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Drugmaker launches litigation against the US government to enable co-payments

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According to Reuters, Pfizer Inc. filed a lawsuit on June 26, 2020, to make it possible to help beneficiaries of the federal healthcare program - Medicare - pay for two drugs to treat a rare and sometimes fatal heart disease, and that cost $225,000 a year.

The drugmaker said that the Office of the Inspector General of the US Department of Health and Human Services (OIG) is preventing it from offering financial assistance to patients who cannot afford to co-pay for their medications Vyndaqel and Vyndamax because it considers such aid an improper payment (kickback).

A spokesman for the Inspector General’s office declined to comment.

Pfizer's drugs treat transthyretin amyloid cardiomyopathy, which causes the heart to tighten and hinder its ability to pump blood. The condition can cause progressive heart failure and death if left untreated.

Although the US Food and Drug Administration approved the two drugs in May 2019, which are also known as tafamidis and which Pfizer called a possible blockbuster, the New York-based drugmaker has attracted criticism for their costs.

A February study by the American Heart Association said that tafamidis was the most expensive cardiovascular drug launched in the United States, and its long-term cost-effectiveness was uncertain.

In a complaint filed at the federal court in Manhattan, Pfizer said its intention is not to “corrupt” doctors through incentives to prescribe their drugs more often but to ensure that patients receive the necessary treatment.

This is a matter of paramount importance for the entire health care sector, as the outcome may dramatically impact a variety of industries that could be ordered to cover co-payments to subsidize patients who cannot afford their share of the product offered by Medicare.

Some companies in the industry have made donations to patient associations, which help their members with the co-payments required by Medicare. However, the issue goes beyond the realm of philanthropy when such a donation carries the condition that it be used only for the company's products, as it becomes evident that the company aims to make its product commercially viable.

In filing such an action, Pfizer makes a bold decision to make this discussion public: whether it is legal or not for a company to make the co-payment required by Medicare feasible, to make the sale of its product viable. In practice, it would be akin to companies that work with discount coupons to expand their sales.

Indeed, Pfizer will face three challenging issues:

If Pfizer can afford the patient's co-payment, it can sell its medicine at a more affordable price.

The conflict of interest entailed in paying for the patient's co-payment is inevitable, as it effectively reduces the value of their medicine by half; nevertheless, its profit margin proves to be sufficient to make such an initiative feasible. And ultimately, it is the US government that should bear such an expense.

The False Claims Act and the Anti-Kickback Statute prohibit such practices if, in the end, the government is to be burdened by them.

On the other hand, Pfizer also has three arguments in its favor:

It is not bribing doctors to increase prescription numbers or government agents to increase sales to the government improperly.

It helps a large number of patients who would otherwise not be able to afford, even in part, their treatment.

Its large investments in research, particularly in rare diseases, where the number of patients affected is infinitely smaller, justifies its medicine's high market value.  After all, the company needs to recover its investment, generate profit for shareholders (who might otherwise direct their investments towards other companies), and generate the financial resources to reinvest in new research. Indeed, drugmakers treat many diseases, such as influenza, AIDS, hepatitis C, which otherwise would be ravaging people even today.

The fact is that Pfizer's initiative is going to be followed very carefully by the entire sector, as it has the potential to become a game-changer in this context, depending on the decision taken by the American courts.

And indeed, it is a precedent that could become a worldwide reference, where there is the practice of co-payment, as, for example, in the case of Brazil, in which healthcare plans require co-payment in some circumstances.