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Will HHS increase oversight of patient assistance charities?

Lawmakers are encouraging the United States Department of Health and Human Services (HHS) to increase oversight of patient assistance charities. These charities are set up to help pay for the cost of prescription medications. However, there are allegations the charities are involved in Anti-Kickback Statute violations. As a result, lawmakers are calling for increased regulation of patient assistance charities.

What is the concern?

According to some lawmakers, certain drug makers are using patient assistance charities to offer illegal kickback payments to Medicare beneficiaries. The Anti-Kickback Statute (AKS) is a complex law that covers many different activities. In this case, a number of lawsuits have moved forward where the government has accused drug manufacturers of using these charitable organizations to illegally offer patients money, directly or indirectly, in exchange for purchasing their medications through funds provided by the patient assistance charities.

The lawmakers state additional oversight is required as the drug manufacturers are getting two potentially unethical benefits from this arrangement:

  • Illegal kickbacks lead to increased drug sales.
  • Use of charitable organization results in tax savings.

The allegations span many different drug manufacturers, including Pfizer and United Therapeutics. According to a recent publication by Becker’s Hospital Review, eight drug makers have paid over $840 million to settle similar allegations.

What is the suggestion?

In an effort to reduce the risk of future AKS violations, the lawmakers have suggested prohibiting drug manufacturers from donating to these types of charities. The lawmakers would also like for these charities to release annual reports to increase their financial transparency.

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