Readers may recall our alert from November 2017, “Patient Assistance Charity Loses Protection from Kickback Liability – Office of Inspector General Revokes Advisory Opinion” in which we relayed the story of Caring Voice Coalition (CVC), a patient assistance program formed to help patients afford expensive prescription drugs by funding health insurance copayments. CVC, like many other patient assistance programs, is funded almost entirely by donations from drug makers. Given the primary source of their funding, the programs rely on government protection from Kickback liability, which is generally granted so long as the programs demonstrate that a bona fide charitable organization is interposed between the drug manufacturers and the recipients of aid.
Recent investigations in Massachusetts however, have revealed that a number of drug makers and patient assistance programs, much like CVC, are skirting the rules and, in the words of Massachusetts’ new U.S. Attorney Andrew Lelling, “distort[ing] the pay structure for Medicaid” by illegally giving money to patient assistance programs with the expectation that it would later be paid back through various shady mechanisms. The U.S. Attorneys office in Massachusetts, in investigations all launched prior to Lelling’s appointment, has ongoing probes involving Pfizer, Inc. and Johnson & Johnson. United Therapeutics Corp. recently settled similar allegations for $210 million, while Aegerion Pharmaceuticals is currently engaged in settlement discussions.
Lelling has publicly stated that he plans to continue to keep the pressure on both drug makers and patient assistance charities that are involved in “crooked” donations.
“It’s unfortunate that the drug companies have put us in this position, but it is something that we’re going to fix, and we try to fix it keeping in mind that there are people who need these drugs…who need to be able to afford these drugs,” said Lelling.
The FisherBroyles Pharmacy and Health Care Law team is pleased to keep you updated on events of interest to those in the healthcare and pharmaceutical industries. Questions regarding the subject matter of this alert may be directed to any of the following attorneys: