December 6, 2018; Reuters
Want to know more about how the charity sector is complicit in soaring drug prices?
Yesterday, the Justice Department announced the largest settlement to date in a kickback scheme between a pharmaceutical company and a so-called patient charity operation, the Caring Voice Coalition (CVC). NPQ covered that organization’s own problems with the federal government last year when its license to provide patient aid was revoked due to the closeness and influence drug companies had over the operation. In this case, Actelion Pharmaceuticals, which is now under the umbrella of Johnson & Johnson, will pay the US government $360 million to settle its case in which it was accused of improperly paying the co-pay obligations of thousands of Medicare patients using its own hypertension drugs—Tracleer, Ventavis, Veletri, and Opsumit. This self-serving behavior, aimed apparently at driving up drug prices while creating a strong market, is deemed a misuse of charity and is prohibited. The Justice Department has been energetic in filing legal suits against the pharmaceutical companies engaged in such behavior.
CVC stopped providing aid after the government revoked its approval to do so in 2017 because of concerns drug-makers had improper influence over it. This is the second time it has figured in one of these cases; the previous case, resolved for $210 million in 2017, was against United Therapeutics Corp. for improperly using the charity to cover co-payments. In May, Pfizer settled a similar suit involving a different charity for nearly $23.85 million. Likewise, Jazz Pharmaceuticals and Lundbeck settled similar cases for $57 million and $52.6 million, respectively.
In what has become a standard pattern, Actelion was accused of obtaining data from CVC that detailed the degree to which patients used its drugs, then using the information to budget for future payments. This encouraged the charity to boost the drugs provided by the donor company. It’s a neat little business plan…if you don’t get caught.—Ruth McCambridge