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Patient Advocacy Groups – Pharma in Disguise?

By Phebe Hong

The mission of the Patient Access Network Foundation (PANF) is “[t]o help underinsured people with life-threatening, chronic and rare diseases get the medications and treatments they need by assisting with their out-of-pocket costs and advocating for improved access and affordability.” PANF proudly boasts that since 2004, it has “provided nearly 1 million underinsured patients with over $3 billion in financial assistance, through close to 70 disease-specific programs.”

Despite its altruistic mission statement, PANF recently found itself in hot water. On October 24th, PANF agreed to a $4 million settlement with the Department of Justice over allegations that the group paid kickbacks to Medicare patients purchasing specific medications. In parallel, another patient group called Good Days settled for $2 million with the DOJ over similar allegations.

PANF and Good Days are both patient advocacy groups (PAGs). PAGs provide education, advocacy, and support services for patients and caregivers. They range from large formal organizations (e.g., American Heart Association) to grassroot advocacy groups (e.g., Sickle Cell Disease Foundation). PAGs are a crucial player in the health care system, often acting as liaisons between patients and more powerful industry entities, such as regulatory agencies, research organizations, and pharma companies.

In recent years, many PAGs have come under scrutiny for passing through kickback payments, essentially funneling money from pharma to patients. The investigation harks back to 2014, when the Office of Inspector General of the Department of Health and Human Services released a special advisory bulletin airing concerns about PAG interactions with donors that could violate the Anti-Kickback Statute, which prohibits pharma companies from subsidizing co-pays for Medicare patients. In the following years, the DOJ launched an industry crackdown on such behavior, resulting in more than $840 million in settlements with pharma companies, including Pfizer, Amgen, and Astellas.

The rationale behind the Anti-Kickback Statute and DOJ’s crackdown arises from a concern over high drug costs. If co-pay assistance is made available only for higher-cost brand drugs, patients are incentivized to avoid purchasing lower-cost alternatives. As a result, the higher cost is a burden on Medicare and therefore taxpayers, who must foot the bill.

The recent settlements with PANF and Good Days are the first of its kind directly involving PAGs. In general, pharma companies are allowed to donate to PAGs, as long as the money is put into broad disease funds intended for general co-pay assistance (i.e., not tied to a specific drug). However, DOJ’s allegations clearly accuse PANF and Good Days of accepting pharma money to cover co-pays for specific drugs. For example, in one instance, the DOJ alleges:

[Good Day’s] fund, which was funded solely by Novartis, covered copays only for [Novartis’ drug] Afinitor; it did not cover copays for the other drug approved to treat PNET.

The recent settlements raise a broader question: what should the relationship between pharma and PAGs look like? Some PAGs directly invest in drugmakers (for example, the Cystic Fibrosis Foundation invested in the company that ultimately became Vertex Pharmaceuticals). Other PAGs rely on pharma money to fund their advocacy work (for example, the Patient Advocacy Council for the American Liver Foundation is sponsored by Gilead). Careful regulations and ethical frameworks should be developed and enforced in order to ensure that PAGs continue their important advocacy work, without undue influence from pharma that could actually end up harming patients and the programs that support them.

Phebe Hong

Phebe Hong

Phebe Hong is a 2L at Harvard Law School. She graduated from Harvard College with a degree in Human Developmental and Regenerative Biology. Prior to law school, she worked as a consultant advising pharmaceutical and biotechnology companies. She is a Research Assistant at the Program on Regulation, Therapeutics, and Law (PORTAL) and an Articles Editor for the Journal of Law and Technology. Her research interests include FDA regulation of biologics and pharmaceutical patent law.

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