Almost all of the patient assistance programs funded by independent charities for subsidizing prescription medications exclude patients without insurance, a cross-sectional analysis has shown.
Of 274 patient assistance programs analyzed from six independent charities, 267 (97%) listed insurance coverage as an eligibility requirement for their program, according to So-Yeon Kang, MPH, MBA, a PhD student at Johns Hopkins University, Baltimore, and colleagues.
Out-of-pocket prescription costs for Medicare Part D plans can cost “thousands of dollars” because of higher coinsurance rates and no catastrophic cap on the program, the researchers.
“For this reason, independent charity foundations offering patient assistance programs to these patients are entitled to receive tax-deductible donations from pharmaceutical companies,” they wrote. “However, the findings from this study suggest that several features of the programs may limit their usefulness to financially needy patients and bolster the use of expensive drugs.”
The researchers examined the 274 patient assistance programs funded by the CancerCare Co-Payment Assistance Foundation, Good Days, the HealthWell Foundation, the Patient Access Network Foundation, Patient Advocate Foundation Co-Pay Relief, and Patient Services Incorporated. Copayment assistance alone was provided by 168 programs, 90 programs offered assistance with copayments and health insurance premiums, and 9 programs provided assistance to subsidize health insurance premiums only.
Cancer or cancer-related treatments were covered by 41% of programs, and 34% provided assistance for genetic or rare diseases.
In 2017, the six charities spent an average of 86% of their revenue on patient expenditures: They had a total revenue of between $24 million and $532 million, while the expenditures for patient assistance ranged from $24 million and $353 million. With regard to eligibility, the income limit that was most common was 500% of the federal poverty level.
The researchers also studied which of 18 drugs were covered by assistance programs. They found thatOf the 18 drugs studied, 12 drugs (67%) were in protected classes and therefore covered by Medicare Part D. Prescription drugs that were covered were more likely to be expensive, compared with drugs that were not covered (median annual cost of $1,157, versus $367).
The researchers noted several limitations of the study, such the inability to correlate the programs with drug spending, assuming that generic substitution was always possible. In addition, the analysis of drug use was limited to two charity foundations.
“Coupled with recent enforcement activity by the Department of Justice, the data reported by Kang et al. suggest that some programs may warrant continued regulatory scrutiny and enforcement,” wrote Ms. Kraschel, executive director of the Solomon Center for Health Law & Policy at Yale University Law School, New Haven, Conn., and Dr. Curfman, deputy editor of JAMA in Chicago (JAMA. 2019;322:405-6).
In addition, the Office of Inspector General created a special advisory bulletin in 2014 that clarifies how pharmaceutical companies should comply with the Anti-Kickback Statute within a patient assistance program. This guidance states that pharmaceutical companies should make assistance available to all products, rather than simply high-cost or specialty drugs, which pharmaceutical companies have not consistently followed, Ms. Kraschel and Dr. Curfman explained.
To help patients and the health care system, the authors recommended the Office of the Inspector General implement stronger restrictions for pharmaceutical companies contributing to patient assistance programs and develop reporting requirements for transparency purposes.
“The extent to which patient assistance programs violate tax exemption standards that prohibit private benefit that does not further its charitable purpose and is intentionally aimed to benefit the pharmaceutical companies warrants further scrutiny,” Ms. Kraschel and Dr. Curfman wrote. “It is particularly egregious that the payments made from pharmaceutical companies to patient assistance programs may be illegal yet simultaneously tax deductible.”
The study was funded by Arnold Ventures. The authors of the study and the editorial reported no relevant conflicts of interest.
SOURCE: Kang S-Y et al. JAMA. 2019;322(5):422-9.