How Big Pharma Uses Charity Programs to Cover for Drug Price Hikes

[LiberalArkie]

In August 2015, Turing Pharmaceuticals and its then-chief executive, Martin Shkreli, purchased a drug called Daraprim and immediately raised its price more than 5,000 percent. Within days, Turing contacted Patient Services Inc., or PSI, a charity that helps people meet the insurance copayments on costly drugs. Turing wanted PSI to create a fund for patients with toxoplasmosis, a parasitic infection that is most often treated with Daraprim.

Having just made Daraprim much more costly, Turing was now offering to make it more affordable. But this is not a feel-good story. It’s a story about why expensive drugs keep getting more expensive, and how U.S. taxpayers support a billion-dollar system in which charitable giving is, in effect, a very profitable form of investing for drug companies—one that may also be tax-deductible.

PSI, which runs similar programs for more than 20 diseases, jumped at Turing’s offer and suggested the company kick things off with a donation of $22 million, including $1.6 million for the charity’s costs. That got Turing’s attention. “Did you see the amounts??? $22MM!!!” wrote Tina Ghorban, Turing’s senior director of business analytics, in an e-mail to a colleague. (The document was obtained by congressional investigators looking into the company’s pricing.) Turing ultimately agreed to contribute $1 million for the patient fund, plus $80,000 for PSI’s costs.

PSI is a patient-assistance charitable organization, commonly known as a copay charity. It’s one of seven large charities (among many smaller ones) offering assistance to some of the 40 million Americans covered through the government-funded Medicare drug program. Those who meet income guidelines can get much or all of their out-of-pocket drug costs covered by a charity: a large initial copay for a prescription, another sum known as the coverage gap or the donut hole, and more-modest ongoing costs. It adds up fast. After Turing raised Daraprim’s price, some toxoplasmosis patients on Medicare had initial out-of-pocket costs of as much as $3,000.

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http://www.bloomberg.com/news/articles/2016-05-19/the-real-reason-big-pharma-wants-to-help-pay-for-your-prescription

[Egnever]

1. Its a scam

No doubt about it.

I take a drug that through my insurance has a $2500 per month copay.... after insurance. Insane! there was a point last year when I thought I was going to have to just give in and accept my demise. There is no way we could pay that I don't see how anyone could or even how my insurance company can afford to cover the large portion they do.

I was "lucky" the manufacturer offers copay assistance that basically erases my portion. I am quite sure they do that to keep collecting the outrageous amount they will still collect from my insurance company since without it I would have been forced to stop taking it.

It's a game, the manufacturer raises their prices, the insurance companies balk and raise their copays to try to limit their exposure, and the manufacturer does an end run by providing the difference in the copay.

I am grateful it is available as without it I would likely be dead in a year or two but I recognize it for the gaming of the system that it is. If I had another option I would tell them to stick it in a heartbeat.