Sep 7, 2022 - Health

Drugmakers profit through donations to patient charities, study finds

Illustration of hands in a suit chiseling a dollar sign into a pill
Illustration: Sarah Grillo/Axios

Drug manufacturers may have profited from donating to charities that help patients pay for costly medicines, a new Health Affairs study found.

Why it matters: The federal anti-kickback statute is supposed to prevent manufacturers from realizing financial gains when they help subsidize patients' drug copays.

Driving the news: Researchers analyzed the drug spending of more than 3 million Medicare Advantage enrollees in 2010 and 2017, along with data on conditions and drugs covered by patient assistance charities.

  • While drug companies can't make illegal inducements, they can send money to patient assistance charities and ask that the funds to be used to treat certain conditions, including ones only they and select other companies may have a treatment for.

What they found: The percentage of Medicare Advantage drug spending estimated to qualify for charity assistance, increased from 29% to 41% between 2010 and 2017.

  • On average, half of the drug spending within each medical condition could be linked to a single manufacturer.
  • For example, the researchers found that 99.6% of drug spending in 2017 to treat short-bowel syndrome was directed at Takeda's drug Gattex, which when initially launched in 2013 was priced at $300,000 per year. Soon after the FDA approved Gattex, a fund was set up specifically to help patients with the condition. Now, GoodRx estimates the drug costs almost $43,000 per month.
  • "Manufacturers could effectively assist in the purchase of their own medications by contributing to condition-specific charities," the study authors wrote.

Flashback: The Department of Justice has sued drugmakers and charities over payments, forcing them to pay millions to settle the charges.

  • One of the largest drug charities, the Caring Voices Coalition, had to shut down in 2018 after the government revoked its approval to provide financial aid over concerns about ties with pharmaceutical companies.
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