Copay “charities” more charitable for pharma

April 25th, 2018

As drug prices increase, patients are spending a substantial amount on prescription drugs out-of-pocket, and will likely be spending more in the next decade. So programs that help patients pay their drug copays are a good thing – right? Not necessarily, because many of them are secretly funded by drug companies.

In a recent essay in The Hastings Center Bioethics Forum, Breon Wise and other researchers from Georgetown University Medical Center, the DC Center for Rational Prescribing, and PharmedOut describe how pharma companies take advantage of the “copay charity” loophole to increase their profits and waste taxpayer money. 

Pharmaceutical companies commonly offer copay vouchers or coupons to help patients cover the costs of expensive drugs. However, this encourages patients to buy brand-name drugs rather than generic drugs, raising drug costs for insurers and keeping prices high. As Wise et al write, “A pharmaceutical company that pays a patient’s $50 copay with one hand while billing an insurer $1,000 for the same drug with the other hand is making an excellent investment.”

Medicare does not allow use of copay vouchers or coupons, but pharma has found a way around that restriction – by funneling money through patient advocacy groups into copay assistance programs, also known as “copay charities.” 

The authors focus on a specific copay charity called “Gain Against Pain,” which is run by the U.S Pain Foundation and is meant to help cancer patients dealing with pain. From 2012 to 2017, drug company Insys gave USPF $2.5 million specifically for this program. USPF insists that their copay assistance is not limited to any specific brand of pain medication, yet Insys is the program’s sole sponsor and their drug Subsys is the leading immediate-release fentanyl medication. These charities aren’t supposed to favor drugs from sponsoring companies but they do it anyway, sometimes even putting patients on a waitlist unless they choose the sponsored drug. 

“Copay charities allow companies to appear altruistic while raking in millions,” write Wise et al. By pushing patients toward brand-name Subsys instead of a generic version, Insys is getting nearly $100 million from Medicare each year (which drives up health care costs for all taxpayers). Meanwhile, patients are caught in the middle, many of whom depend on these assistance programs to live but want a more sustainable solution.

“There’s one part of you that’s grateful and so happy,” said Loukisha McCoy, who has a rare genetic disease and gets assistance from a pharma-funded charity. “But on the other side of it, we do feel uncomfortable having the drug company to have that power.”

Copay charities are a win-win for patient advocacy groups, who get funding from pharma but are still exempt from certain federal taxes by virtue of their nonprofit status. So far, many of these charity programs have been funded behind the scenes, as patient groups are not required to report funding from industry. Given the extent of industry funding of patient groups, and the impact of this funding on health care policy, it’s time to require disclosure from patient groups on where their “charity” funds are coming from. 

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