A medical charity that received hundreds of millions of dollars from pharmaceutical companies lost a crucial stamp of approval from the U.S. government after being accused of allowing its donors to have potentially improper influence over how the nonprofit was run.
For the past decade, Caring Voice Coalition has been one of the biggest patient-assistance charities in the United States. The Mechanicsville, Va.-based foundation helps patients afford expensive drugs by paying health insurance co-payments that can otherwise total more than $10,000 a year.
The foundation had another effect, according to a redacted letter from the Department of Health and Human Services' inspector general's office. It provided drugmakers with data that could help them see whether their contributions were helping their own customers, potentially giving the companies "greater ability to raise the prices of their drugs while insulating patients from the immediate out-of-pocket effects" and letting Medicare pay for the cost increases, according to the inspector general's letter, which was posted on the Health and Human Services Department's website.
Caring Voice confirmed it was the recipient of the letter, in which the inspector general said the charity "may cease operations."
"Our board of directors is evaluating this very serious matter and will determine the most appropriate path forward," Gregory Smiley, chief executive officer of Caring Voice, said in an email. "We are very disappointed to receive this news, particularly given the work we have undertaken over the past six months, including dramatic leadership and comprehensive policy overhauls."
Pharmaceutical companies increased their donations to co-pay charities in recent years, often in tandem with large increases in the prices of drugs. Under federal law, drug companies can't give direct co-pay help to patients covered by Medicare -- which would be considered an illegal kickback because it could steer patients to one drug or another. Instead, they're permitted to donate to independent charities that help Medicare patients, provided the companies don't exert sway over how the nonprofits operate.
The findings are similar to reporting by Bloomberg Businessweek from May 2016 that Caring Voice gave preferential treatment to patients of some company donors.
Business on 11/30/2017