January 9, 2018 / 1:36 AM / 2 years ago

Drug charity sues U.S. over restrictions on donor communications

BOSTON (Reuters) - A U.S. charity offering assistance to patients on out-of-pocket drug costs on Monday sued the federal government over restrictions on its ability to communicate with drugmakers who donate to it.

The charity, Patient Services Inc, filed the lawsuit in federal court in Richmond, Virginia. It came amid a U.S. Justice Department investigation into drugmakers’ financial support of patient assistance charities.

Drugmakers are prohibited from subsidizing co-payments for patients enrolled in Medicare, the government healthcare program for the elderly. But they may donate to non-profits providing co-pay assistance as long as the charities are independent.

Amid increased attention to rising drug prices, concern has arisen that drugmakers’ donations to such charities may be contributing to price inflation.

In its lawsuit, Midlothian, Virginia-based PSI said it had long operated under an advisory opinion issued by the U.S. Department of Health and Human Services Office of Inspector General that essentially gave it approval to help Medicare patients.

But PSI said the Office of Inspector General in 2017 imposed new guidance requiring it to refrain from engaging in conversations with drugmakers that are donors to obtain information about issues like patient populations and drug costs used to create programs.

“The OIG’s restrictions on PSI’s communications with donors are unreasonable, unfair and unconstitutional,” PSI’s general counsel, Neil Millhiser, said in a statement.

The agency declined to comment.

The Justice Department has been investigating drugmakers’ support of charities like PSI. The investigation led United Therapeutics Corp in December to pay $210 million to claims related to its support of one charity.

That charity, Caring Voice Coalition, last week said it will not provide financial aid in 2018 after the inspector general revoked its advisory opinion.

In September, the Justice Department alleged a PSI donor, Aegerion Pharmaceuticals Inc, violated an anti-kickback law by using PSI to defray co-payments for patients prescribed an expensive cholesterol drug, Juxtapid.

The government alleged PSI promoted its ability to create a “reimbursement vehicle” for Aegerion, which was able to eliminate price sensitivity for Juxtapid via an Aegerion-supported fund that PSI created.

Aegerion, a Novelion Therapeutics Inc unit, agreed to pay $40.1 million to resolve probes into its promotion of Juxtapid. PSI was not charged and denies funneling funds for manufacturers.

PSI has said it helps hundreds of thousands of patients, but expects to help 2,000 fewer people in 2018 due to a 17 percent drop in its operating budget caused by reduced donations.

Reporting by Nate Raymond in Boston; Editing by Leslie Adler

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