Drug Firms Fined For Using Nonprofits As Shield

It is going to cost two drug companies a combined nearly $125 million to settle claims by the U.S. Department of Justice (DOJ) that they funded nonprofits to as a way to get their pharmaceuticals used by patients.

Japanese firm Astellas Pharma will pay $100 million and Amgen in Thousand Oaks, Calif, will pay $24.75 million. Neither company admitted wrongdoing.

The DOJ alleged the firms used charities as a method of improperly covering the copays of Medicare patients using their drugs. It’s a violation of the federal Anti-Kickback Statute.

The charities identified by the DOJ are Patient Access Network (PAN) Foundation in Bethesda, Md., and Chronic Disease Fund, now known as Good Days, in Plano, Texas. Good Days did not respond to messages seeking comment. PAN was quoted in media outlets as saying the case involved issues that occurred under its prior leadership.

The trouble came because copays are meant as a check on healthcare expenses by making patients pick up part of the cost. But drug firms are prohibited from subsidizing copayments for patients in Medicare. Companies can donate to independent nonprofits providing copay assistance.

Amgen released a statement: “This settlement reflects Amgen’s desire to put this legal matter behind it and focus on the needs of patients.” The statement went on that “Donations to independent charitable organizations can provide significant assistance to patients with their copayments for prescriptions, and Amgen continues to believe these programs help patients lead healthier lives. As an element of Amgen’s efforts to help ensure patients have access to critical medicines, Amgen continues to donate to independent charity patient assistance programs.”

The medications involved were prostate cancer drug Xtandi by Astellas and Amgen’s drug Sensipar for hyperthyroidism. The DOJ alleged that Astellas had two foundations only cover co-pays for patients using androgen receptor inhibitors.