Recently, The Assistance Fund (TAF) announced that it reached an agreement with the United States Department of Justice (DOJ) and the Department of Health and Human Services Office of Inspector General (HHS-OIG) resolving allegations surrounding TAF’s Multiple Sclerosis (MS) Copay Program. According to the government, TAF allegedly violated the False Claims Act (FCA) by allowing certain pharmaceutical companies to pay kickbacks to Medicare patients who were taking the companies’ drugs.
TAF had a fund that was purported to be for any Medicare patient with MS. However, according to the government’s allegations, TAF conspired with three manufacturers of MS drugs (Teva, Biogen, and Novartis) so that the fund instead operated as a conduit for money from those manufacturers to patients taking their MS drugs. Such a conspiracy enabled the pharmaceutical companies to ensure that Medicare patients did not consider high prescription costs when filling their prescription. The conspiracy also minimized the possibility that the companies’ money would go toward patients taking MS drugs made by other companies not involved.
Pharmaceutical companies are not permitted to offer or pay any kind of remuneration (direct or indirect) to induce Medicare patients to purchase their drugs. Further, third parties, such as foundations, are not allowed to conspire with pharmaceutical companies to circumvent the law and the Anti-Kickback Statute.
Teva
TAF’s MS fund provided grants to cover Medicare copays for patients taking the Teva drug Copaxone. In the month of December prior to each of the years 2011-2015, TAF conveyed to Teva how much money TAF’s MS fund needed to renew co-pay grants for the fund’s existing Copaxone patients in the upcoming year. In order to determine these amounts, which ranged from over $18 million to over $30 million per year, TAF multiplied the number of Copaxone patients in the fund by the fund’s average grant amount, and then added the cost of TAF’s administrative fee. TAF understood that Teva knew how TAF was calculating the amounts of these funding requests, and that, accordingly, Teva was using TAF’s MS fund as a conduit to cover Medicare co-pays for Copaxone patients.
Also, from 2011 to 2014, in addition to the large payments Teva made to TAF’s MS fund to cover the renewal of grants for Copaxone patients at the beginning of each year, Teva also made numerous smaller payments, typically less than $3 million each, to TAF’s MS fund at subsequent times during each year. With each of these smaller payments, TAF coordinated with Teva and Teva’s vendor, Advanced Care Scripts (“ACS”), to ensure that Copaxone patients received a disproportionate share of the grants from the fund during each window when the fund opened after a Teva payment. Each time Teva made a payment, TAF knew that ACS had told Teva how many Copaxone patients were awaiting assistance. Meanwhile, TAF had told Teva the average MS fund grant amount at the time of the payment. TAF knew that Teva was doing the math, multiplying the average grant amount by the number of waiting Copaxone patients, to determine the amounts Teva would pay the MS fund. TAF further knew that, after Teva made a payment to TAF’s MS fund and the fund opened, ACS would send a “batch file” of Medicare co-pay assistance applications for Copaxone patients immediately. Therefore, each time TAF’s MS fund would open after one of Teva’s “smaller” payments, Copaxone patients received a substantial majority of the grants that the fund provided, even though Copaxone accounted for much less than a majority of the overall MS drug market. Further, TAF maintained a “portal” that gave ACS real-time access to the enrollment status of the patients ACS referred; the portal, as TAF knew, enabled ACS to update Teva on the number of Copaxone patients who had received grants from TAF’s MS fund.
Biogen
TAF’s MS fund provided grants to cover Medicare co-pays for patients taking Avonex and Tysabri, both drugs sold by Biogen. Biogen made payments to the MS fund on May 24, 2012 and July 17, 2012, as part of a coordinated effort by TAF and Biogen to use Biogen’s money to cover Medicare co-pays for Tysabri patients. TAF knew that, when the fund opened after each of these two Biogen payments, ACS would send a “batch file” of Medicare co-pay assistance applications for Tysabri patients. As a result, when TAF’s MS fund opened after Biogen’s payments on May 24, 2012 and July 17, 2012, Tysabri patients received a disproportionate share of the grants that the fund provided. During the course of this scheme, a TAF co-founder e-mailed a Biogen vice president and referred to the scheme as the “TYS[abri] project.” The e-mail confirmed that the scheme had succeeded in funneling money from Biogen to Tysabri patients through TAF’s MS fund.
Novartis
TAF’s MS fund provided grants to cover Medicare copays for patients taking Gilenya, a Novartis-manufactured drug. Beginning in October 2012, TAF and Novartis began to coordinate on a way to ensure that Novartis’ next payment to TAF’s MS fund would go almost exclusively to Gilenya patients. TAF and Novartis agreed that Novartis would pay TAF’s MS fund $1,418,000 and that TAF would open the fund at 6:00 p.m. on Friday, December 14, 2012. TAF knew that Novartis had arranged for staff from Novartis’s vendor, Express Scripts, to work overtime that night and the following morning to refer Gilenya patients to TAF’s MS fund for Medicare co-pay assistance. Express Scripts and TAF referred to this effort as their “12/15 Saturday project.” TAF knew that the timing of the opening of the fund, and the readiness of Express Scripts to submit applications on behalf of Gilenya patients at that time, would result in Gilenya patients receiving a disproportionate share of the grants from the fund while it was open. After the fund closed on Saturday, December 15, 2012, TAF confirmed that, during the brief period the fund had been open, TAF used Novartis’s money to provide Medicare co-pay grants to 374 Gilenya patients and 6 non-Gilenya patients.
Comments on the Conduct
“Foundations that coordinate with pharmaceutical company donors to benefit the donors are not operating independently to equitably benefit needy patients,” said Gregory E. Demske, Chief Counsel to the Inspector General. “Our Integrity Agreements promote independence between foundations and their donors and require the foundations to provide assistance to eligible patients on a first-come, first-served basis.”
According to a TAF statement, the alleged conduct occurred when the MS Copay Program was under the direction or control of TAF’s former management and TAF fully cooperated with the government’s investigation.
Corporate Integrity Agreement
In addition to the monetary settlement, TAF entered a three-year Corporate Integrity Agreement (CIA) with HHS-OIG. The CIA requires, among other things, that TAF implement measures to ensure that it operates independently and that its arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law. The CIA also requires compliance-related certifications from TAF’s Board of Directors and detailed reviews by an independent review organization.
Ongoing Investigation
TAF is the third foundation to settle similar allegations in recent months. In total, the three foundations (TAF, Chronic Disease Fund, and Patient Access Network Foundation) have paid $10 million. In addition, the United States has collected more than $840 million in total from eight pharmaceutical companies (United Therapeutics, Pfizer, Actelion, Jazz, Lundbeck, Alexion, Astellas and Amgen) to resolve allegations that they used third-party foundations as conduits for kickbacks.