Pricing debate changes perception of patient assistance programs

Drugmakers sometimes promote patient assistance programs in direct-to-consumer ads. Here, AstraZeneca's ad for its diabetes drug Farxiga states: "If you can't afford your medication, AstraZeneca may be able to to help."

During a recent House hearing on drug pricing, Turing Pharmaceuticals chief commercial officer Nancy Retzlaff, on the stand to testify about a 5,000% price increase on the firm's toxoplasmosis treatment Daraprim, defended the dramatic hike in part by noting that the drugmaker provides access through patient assistance programs.

Members of the House Committee on Oversight and Government Reform weren't impressed that Turing's strategy, put in place by embattled ex-CEO Martin Shkreli, was good for patients.

“Turing employed a PR strategy to divert attention to patient assistance programs and research and development efforts,” charged Rep. Eleanor Holmes Norton (D-DC), based on disclosures released in documents obtained by the committee. “In other words, instead of keeping the price so it could be purchased by patients and hospitals, you went to patient assistance programs to try to obscure the price.”

See also: House Oversight committee upbraids Turing, Valeant execs

Retzlaff responded that the PR strategy was meant to “correct any miscommunication."

The testy exchange signals a shift in the perception of a tactic that industry may once have considered the very essence of what it means to be patient centric. Affordability is no longer an unassailable talking point for industry.

How did it come to this? Providing financial assistance to patients has become a common refrain in drugmakers' defense of high-priced drugs. Many pharma companies say that even though they charge lofty sums for new medicines, they also give away some medication at no cost to eligible patients—the uninsured and underinsured—and they use their profits to invest in the R&D of the next great drug.

See also: Valeant's controversial model undergoing changes, says CEO

Access programs have “always been a way for companies to talk about the good things that they're doing,” says Andrea Day, who helped design Pfizer's patient assistance programs and now works as a patient access and reimbursement consultant. Now, “it could be viewed as a defense. It could also be viewed as the company's belief that patients who don't have coverage should have access to medicines.”

That defense is becoming problematic in discussions about drug pricing. That is, although the programs can be used to help address the needs of some patients, they do not address the cause of high prices. Some experts believe that, in pricing drugs high, companies actually create the need for patient assistance programs. Critics contend that drugmakers price therapies at the highest price the market will bear and then make exceptions for those who can't afford it.

Take the case of Daraprim. Pharmacy benefit manager Express Scripts was one critic saying that Turing's drug is a poor example of the benefits of patient assistance programs. The medicine has been on the market for decades and was acquired in August by Turing, which raised the price and set off a furor about drug-pricing practices in the US.

“This is an old, simple generic medication, and it shouldn't have a price high enough to even warrant a patient assistance program for low-income patients,” says David Whitrap, a company spokesperson.

See also: Turing price controversy fuels drug-pricing debate

Association with high prices is just one reason such programs are taking a hit. Perhaps compounding their perception problem is that the amount of money pharma spends on them has itself become a talking point, and a rather expensive one at that.

Valeant Pharmaceuticals disclosed to the same House committee that it spent approximately $544 million in 2014 on patient assistance programs compared to $8.25 billion in revenue. As of September 2015, the company had spent approximately $476 million on patient assistance compared to $7.5 billion in revenue. Valeant plans to spend over $1 billion on patient assistance in 2016, according to company disclosures. 

Indeed, whether or not you agree with Rep. Norton—that drugmakers cannot both raise prices and employ the use of financial assistance programs—her assertion that these programs deflect attention away from the pricing debate raises an important question about whether they also contribute to the high prices charged by some manufacturers, or whether they add another layer of complexity to the healthcare system. 

“Prescription assistance programs are...a major contributor to the convoluted relationships among payers, manufacturers, and insurance companies that result in inflated drug prices and disparities in copay costs,” Philip Schwieterman, pharmacy director for the Markey Cancer Center at the University of Kentucky, wrote in a December commentary in the American Journal of Health Systems.

While a clear link between the use of assistance programs and high prices has not been established, Schwieterman's use of the word “convoluted” is notable here. The US health system is woefully complicated, and assistance programs themselves don't necessarily cut through the confusion.

“There are very few generalities you can say about [patient assistance programs],” says Dr. Rich Sagall, president of NeedyMeds, a patient assistance program information resource. “Each has its own quirks.”

For example, income eligibility requirements can vary from 100% of the federal poverty level to 500% of the federal poverty level, and insurance requirements often vary, too.  

Patient assistance largely comes in two flavors: patient assistance programs, wherein a patient contacts a drugmaker directly to apply for financial assistance. The manufacturer then determines if they are eligible to receive their medication for free.

The other kind of assistance is co-pay cards or coupons, which allow patients to pick up a brand-name drug from the pharmacy at a reduced co-pay or without having to pay a co-pay at all. However, only patients with commercial insurance are eligible to use them, which excludes about 45% of the US population such as those on Medicare Part D, according to research from the Kaiser Family Foundation.

There is another common theme that unites these programs: a lack of awareness. Sagall says the biggest knowledge gap around them is that patients don't know they're available to begin with. “They don't know they exist,” Sagall says. “There are a few [drugmakers] that promote them, but most don't.”

New research shows that nearly half of Americans younger than 65 years old are unaware of co-pay programs. Forty-seven percent of the 1,000 American adults surveyed by Finn Partners said that they were not too or not at all familiar with co-pay cards.

These criticisms are at odds with the traditional view of patient assistance programs: that they're part of doing business for the industry, they have become a requisite for the launch of a branded drug, and they are considered part of the industry's do-good machinery.

“These programs are not a deflection on price,” Day argues. “From my experience, these programs aim to put the patient at the center. These companies have a call center and part of the training is to really understand what the patient's needs are. These programs are a face of the company to a patient, to a doctor's office.”

Holly Campbell, a spokesperson for the Pharmaceutical Researchers and Manufacturers of America, the pharmaceutical lobbying group, said that making sure patients can access the medicines they need is a “critical” challenge, and that patient assistance and co-pay programs “play an important role in maintaining access to needed medicines.”

PhRMA recently launched an ad campaign (pictured above) that will promote the financial assistance programs that manufacturers provide.

One way to combat the criticisms? Stop using prescription drug access programs as a defense for high prices. Day asserts that the conversation about drug pricing shouldn't include the mention of patient assistance programs. “I don't think it's related to the pricing discussion,” she notes. “I think the discussion has to be around what value the drug brings to the system.

“I would be surprised if a pharmaceutical executive thought these programs were a solution to price or enabling high price,” she adds. “I think a company might use it as talking point about the help they provide when they're getting challenged on high prices.”