Two nonprofits that provide co-payment assistance to patients will pay a combined $6 million as part of a settlement with the U.S. Attorney’s Office of Massachusetts.
Good Days, formerly called Chronic Disease Fund, and Patient Access Network Foundation (PANF) have agreed to pay $2 million and $4 million, respectively, to resolve allegations that they violated the False Claims Act by enabling pharmaceutical companies to pay kickbacks to Medicare patients taking the companies’ drugs.
Both organizations also entered a three-year Integrity Agreement (AI) with the Office of Inspector General (OIG). Foundations must implement measures designed to ensure that they operate independently and that their arrangements and interactions with pharmaceutical manufacturer donors comply with the law.
The Anti-Kickback Statute prohibits pharmaceutical companies from offering or paying, directly or indirectly, any remuneration to induce Medicare patients to purchase the companies’ drugs. The law prohibits third parties, such as co-pay foundations, from conspiring with pharmaceutical companies to violate the Anti-Kickback Statute.
The schemes enabled pharmaceutical companies to ensure that Medicare patients did not consider the high costs that the companies charged for their drugs, and minimized the possibility that the companies’ money would go to patients taking competing drugs made by other companies.
CDF and PANF function not as independent charities but as pass-throughs for specific pharmaceutical companies to pay kickbacks to Medicare patients taking their drugs, according to U.S. Attorney Andrew E. Lelling. CDF and PANF enabled their pharmaceutical company donors to undermine the Medicare program at the expense of American taxpayers.
The U.S. alleged that from 2010 through 2014, GoodDays conspired with Novartis, Dendreon, Astellas, Onyx and Questor to enable them to pay kickbacks to Medicare patients taking their drugs. From 2011 through 2014, PANF permitted four pharmaceutical companies — Bayer, Astellas, Dendreon and Amgen — to use PANF as a conduit to pay kickbacks to Medicare patients taking their drugs.
Patient and co-payment assistance organizations like Good Days and PANF have been on the rise in recent years. Both were ranked in the 2019 NPT 100, released this month, as among the largest charities in the U.S. PANF reported total revenue of $540 million, ranking No. 38, and GoodDays was No. 89 with revenue of $240 million.
In separate statements, neither organization mentioned the financial terms of the settlement. PANF President and CEO Dan Klein said, in part, the agreement does not involve any of its current operations or disease funds, which are reviewed annually by an independent review organization to comply with OIG guidelines and its advisory opinion.
The settlement reflects the organizations desire to move forward and concentrate on providing assistance to people in need of life-saving and life-extending treatments, said Clorinda Walley, president of Good Days. “We will comply with all regulatory requirements surrounding charitable copay assistance programs and we welcome further clarity and OIG guidance to ensure that we continue to put patients in need first,” she said.
Drug makers also paid a combined $350 million in the federal probe, dating back to 2017, including Pfizer, Jazz, Lundbeck, Alexion, and United Therapeutics.