Charity Delays Giving New Aid After U.S. Faults Pharma Ties

(Bloomberg) -- A medical charity that lost a crucial stamp of approval from the U.S. government because it had worked too closely with its drug-company donors said it will decide in January whether it can continue to help patients pay for their prescriptions.

In a statement on its website, the Caring Voice Coalition, one of the biggest patient-assistance charities in the U.S., said it is delaying offering patients financial help for 2018 until it decides what to do. It expects to announce a decision “at some point in January.”

“We are very concerned that we may not be able to remain as a long-term viable resource for individuals with chronic illness,” Gregory Smiley, chief executive officer of Caring Voice, said in the statement. “The CVC Board of Directors is continuing to evaluate all options available to our organization."

Bloomberg News reported last month that the Office of Inspector General of the Department of Health and Human Services rescinded its favorable advisory opinion of the Caring Voice Coalition, in part because the charity had provided drugmakers with data that could help them see if their contributions were helping their own customers. That could potentially give drug companies greater power to raise prices, the HHS said. It was the first time the HHS has rescinded a favorable advisory opinion for a patient-assistance charity.

The Mechanicsville, Virginia-based nonprofit helps patients afford expensive drugs by funding health insurance co-payments that can otherwise total more than $10,000 a year. Without the charity, which is funded almost entirely by drugmakers, many patients might not be able to afford lifesaving medicine.

Pharmaceutical companies increased their donations to such copay charities in recent years, often in tandem with large increases in drug prices. Under federal law, drug companies can’t give direct copay help to patients covered by Medicare, because it would be considered an illegal kickback that could steer patients to one drug or another. Instead, they’re permitted to donate to independent charities that help Medicare patients, provided the companies don’t have any sway over how the nonprofits operate.

The inspector general’s advisory opinions essentially give a stamp of approval to the charities. While such approvals aren’t required, drugmakers are unlikely to continue donating to a charity that doesn’t have one.

The findings of the inspector general are similar to reporting by Bloomberg Businessweek from May 2016 that Caring Voice gave preferential treatment to patients of some company donors.

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