Co-Pay Assistance Programs Fail to Help Uninsured Patients

By Pat Anson, PNN Editor

Co-pay assistance programs – also known as co-pay charities – are ostensibly designed to help needy patients pay for prescription drugs. But a new study by researchers at the Johns Hopkins Bloomberg School of Public Health found that nearly all co-pay programs fail to cover uninsured patients who need financial help the most.

The researchers also found that co-pay programs were more likely to cover high-cost, brand-name prescription drugs, despite the availability of lower-priced generic medications. The findings are published online in JAMA.

“Independent patient assistance programs favor higher-priced drugs, and the higher the drug price, the higher the likelihood of it being covered,” says co-author Gerard Anderson, PhD, professor in the Bloomberg School’s Department of Health Policy and Management. “Unfortunately patients with the greatest financial needs -- people without health insurance -- do not qualify for these programs.”

Anderson and his colleagues looked at the six largest charity organizations, which ran 274 different patient assistance programs in 2018.

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Most of the programs only covered drugs for cancer-related conditions or genetic and rare diseases. None offered free drugs and typically they only covered the most expensive medications.

“Only covering insured patients may help these programs cover more patients with their limited funds,” said lead author So-Yeon Kang, MPH, a research assistant in the Bloomberg School’s Department of Health Policy and Management. “But leaving out the uninsured diminishes the charitable aspects of these organizations supported by tax-exempted donations.”

Misconduct Widespread

Patient assistance programs run by independent charities are usually funded by pharmaceutical companies. Federal investigations into several co-pay assistance programs led to multimillion-dollar settlements with drug companies for allegedly steering patients to their higher-priced drugs.

Over the past year, Pfizer, Amgen, Jazz Pharmaceuticals, Astellas Pharma, Lundbeck and Alexion have all paid heavy fines to settle allegations that they used co-pay programs to defraud Medicare. Federal anti-kickback laws prohibit pharmaceutical companies from making any kind of payment to induce Medicare patients to purchase their drugs. The prohibition includes co-pays.

“We are committed to ensuring that pharmaceutical companies do not use third-party foundations to pay kickbacks masking the high prices those companies charge for their drugs,”  U.S. Attorney Andrew Lelling said in a statement. “This misconduct is widespread, and enforcement will continue until pharmaceutical companies stop circumventing the anti-kickback laws to artificially bolster high drug prices, all at the expense of American taxpayers.”

Similar allegations were made against Insys Therapeutics and the “Gain Against Pain” co-pay program run by the U.S. Pain Foundation. Insys donated over $3.1 million to U.S. Pain, with most of the money going to its co-pay program to help patients pay for Subsys, an expensive fentanyl spray made by Insys. A four-day supply of Subsys can cost nearly $24,000.

The founder of Insys and four former executives were recently found guilty of racketeering charges unrelated to the co-pay program. The company also agreed to pay $225 million in fines and penalties to settle criminal and civil investigations. U.S. Pain ended the “Gain Against Pain” program in 2018 and said it would no longer accept funding from Insys.

In an editorial, Katherine Kraschel, a lecturer at Yale Law School, and Gregory Curfman, MD, deputy editor of JAMA, called for more oversight of co-pay programs to make sure they help patients who truly need it.

“Although patient assistance programs may provide important financial relief for patients, the current patient assistance program structure largely neglects uninsured individuals,” they wrote.  “Absent other regulatory interventions, the Department of Justice needs to continue to scrutinize patient assistance program practices, and the Internal Revenue Service and state attorneys general should examine the tax-exempt status of patient assistance programs.”

CreakyJoints Under Scrutiny for Ties to Drug Makers 

By Pat Anson, PNN Editor

Patient advocacy groups are coming under scrutiny again for their financial ties to drug companies. The latest is the Global Healthy Living Foundation (GHLF), a non-profit charity that created CreakyJoints, a website and social media platform that raises awareness about arthritis and other chronic illnesses. 

According to Bloomberg News reporter Ben Elgin, the foundation and CreakyJoints have long had a cozy relationship with Pfizer, Amgen, Johnson & Johnson and other corporate donors. Pfizer has donated nearly $1 million to the foundation over the past decade and one of its vice-presidents even serves on GHLF’s board of directors.

In a speech to drug makers in 2010, GHLF president Seth Ginsberg reportedly sought their donations -- while at the same time promising the companies “higher profits” and “sales rep participation in our programs.”

Ginsberg, who was diagnosed with spondyloarthritis as a teenager, co-founded GHLF in 1999 with marketing executive Louis Tharp.

In addition to CreakyJoints, GHLF has two other “grassroots” programs, Fail First Hurts and the 50-State Network, which advocate for healthcare policies that often align with the interests of its donors.  

