WASHINGTON DC (March 27, 2019) — Senate Finance Committee Chairman Charles "Chuck" Grassley of Iowa and Ranking Member Ron Wyden of Oregon are seeking information from the Department of Health and Human Services (HHS) Office of Inspector General (OIG) regarding recent federal investigations into potential illegal kickback schemes by some pharmaceutical companies to exploit charitable organizations by giving them money to pay the copays of Medicare patients while encouraging the use of the companies’ own drugs.
The charitable organizations, known as patient assistance programs (PAPs), are meant to help lower-income patients receive prescription drugs. The PAPs receive financial donations from pharmaceutical companies and are sometimes independent or associated with drug manufacturers. The Department of Justice has recently settled with multiple pharmaceutical companies under the False Claims Act for engaging in potentially illegal kickback schemes.
“The Anti-Kickback Statute prohibits companies from offering or paying, directly or indirectly, any remuneration to induce Medicare patients to purchase products,” the senators wrote. “Improper coordination and kickbacks are serious problems that undercut the integrity of the patient assistance process.” The leaders of the Senate Finance Committee are asking the HHS OIG for a list of patient assistance programs for which it has issued and/or withdrawn legal opinions and copies of those opinions.
Last month, Sens Grassley and Wyden launched a bipartisan investigation into the rising price of insulin, which included asking leading manufacturers to provide a list of all patient-assistance programs the companies have used or funded. The Finance Committee has jurisdiction over the Medicare and Medicaid programs. It also has jurisdiction over the laws and regulations governing tax exempt organizations.
The letter can be found here or below.
The Honorable Daniel R. Levinson
Inspector General
US Department of Health & Human Services
330 Independence Ave SW
Washington DC 20201
Dear Inspector General Levinson,
According to news reports, on November 28, 2017, your office rescinded an advisory opinion for a charitable organization regarding its activities related to the Caring Voice Coalition (CVC), a patient-assistance program (PAP).[1] Shortly thereafter, on December 20, 2017, the Justice Department issued a press-release announcing that United Therapeutics agreed to pay $210 million to resolve False Claims Act liability for paying kickbacks.[2] The settlement agreement mentioned that United Therapeutics used the Caring Voice Coalition as a conduit to pay the copay obligations of thousands of Medicare patients that used their drugs. Since the rescission and the United Therapeutics settlement were announced, Actelion Pharmaceuticals, Pfizer, Jazz Pharmaceuticals, and Lundbeck have each reached multi-million dollar settlements related to improper coordination with PAPs.[3]
The Anti-Kickback Statute prohibits companies from offering or paying, directly or indirectly, any remuneration to induce Medicare patients to purchase products. Improper coordination and kickbacks are serious problems that undercut the integrity of the patient-assistance process. To better understand the scope and nature of this issue, we are requesting that your office provide us with the following, no later than April 3, 2019:
1. A list of those entities for which the Office of Inspector General has issued favorable advisory opinions for their patient-assistance activities. Please include the current status of each advisory.
2. Unredacted copies of all advisory opinions currently in effect.
3. Unredacted copies of all notices of rescission that have been issued.
Thank you for your attention to this important matter. If you or your staff have any questions, please contact Josh Flynn-Brown of Chairman Grassley’s staff or Peter Gartrell of Ranking Member Wyden’s staff at (202) 224-4515.
Sincerely,
Charles E Grassley Ron Wyden
Chairman Ranking Member
Committee on Finance Committee on Finance
[1] Ben Elgin and Robert Langreth, Drug Charity May Shutter After U.S. Faults Pharma Influence,Bloomberg (Nov. 29, 2017), https://www.bloomberg.com/news/articles/2017-11-29/pharma-charity-may-shut-after-u-s-faults-drugmakers-influence.
[2] See Press Release, U.S. Dep’t. of Justice, Drug Maker United Therapeutics Agrees to Pay $210 Million to Resolve False Claims Act Liability for Paying Kickbacks (Dec. 20, 2017), https://www.justice.gov/opa/pr/drug-maker-united-therapeutics-agrees-pay-210-million-resolve-false-claims-act-liability.
[3] Nate Raymond, J&J Unit to Pay $360 Million to U.S. to Resolve Charity Kickback Probe, Reuters (Dec. 6, 2018), https://www.reuters.com/article/us-johnson-johnson-settlement/jj-unit-to-pay-360-million-to-u-s-to-resolve-charity-kickback-probe-idUSKBN1O51XB.
