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House Report on Drug Pricing Shows Continuing Potential for Whistleblower Suits Involving Patient Assistance Programs

A new Congressional report exposes ongoing abuses by pharmaceutical companies that seek to cover up the effects of high drug prices by financing co-pay foundations. On December 10, 2021, the United States House of Representatives Committee on Oversight and Reform issued a lengthy report on drug pricing. The report includes detailed findings on how “[d]rug companies often highlight the generosity of their patient assistance programs,” when in fact the companies use their support of co-pay foundations to drive up drug prices at the expense of American taxpayers and the U.S. health care system.

The report included the following notable findings:

  • From 2008 to 2017, Teva paid hundreds of millions of dollars to co-pay foundations to subsidize the high and ever-increasing price of Copaxone, referring to those expenditures as an “investment” for future returns. According to the report, in considering its funding of co-pay foundations for 2018, Teva recognized that eliminating that funding “would cost Teva up to $261 million in Copaxone sales.”
  • The largest co-pay foundation, Patient Assistance Network Foundation (PANF), pitched Abbvie, the maker of Humira, for more funding by asserting that financing of PANF would make patients “much more likely to start and stay on treatment” [i.e., Humira].
  • Among the “investment[s]” Johnson & Johnson planned to make in 2017 and 2018 to “maximize IMBRUVICA” sales growth” was tens of millions of dollars in payments to co-pay foundations.

The House report concludes notes that “[t]hese [co-pay] programs allow the companies to generate higher revenues by maintaining demand while raising prices. Although these programs defray some patients’ out-of-pocket costs, the overall cost to the health care system increases due to price increases.”

While the report does not explicitly address the role of whistleblowers in exposing pharmaceutical companies’ illegal use of supposedly “charitable” co-pay foundations for business purposes, the report suggests that the illegal behavior continues and is ripe for False Claims Act qui tam cases by whistleblowers.