Pharmaceutical companies are sidestepping federal anti-kickback laws by donating to patient assistance programs, according to a study published in Health Affairs.
It's illegal for drugmakers to cover people's Medicare out-of-pocket costs for the medications they make, but some companies are donating to condition-specific charities that then cover their treatments. The loophole infringes on "the spirit of Medicare's Anti-Kickback Statute," the researchers wrote.
The study analyzed more than 3 million Medicare Advantage enrollees and their drug spending between 2010 and 2017. During that time, drugs covered by these patient assistance programs rose from 29 percent to 41 percent.
"Donations by the leading manufacturer of drugs for each condition were often likely to be profitable," even if the donations didn't prompt many patients to use the drug, according to the researchers from Harvard University in Cambridge, Mass., Evanston, Ill.-based Northwestern University and Los Angeles' University of Southern California.
The number of conditions covered, most of which are rare, nearly doubled. In 2010, 87 conditions were covered, and seven years later, that number rose to 154. The average cost for each condition also nearly doubled, with an increase from $12,297 to $23,084.
"Current federal guidance is insufficient to ensure that manufacturers are not earning kickbacks from their donations to patient assistance foundations," the researchers wrote. "This guidance should be rescinded or substantially revised."