BOSTON (Reuters) – A U.S. charity that offers assistance to patients seeking help to cover out-of-pocket drug costs on Monday said it has been contacted in a connection with federal investigation into drugmakers’ financial support of non-profits like itself.
Patient Services Inc’s disclosure came after the U.S. Justice Department on Friday said one of its donors, Aegerion Pharmaceuticals Inc, illegally used the non-profit to defray co-payments for patients prescribed an expensive cholesterol drug.
The Justice Department made that claim in papers filed in Boston federal court as part of Aegerion’s agreement to plead guilty to two misdemeanors and pay $40.1 million to resolve probes into its marketing of the drug, Juxtapid.
Aegerion, a Novelion Therapeutics Inc unit, is one of around a dozen drugmakers that have disclosed investigations into their support of charities that help patients cover co-payments.
Patient Services Inc (PSI) in a statement said it cooperated in the Aegerion investigation. It also said it has been contacted as part of the overall charity-related inquiry by the U.S. Attorney’s Office in Massachusetts and is cooperating.
“PSI operates under guidelines set by the U.S. Health and Human Services Department Office of the Inspector General and does not ‘funnel funds’ for manufacturers,” PSI said.
Drug companies are prohibited from subsidizing co-payments for patients enrolled in government healthcare programs like Medicare. But companies may donate to non-profits providing co-pay assistance as long as they are independent.
Amid increased attention to rising drug prices, concern has arisen that donations from drugmakers to patient-assistance groups may be contributing to price inflation.
Companies including Pfizer Inc and Johnson & Johnson have received subpoenas seeking information related to their support of such charities. United Therapeutics Corp in July said it set aside $210 million to resolve claims arising from the probe.
In Aegerion’s case, prosecutors said after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating high cholesterol in people with a rare genetic disease, Aegerion promoted it for patients who did not have the condition.
The U.S. Attorney’s Office also as part of a civil settlement said Aegerion violated a anti-kickback law by funneling funds through PSI to induce Juxtapid purchases by defraying patient’s co-payment obligations for the drug, which eventually cost $330,000 annually.
The government alleged PSI promoted its ability to create a “reimbursement vehicle” for Aegerion, which was able to eliminate price sensitivity for Juxtapid via a fund PSI created that Aegerion funded.
Reporting by Nate Raymond in Boston; Editing by Marguerita Choy