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According to GHLF’s 2017 tax return, the foundation had over $5 million in annual revenue. Ginsberg was paid a salary of $384,000, while Tharp received $220,000 as Executive Director.  Nearly $300,000 was also paid to a for-profit marketing company established by the two men, although it’s unclear what the payment was for.

Bloomberg reported that GHLF’s tax returns “reflect errors and unexplained entries that have obscured the amounts of money flowing to its cofounders.”

“Are they operating in a way that is extremely transparent? It’s safe to say they’re not,” Brian Mittendorf, a professor of accounting at Ohio State University told Bloomberg. “From looking at their disclosures, you have no idea how closely they’re related to some of the entities it pays.”

At least one GHLF board member and several patient volunteers reportedly left the organization because they were troubled by its relationships with donors.

GHLF did not grant an interview to Bloomberg, but replied to questions in writing.

“The only time we engage in advocacy is when it helps patients. If it doesn’t help patients, we don’t do it,” the foundation said in a statement. “Our mission is to engage in patient-centered research, provide advocacy for access-to-care, and to support people living with chronic disease by providing a supportive environment and accessible education.”

In a related story, Bloomberg reported that several other recently formed non-profits – such as the U.S. Rural Health Network --  appear to be little more than front organizations for the pharmaceutical industry.

“There are a number of groups created by pharma companies that look and act like patient organizations, but they’re 100 percent funded by industry,” said Marc Boutin, chief executive officer of the National Health Council. “They sound and look like patient organizations, but they take positions that industry wants.”

Drug Companies Fined for Co-Pay Programs

Last week two drug companies agreed to pay $125 million in fines to settle allegations that they used charitable foundations as front organizations to bilk Medicare.

Amgen and Japanese drug maker Astellas Pharma paid the foundations to establish co-pay prescription drug programs for Medicare patients. Federal prosecutors say the programs were primarily designed not to help patients, but to illegally pay their co-pays for Astellas and Amgen products.

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Federal anti-kickback laws prohibit pharmaceutical companies from making any kind of payment to induce Medicare patients to purchase their drugs. The prohibition includes co-pays.

“The companies’ payments to the foundations were not ‘donations,’ but rather were kickbacks that undermined the structure of the Medicare program and illegally subsidized the high costs of the companies’ drugs at the expense of American taxpayers,” U.S. Attorney Andrew Lelling said in a statement.

“When pharmaceutical companies use foundations to create funds that are used improperly to subsidize the co-pays of only their own drugs, it violates the law and undercuts a key safeguard against rising drug costs,” said U.S. Assistant Attorney General Jody Hunt.

Last year, Pfizer paid nearly $24 million to settle allegations that it also used a co-pay program to pay Medicare for the company’s prescription drugs.

U.S. Pain Foundation Co-Pay

The U.S. Pain Foundation is under investigation by the U.S. Senate Finance Committee for a similar co-pay program established with Insys Therapeutics, a controversial Arizona drug company. Insys makes Subsys, an expensive and potent fentanyl spray blamed for hundreds of overdose deaths.

U.S. Pain received $2.5 million from Insys to launch the “Gain Against Pain” program, which ostensibly helped Medicare patients pay for drugs prescribed for breakthrough cancer pain. Critics say the program was primarily used to increase prescriptions for Subsys, which can cost $24,000 for just a four-day supply.

Former U.S. Pain CEO Paul Gileno initially defended the co-pay program, saying the money from Insys “does not influence our values,” but later resigned over allegations that he misappropriated $2 million from his own charity.

The Gain Against Pain program was subsequently shutdown in August 2018 and U.S. Pain said it would no longer accept funding from Insys.

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Sen. Ron Wyden (D-OR), the ranking member of the Senate Finance Committee, sent a lengthy letter last December to U.S. Pain interim CEO Nicole Hemmenway asking a series of questions about the Insys co-pay program. According to the senator’s office, Wyden has still not gotten a full response.  

“The U.S. Pain Foundation has yet to provide a substantial amount of the information that Senator Wyden requested in his letter. Staff is in communication with the organization in order to get to the bottom of the organization’s financial relationship with pharmaceutical manufacturers, including Insys, and its compliance with applicable federal laws,” a Wyden spokesperson said in a statement to PNN.

A federal jury in Boston is currently in its third week of deliberations in a criminal case against Insys founder John Kapoor and four former executives of the company, who are accused of bribing doctors to boost sales of Subsys. 

U.S. Pain also remains under investigation by the Connecticut Attorney General’s office for financial irregularities that led to Gileno’s resignation.