PAP Series: Patient Assistance Programs "Culprits" of Rising Drug Prices

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The federal government is investigating some drugmakers’ relationships with the charities that run assistance programs.
The federal government is investigating some drugmakers’ relationships with the charities that run assistance programs.

Editor's Note: This article has been changed to add a quote provided by Dana Kuhn, founder and president of Patient Services Inc.

Pharmaceutical Patient Assistance Programs (PAPs) are under fire for their roles in keeping drug prices high. Federal investigators subpoenaed documents related to a half-dozen drug companies' relationships with ostensibly independent, charitable PAPs.

PAPs can mitigate the “financial toxicity” of treatment for many patients with cancer, including those who are insured, according to experts like Lisa Vlastelica, PharmD, BCOP, GI oncology clinical pharmacist at Duke University Medical Center in Durham, North Carolina. How many patients are helped is unclear, however, because these programs lack transparency; they are not routinely tracked by government agencies, and drug companies rarely share details publicly.

PAPs can be a life-line.1 Out-of-pocket expenses can discourage patient compliance with treatment plans, and encourage unreported skipped doses. This, in turn, can contribute to poor treatment outcomes.

Critics contend, however, that PAPs also serve as cover for ever-higher drug prices.2 PAPs pay much or all of one's co-pay, removing an incentive for patients to seek less-expensive alternative treatments. Insurers foot the bill for the rest, driving up co-pays and reducing opposition to drug-price inflation. Prescription drug prices climbed 10% overall in 2015 alone, and nearly 15% for on-patent, branded medications, well exceeding the United States inflation rate.3

“The issue is that payers have co-pays to encourage patients to use drugs that cost less and are just as effective,” explained Adriane Fugh-Berman, MD, associate professor of pharmacology and physiology at Georgetown University in Washington, DC. “By paying the co-pays, pharmaceutical companies save patients a little money while costing insurers a lot of money. They are getting around insurers' efforts to save money.”

Partly because federal anti-kickback regulations prevent drug company subsidies for Medicare beneficiaries, PAPs are frequently administered by independent nonprofits. By donating money to independent charities like Patient Services, Inc., drug companies can help ensure that patients' co-pay expenses are limited, or even eliminated.

PAPs compel insurers to pay for “extremely expensive drugs, while making pharmaceutical companies look like the good guys for supporting co-pay charities,” Fugh-Berman told Cancer Therapy Advisor

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