits against drug companies.
When Turing bought Daraprim and sought to boost its annual revenue from $5 million to more than $200 million, the use of patient-aid funds was considered essential, internal company documents show. Last May, as the company did its due diligence before the purchase, one executive warned in an e-mail that new, high copays would force toxoplasmosis patients to seek alternative drugs.
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