Major charity under fire for pharma ties and may close up shop

HHS officials have rescinded a previous positive decision on a patient assistance charity.

As a federal investigation into pharma's ties with patient assistance charities spreads to some of the biggest names in the drug business, a major charity is taking heat from U.S. officials and may shutter. 

In a redacted letter (PDF), the HHS' Office of Inspector General revoked a previous positive opinion issued to a patient assistance charity for failing to live up to previous commitments. In an email to FiercePharma, Caring Voice Coalition CEO Gregory Smiley acknowledged CVC is the charity named in the letter.

"Our board of directors is evaluating this very serious matter and will determine the most appropriate path forward," Smiley wrote. "We are very disappointed to receive this news, particularly given the work we have undertaken over the past six months, including dramatic leadership and comprehensive policy overhauls to ensure that we comply with the laws and regulations applicable to the independent patient assistance program industry."

The group received $153 million in corporate contributions in 2016, up from $131 million in 2015, according to its financial statements. Bloomberg reports the organization is funded mostly by pharma.

RELATED: IRS investigates patient charity as a possible 'conduit' for Big Pharma sales 

Back in 2006, federal officials issued a positive advisory opinion (PDF) for the group based solely on facts and statements it provided. But according to OIG, the organization failed to "fully, completely and accurately disclose all relevant and material facts" and must lose the distinction.

Specifically, according to the government, CVC gave patient-specific data to one or more donors and allowed donors to "influence the identification or delineation" of its disease categories. Pharmaceutical companies can contribute to patient assistance charities on the condition that the money isn't tied to financial support for specific drugs, and a federal probe is ongoing to determine whether that's the case in reality. 

The government's letter says the charity's "failure to comply" with its previous statements "materially increased the risk" that it served as a "conduit" from pharma to patients, "and thus increased the risk that the patients who sought assistance … would be steered to federally reimbursable drugs that the manufacturer donor sold." 

RELATED: J&J joins Pfizer, Celgene, Biogen and more in DOJ's patient-assistance dragnet

As industry watchers know, the issue has come up in a big way over the last year, as many drugmakers have disclosed probes into their charity contributions. The government said such "steering" can harm both patients and federal healthcare systems because patients can be led to pricey drugs "if copayment assistance is available for that drug" but not for cheaper options.

Then, according to the letter, drug companies have more leverage to raise their prices while patients don't feel the out-of-pocket effects and taxpayers are left with excess costs. The government said it's in the public interest to rescind its previous CVC decision and that the charity has indicated it may shutter due to the decision, but that it doesn't have to. 

"Nothing in this letter limits the investigational or prosecutorial authority of OIG, the Department of Justice or any other agency of the government," OIG's chief counsel Gregory Demske wrote in the letter.

RELATED: Astellas joins crowd of pharmas under investigation for copay charity donations 

Smiley wrote to FiercePharma that "given the integral support CVC provides to patients facing increasing burdens under an unsteady and complicated U.S. health care system," his group "hoped for better news."

"People living with chronic illnesses are our top priority and, as always, we will make decisions with their best interests in mind," he added.

Over the last year, a growing number of drugmakers have acknowledged they're under investigation for charity contributions. The probe has grown to include Pfizer, Johnson & Johnson, Biogen, Gilead, Astellas and numerous other companies. Aegerion had a settlement inked with the feds but a judge recently rejected the deal and sent the case to trial.