(RepublicanInformer.com)- According to a new study, as a way to circumvent anti-kickback laws, for years, major pharmaceutical companies have been donating to nonprofit groups that then reward the companies by purchasing their drugs at a higher price.
Researchers from Harvard, Northwestern University, and the University of Southern California found that drug manufacturers are donating to nonprofit groups, even those with only a small number of patients, who are then purchasing the manufacturer’s products.
In short, for years drug companies have been paying nonprofit groups that help patients pay for treatments as a way to earn big profits.
Researchers examined the spending of three million Medicare Advantage patients from 2010 to 2017 and estimated that the percentage of Medicare Advantage spending that qualified for charity assistance increased from 29 percent to 41 percent during that time.
On average, half of the spending on medications for any given condition could be linked to a single pharmaceutical company. Of the ten most expensive medical conditions covered by Medicare Advantage, the top pharmaceutical manufacturer accounted for 89 percent of the total spending in 2017.
As an example, the drug company Takeda sells Gattex, a medication to treat short-bowel syndrome. As of 2017, Gattex held a 99.6 percent market share for the treatment of the condition.
After the FDA approved Gattex, a charity was set up to assist those suffering from short-bowel syndrome to pay for treatment. Takeda then donated to the charity which in turn agreed to cover the patient copays for Gattex, a medication which, by the way, costs almost $43,000 a month.
See how it works?
The purpose of anti-kickback laws is to prevent this kind of inducing of payments.
In 2019, the Justice Department shut down a charity called the Caring Voices Coalition over its similar ties to pharmaceutical companies.
In the past five years, the Justice Department has reached settlements with the drug manufacturers Actelion, Amgen, Alexion, Astellas, Jazz, Lundbeck, Pfizer, and United Therapeutics over similar allegations.
However, no pharmaceutical companies have faced prosecution over this kind of scheme.