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US charity pays $4m to settle allegations it paid patients kickbacks from drug makers

BMJ 2019; 367 doi: (Published 22 November 2019) Cite this as: BMJ 2019;367:l6662
  1. Owen Dyer
  1. Montreal

The Assistance Fund (TAF), a charity based in Orlando, Florida, will pay $4m (£3.1m; $3.6m) to settle claims that it served as a conduit for kickbacks from the drug manufacturers Teva, Biogen, and Novartis that aimed to encourage Medicare patients with multiple sclerosis to use their expensive products.

Medicare, the public insurance scheme for people aged 65 or over, covers most of a drug’s price, but patients must cover a small portion through a copayment. This is intended to introduce market forces by making more expensive drugs a costlier choice for patients as well as taxpayers.

The Anti-Kickback Statute, a federal law, bans drug manufacturers from covering copayments on patients’ behalf, as this could increase Medicare patients’ use of very expensive drugs, ultimately increasing the manufacturer’s profit.

Charities are legally allowed to help patients with copayments, and drug companies are allowed to donate to those charities, as long as there is no coordination and no special focus on copayments involving the donor’s products.

But the US Department of Justice has alleged that the Assistance Fund brought just such coordination and focus to its relationships with Teva, Biogen, and Novartis. Although the charity was constantly receiving requests from patients for help with copayments, its multiple sclerosis fund often ran out of money and was frequently closed, the government said. Instead of putting applicants on a waiting list, the charity would simply not process requests that came in when the fund was closed, then operate on a first come, first served basis when it opened.

The fund would open after major donations from the manufacturers. But immediately after such openings, the government said, vendor companies working on the manufacturers’ behalf would submit “batch files” containing large numbers of requests from patients taking those manufacturers’ drugs.

In this way, the great majority of copayments approved for help involved patients taking the sponsors’ products, even though these represent a small fraction of patients with multiple sclerosis, the government said.

The charity’s accounting also showed collusion, federal attorneys alleged. It would submit a figure to Teva outlining its needs for the coming year that was calculated by counting the number of patients who had received copayment help for Teva’s Copaxone (glatiramer acetate).

When Biogen failed to renew the charity’s funding in 2014, the Assistance Fund stopped supporting many of the patients taking the company’s Tysabri (natalizumab), the government alleged.

“TAF cared more about helping its big pharma donors make money than about helping individual patients in need of life changing assistance,” said FBI special agent Joseph Bonavolonta, announcing the settlement.

The Assistance Fund did not admit wrongdoing. In a statement it said that the “conduct underlying the settlement occurred when the MS Copay Program was under the direction or control of TAF’s former management.”

The charity, which operates 60 disease programmes and says that it has helped more than 78 000 patients, will keep operating and has signed a three year integrity agreement.

The Assistance Fund is the third patient charity to settle federal kickback allegations. The Chronic Disease Foundation and the Patient Access Network Foundation paid $2m and $4m, respectively, last month. The government alleged that they conspired with companies including Novartis, Bayer, Astellas, Dendreon, Amgen, and Questcor, now owned by Mallinckrodt.

While the government has recovered $10m so far from charities, it has taken more than $840m from eight companies accused of funding kickback schemes: United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas, and Amgen.

“Pharmaceutical companies and foundations cannot undermine the Medicare program through the use of kickbacks disguised as routine charitable donations,” said US attorney Andrew Lelling. “We will continue to pursue this kind of enforcement until the practice disappears.”

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