Pfizer’s rare heart disease med Vyndaqel, at $225,000 a year, is too pricey for many patients. To help Medicare participants afford the expensive drug—and maintain its hefty sticker price—the Big Pharma is going as far as to argue the U.S. government’s anti-kickback policy is unconstitutional.
In a lawsuit filed in a New York district court, Pfizer questions two federal regulations that prohibit drugmakers from offering direct payments to help cover a drug’s cost or working with charity programs to direct their funding—and Medicare patients—to a particular medicine.
The lawsuit comes as the Justice Department and state attorneys general clamp down on pharma's donations to patient assistance organizations, specifically for directing their contributions to patients using their drugs. And it addresses rules that have long chafed at drugmakers with expensive medications for the 65-and-older crowd—rules that are designed to prevent pharma from incentivizing use of expensive drugs with cheaper alternatives.
If Pfizer's argument succeeds, essentially, it would open up federal insurance programs to the sort of copay assistance drugmakers often offer to privately insured patients, particularly for pricey medications and new launches.
The Vyndaqel math
According to Pfizer, under Medicare Part D, a patient would normally have to pay $13,000 a year out of pocket to get Vyndaqel (tafamidis) or its sister formulation Vyndamax. That means the drug is only affordable to the wealthy and to those with incomes so low that Medicare waives almost all their out-of-pocket costs. And Medicare covers most of Vyndaqel patients, because the condition it treats, called transthyretin amyloid cardiomyopathy (ATTR-CM), mostly affects people 65 years and older.
Slashing the drugs' prices directly wouldn't work, the lawsuit claims, because even at half the cost, Medicare Part D would still require patients to shell out $8,000 per year. Instead, Pfizer would like to offer programs that cap copays at $35 per month for eligible patients, the lawsuit says.
The pharma giant argues that its Medicare assistance programs would not constitute an illegal kickback, that they present “no risk of inappropriately steering ATTR-CM patients toward tafamidis or improperly inducing prescriptions for tafamidis,” given that the med is the only medicine approved in the U.S. to treat the condition.
In Pfizer's view, strict enforcement practices by HHS’ Office of Inspector General and the DOJ have basically ruled all financial support to middle-income Medicare patients as kickbacks, Pfizer states.
One way out of the dilemma is to get a special ruling from the OIG so that it wouldn’t have to fear legal actions. However, the agency has over the past year declined to acknowledge that Pfizer’s proposed programs are legal or to propose modifications, the company says in its complaint.
A much bigger argument
But Pfizer doesn’t just stop at making a case from the standpoint of its own tafamidis offerings, it’s trying to overthrow OIG’s entire interpretation of the anti-kickback laws by invoking the Constitution.
The company argues that, by restricting drugmakers’—but not other industries’—communications and donations to charities that provide for Medicare patients, the OIG violates the First Amendment’s Free Speech guarantee.
Plus, as the interpretation effectively deprives only middle-income Medicare enrollees of benefits “based solely on their economic status,” it would violate “the equal protection principles enshrined” in the Fifth Amendment, Pfizer says.
If a judge finally rules in favor of Pfizer following that rationale, it would mean a huge difference for the pharma industry.
Many drugmakers have faced kickback lawsuits over the years. Pfizer itself was among a who’s who of pharma roped into a DOJ copay charity probe. In 2018, the New York pharma settled the suit after agreeing to pay $23.85 million over allegations it used a patient foundation as a “conduit” to cover Medicare patients' copays for its cancer drugs Sutent and Inlyta, and arrhythmia drug Tikosyn.
Fellow New York company Regeneron is facing a new federal suit alleging it gave tens of millions of dollars to a patient foundation to boost sales of its blockbuster eye drug Eylea.