Feds ask Gilead, Biogen, Jazz for info on ties to charities

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Federal investigators have launched a number of investigations into how drugmakers might be setting or maintaining high prices on some of their drugs, looking into pricing on generics and relationships with so-called specialty pharmacies. Now three drugmakers have been subpoenaed for information on their relationships with drug charities.

Gilead Sciences ($GILD), Biogen ($BIIB) and Jazz Pharmaceuticals ($JAZZ) have disclosed in filings that they have been hit up by the feds for documents related to their support of nonprofits that assist patients, reports Bloomberg, which has taken a deep look into such relationships.

As the news service points out, drug companies are not allowed to give direct copay help to patients who get treatments paid for by Medicare. That would be deemed a kickback. But they can make contributions to charities that assist Medicare patients to pay for drugs. That is, so long as those donations don’t have any strings attached and charities are not favoring one company’s drugs over another.

Bloomberg reports that drugmakers donated $1.1 billion to charities in 2014, more than double the amount from just four years before. The charities are important because if their support means patients sometimes continue to take expensive drugs instead of less expensive alternatives, meaning drugmakers benefit.

The charities Bloomberg spoke to claim independence. They point out they have no sway over drug prices and that their donors have no say in their operations. But the news service also spoke to a handful of former employees from one charity that claimed patients taking Jazz’s $90,000 a year narcolepsy drug Xyrem got quick help while those taking a competing drug might get waitlisted, a charge the charity denied.

These kinds of relationships came up three years ago when The New York Times reported that the Chronic Disease Fund, the largest copay assistance charity at the time, had put new administrators in place after questions were raised about favoritism towards patients taking Questcor Pharmaceuticals’ H.P. Acthar Gel, a drug that had come under criticism for its $28,000-per-vial price.

According to Bloomberg, Gilead was not only asked for documents tied to relationships with drug charities but also about its own patient-assistance programs for its highly successful hepatitis C drugs. The Foster City, CA, company last year actually dropped some patients from its program. It was unhappy that some insurers continued to refuse to cover or put limits on the coverage of the drugs even after being offered discounts from Gilead. So the drugmaker altered its patient assistance program criteria to exclude patients whose insurers had set limits on its drugs or were willing to cover only AbbVie's ($ABBV) competing product Viekira Pak. Gilead has indicated it is cooperating with the request from investigators.  

- read the Bloomberg story  

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