After two legal defeats, Pfizer is taking its copay assistance lawsuit for costly rare heart disease drug tafamidis to the Supreme Court. Once again, the company is challenging the U.S. Department of Health and Human Services’ (HHS') interpretation of anti-kickback law.
Pfizer is asking the Supreme Court to decide whether a proposed program to help Medicare patients pay out-of-pocket costs for its tafamidis drugs—Vyndaqel and Vyndamax—would violate U.S. anti-kickback laws. An HHS opinion in 2019 ruled against Pfizer, finding that such an arrangement would break a criminal ban on financial support to patients for a federally reimbursed healthcare product. Pfizer sued to overturn the ruling, but two courts have since sided with the U.S. government.
As Pfizer sees it, the case represents “an optimal vehicle” for the Supreme Court to address the HHS’ “staggeringly overbroad” interpretation of U.S. anti-kickback laws, the company said in its petition (PDF). But critics have viewed Pfizer’s case as an attempt to weaken the HHS’ safeguards against illegal payment to Medicare patients.
The argument centers on whether the existing anti-kickback law requires an element of corrupt intent for financial support to Medicare patients to be considered illegal. Both the HHS and two lower courts believe ill intent is not needed for such payments to be deemed kickbacks, while Pfizer thinks it is.
The Vyndaqel/Vyndamax case is an ideal vehicle, Pfizer said, as its patient-assistance program for the therapy “poses no risk of corrupting independent medical decision-making.” That’s because the Vyndaqel/Vyndamax brands are currently the only FDA-approved drugs to treat transthyretin amyloid cardiomyopathy (ATTR-CM), a rare, life-threatening heart disease that mostly happen in elderly people, or Medicare beneficiaries. So, the company argues, there’s no element of seeking to alter treatment decisions in favor of the Pfizer drugs over a rival.
But that window may be quickly closing. Alnylam looks on track to break into ATTR-CM after reporting positive phase 3 data for its Onpattro. The RNA silencing drug came to the U.S. market in 2018 bearing a list price of about $450,000 for another even rarer form of ATTR called neuropathy that affects the peripheral nerve system. Alnylam didn’t immediately respond to a Fierce Pharma request for comment.
Vyndaqel/Vyndamax currently cost $225,000 a year, and, under Medicare’s formula, patients are responsible for a co-pay of about $13,000 per year. Pfizer’s proposed assistance program would lower the out-of-pocket cost to $35 per month, according to the company.
Pfizer argues that its copay assistance program would not “induce” improper utilization of the tafamidis drugs, but merely “influences” a patient’s ability to access the treatment. The HHS, however, argues it breaks the law because it would induce a patient to purchase tafamidis by removing a financial obstacle.
To Pfizer, HHS is presenting an overly broad interpretation of the anti-kickback statue that “outlaws a wide swath of routine, beneficial conduct” within Medicare. The statute’s “text, structure, and history,” such as the Congress’ use of the words “kickback, bribe, or rebate,” show that the law “targets only payments made to corrupt decisionmaking,” Pfizer contends. HHS’ move is also “out of step” with the Supreme Court’s “longstanding efforts to ensure that criminal laws do not sweep more broadly than Congress intended,” the New York drugmaker said.
The Supreme Court has until Nov. 14 to decide whether to take on the case. A win for Pfizer would have detrimental effects on drug pricing controls in the U.S., lawyers previously told Fierce Pharma.
Since cost sharing is “really the only check against pricing,” if drugmakers were allowed to “greatly reduce or even eliminate those cost-sharing obligations, there would be essentially no economic cap on pricing,” Bass, Berry & Sims lawyer Jennifer Michael said in an interview last year. Michael previously led the industry guidance branch counseling the HHS' Office of Inspector General.