(Bloomberg) -- Drugmakers can provide free medication to patients who can’t afford their prescriptions after a major industry-funded charity said it wouldn’t offer patients assistance in 2018, the federal government said.
The charity, Caring Voice Coalition, had received hundreds of millions of dollars from drug companies, but said last week it won’t offer patients financial assistance in 2018 after losing a crucial stamp of approval from the U.S. government.
Caring Voice, one of the biggest patient-assistance charities in the U.S., helps people afford costly drugs by funding insurance co-pays. But in late November, the Office of Inspector General of the Department of Health and Human Services rescinded its favorable advisory opinion, in part because the charity had provided drugmakers with data that could help them see if their contributions were helping their own customers.
“After considering all options and our current circumstances, I deeply regret to announce that CVC will not open financial assistance for any disease fund in 2018,” Gregory Smiley, the charity’s chief executive officer, said in a statement on its website. He urged patients “to seek out alternate resources” and said, without providing details, that Caring Voice was “developing new ways to continue our charitable mission.”
Smiley did not immediately respond to an email seeking additional comment. In a statement last month, Caring Voice said “we continue to concentrate on ensuring that each of our practices at CVC follow both the letter and spirit of all applicable laws and regulations.”
In a letter posted on its website, the HHS Office of Inspector General said that drug companies that provided free drugs to patients who had been receiving assistance from Caring Voice last year would not be subject to administrative sanctions as long as they distributed them in a safe and consistent manner.
“Based on contacts from patients and other interested persons, OIG understands that the absence of CVC support may affect patients’ access to critical drugs,” the OIG’s chief counsel said in the Jan. 4th letter to the Pharmaceutical Research and Manufacturers of America, a drug industry trade group. One solution is for a drug company “to provide such drugs without charge to the patient or any federal health care program.”
Question of Kickbacks
Pharmaceutical companies increased their donations to copay charities in recent years, often in tandem with large increases in drug prices.
Under federal law, companies can’t provide direct copay help to patients covered by the Medicare drug program for the elderly. Such aid would be considered an illegal kickback that could steer patients to one medicine or another. Instead, they’re allowed to donate to independent charities that assist Medicare patients, provided the companies don’t exert sway over how the nonprofits operate.
On Dec. 20th, the Department of Justice announced a $210 million settlement with United Therapeutics Corp., a maker of pulmonary hypertension drugs, for using Caring Voice to funnel money to its own patients. The company tracked donations to ensure that sales from Medicare patients being helped “far exceeded” its donations, the government alleged. The company also entered into a corporate-integrity agreement with the HHS Office of Inspector General.
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