Pfizer Pleads Case in Federal Court for Helping Seniors Pay Co-Pay for Medication

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Pfizer PFE,
-1.41%
presented its case against the federal government on Tuesday in a lawsuit that could upend drug prices as well as the government’s anti-fraud efforts.

In oral arguments in U.S. District Court for the Southern District of New York, the pharmaceutical giant asked for a ruling in favor of proposed programs that would allow the company to help cover the co-pay of Medicare patients taking medication. tafamidis, a cardiovascular drug for $ 225,000 per year.

The lawsuit against the US Department of Health and Human Services, filed last year, is a test of federal policies that prevent drug makers from providing direct help to Medicare patients and limit their ability to channel that aid. through independent patient support charities. Pharmaceutical companies offering anything of value to get Medicare patients to take their medications risk breaking federal anti-kickback laws.

Seeking a legal green light for copay assistance programs, “Pfizer is asking the court to do something unprecedented,” Justice Department attorney Jacob Lillywhite said during the virtual hearing. Such a move, he said, would overturn decades of case law and agency advice and “bless [Pfizer’s] program to encourage Medicare beneficiaries to buy ”tafamidis. Ilana Eisenstein, a DLA Piper attorney representing Pfizer, told the court that “it is not a remarkable idea” that Pfizer is concerned about the risk of coercive action if it continues with its proposed programs and seeks a ruling that these programs don’t violate the law.

A move in favor of Pfizer could have profound implications for drug costs and the government’s enforcement of anti-recoil laws, researchers and lawyers say. “Copays are really the only economic control over Medicare prices, because Medicare does not negotiate prices directly,” said Gregg Shapiro, partner at the Newman & Shapiro whistleblower law firm and former deputy US attorney in Boston. “If drug companies don’t have to think about copayments when setting prices, then the sky is the limit. “

In his previous role at the Justice Department, Shapiro helped raise more than $ 1 billion in settlements in cases involving drug companies allegedly violating anti-recoil laws by funneling money through foundations to cover Medicare patient co-payment for company drugs. A Pfizer victory in this case “would have deleterious effects” on the government’s anti-fraud efforts, he said. Although the decision would not be binding on any other judge, he said, “it would have influence.”

A legal green light for copay assistance programs could also boost sales of tafamidis, the only treatment approved by the Food and Drug Administration for a heart disease called transthyretin amyloid cardiomyopathy (ATTR-CM). Pfizer sells tafamidis under the names Vyndamax and Vyndaqel, which are already major growth engines for the company, generating $ 453 million in worldwide sales in the first quarter, an operational increase of 88% from last quarter. ‘last year.

The hearing took place the same day that Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, released a set of principles for drug price reform, including allowing Medicare to negotiate prices. price.

Pfizer is seeking a judgment in favor of two proposed programs: one would provide direct assistance to Medicare patients who are prescribed tafamidis and in financial need, while the other would fund an independent charity that supports them. Medicare beneficiaries diagnosed with ATTR-CM through co-pay help for tafamidis and other drugs to treat symptoms or side effects of treatment.

A slew of large pharmaceutical companies have recently been entangled in Justice Department cases alleging that their involvement in foundations covering Medicare patient copays has triggered violations of anti-recoil laws. In December, the Department of Justice announced that Biogen BIIB,
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had agreed to pay $ 22 million to resolve allegations it was illegally using foundations as a conduit to cover the co-pay of Medicare patients taking two of the company’s multiple sclerosis drugs. Biogen “does not agree with the government’s view on the facts and believes its conduct was appropriate,” the company said in a statement. The settlement is not an admission of liability, the company said, and “Biogen continues to believe that independent charitable assistance programs are helping patients lead healthier lives.”

A point of contention in the Pfizer case is the extent of the anti-recoil law. Pfizer has said in a court filing that an anti-recoil violation must involve a corrupt or inappropriate purpose – and there is no corruption in its proposed programs, he said, that could alter doctors’ clinical judgment. . But the law’s scope is not limited to bribes and bribes, the government said in a court filing. The law has generally been interpreted quite broadly, and “if a court were to take Pfizer’s point of view, it wouldn’t just impact this case.” It would impact all of the case law surrounding anti-kickback law, ”said Jennifer Michael, partner at Bass, Berry & Sims and former head of the industry guidance branch in the board’s office. inspector general of the HHS.

The cost of tafamidis also raised questions during Tuesday’s hearing. Rather than fighting a legal battle to help patients with tafamidis copy, “why isn’t Pfizer just cutting costs?” Asked Judge Mary Kay Vyskocil. But even cutting the price in half, Eisenstein told the court, would leave a large group of patients unable to afford the drugs.

Under Medicare Part D prescription drug benefit, registrants must shell out $ 6,550 out of pocket before attaining “catastrophic” coverage, where they are still typically responsible for 5% of the cost. ‘a drug, without a ceiling. Medicare covers 80% of the cost of drugs in the catastrophic phase, and Part D plans pay the remaining 15%. Programs that cover Medicare patient copayments, mitigate their price sensitivity, remove critical control over drug prices and put most of the bill on taxpayers, researchers say. If patients don’t have to factor in the costs and drug companies can charge what they want, Shapiro says, “eventually Medicare will collapse.”

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