February 10, 2017; Law360
Last summer, NPQ reported on a Department of Justice investigation into the uses of corporate philanthropy in supporting out-of-reach drug costs. We wrote then that patient-assistance charities funded primarily by Big Pharma are structured as independent funds to provide co-pay assistance to people with specific diseases. They have been accused of serving as public relations “foils” to help attract patients to high-priced drugs. The drug companies must take care, however, in that they are prohibited from trying to steer charitable contributions toward paying the cost of a particular drug that they might produce.
The DOJ’s investigation continues, at least for now. The pharmaceutical company Regeneron has revealed it has been subpoenaed by the U.S. Attorney’s Office for the District of Massachusetts regarding its involvement with nonprofit patient assistance programs. The information was part of a filing to the U.S. Securities and Exchange Commission (SEC).
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Similarly, Biogen has also revealed in an SEC filing that in December, it was served “a civil investigative demand from the federal government for documents and information relating to our relationships with entities providing clinical education and reimbursement support services.” It has received other such requests, as has Valeant Pharmaceuticals International, which reports that two sets of federal prosecutors (from Massachusetts and the Southern District of New York) have subpoenaed documents relating to its patient assistance program.
Federal prosecutors in Boston have subpoenaed DaVita and Fresenius Medical Care in relation to dialysis treatments. The Kidney Fund also confirmed in early January that it had received an administrative subpoena from the DOJ requesting information about its charitable assistance program, known as the Health Insurance Premium Program.
In our opinion, this cynical use of charity has received far too little attention from nonprofit watchdogs and charity regulators. Forcing people to depend upon the “charitable” contributions of the very same companies charging exorbitant prices for necessary medicine is an ugly practice that does not belong in this sector. Those charitable contributions, by the way, are included in annual giving reports.—Ruth McCambridge