The Assistance Fund: The Donors Knew When the Fund Would Open

In The Assistance Fund copay settlement, the foundation agreed to pay $4 million to resolve allegations that it helped drug manufacturers pay kickbacks to Medicare patients through its multiple sclerosis fund. The government alleged that donations, fund openings and patient applications worked together to direct assistance toward the donors’ own drugs. For someone who handled renewal counts, application batches or donor communications, this pharmaceutical fraud case turns on familiar business decisions: how much money to request, when to open the fund and whose patients were ready to apply.

The Department of Justice announced the civil settlement on November 20, 2019. The Assistance Fund, based in Orlando, Florida, operated a fund ostensibly available to any Medicare patient with multiple sclerosis. The government alleged that it coordinated with Teva, Biogen and Novartis to favor patients taking those companies’ drugs.

What Is a Pharmaceutical Kickback?

A pharmaceutical kickback can be a payment meant to get a Medicare patient to buy a manufacturer’s drug, even when a charity passes it along. In this case, the alleged pharmaceutical kickbacks covered the patient’s share of the drug bill through a charity the manufacturers helped fund.

The Department of Justice explained that Congress included patient cost sharing partly to restrain health care costs. Its allegation against The Assistance Fund was that manufacturers used the foundation to remove that price pressure while minimizing the chance that their money would help patients taking competing drugs.

The USC Schaeffer Center’s 2020 white paper, The Association Between Drug Rebates and List Prices, found a positive association between rebates and list prices. It also described insured patients whose deductibles and coinsurance depend on list prices. That helps explain the commercial value of copay assistance: covering the patient’s share can remove a price obstacle to buying the drug. In the government’s account of this case, the manufacturers funded that help while steering it toward their own products.

A Broad Disease Fund Can Still Favor a Donor

The Assistance Fund’s multiple sclerosis fund covered several manufacturers’ products, but the government alleged that its operating practices directed assistance toward particular donors. The list of covered drugs included Teva’s Copaxone, Biogen’s Avonex and Tysabri, and Novartis’s Gilenya. The alleged preference emerged in the funding calculations and enrollment decisions.

The alleged copay charity kickbacks show how a broadly named fund could serve a donor’s commercial purpose through its opening hours.

How Do Pharmaceutical Kickbacks Work?

In The Assistance Fund’s case, the government alleged that a closed fund, no waiting list and coordinated reopening times let manufacturers steer assistance to their own patients. From 2011 through 2014, the multiple sclerosis fund frequently exhausted its funding and closed to new applicants.

According to the Department of Justice, the foundation kept no waiting list for patients who tried to apply during a closure. When another payment arrived, grants went to patients applying immediately after the fund reopened. The government said patients who had sought help while the fund was closed received no grants when it reopened.

That made advance knowledge of an opening commercially valuable. A vendor ready to submit a batch of applications could reach the fund before patients who had already sought help. The clock was part of the alleged selection process.

Teva’s Patient Counts and Batch Files

The government alleged that the foundation calculated requests to Teva around Copaxone patients already receiving assistance. Each December before the years 2011 through 2015, the foundation told Teva how much it needed to renew their grants for the coming year.

The calculation multiplied the number of Copaxone patients by the average grant, then added the foundation’s administrative fee. The annual requests ranged from over $18 million to over $30 million. The government alleged that the foundation understood Teva knew how it was calculating those requests. In that account, the donation request already contained a product-specific patient budget.

Later payments served new applicants. Teva allegedly made smaller payments during the year, typically less than $3 million each. Its vendor, Advanced Care Scripts, knew how many Copaxone patients were awaiting assistance. The foundation supplied the average grant amount. The government said Teva multiplied those inputs to decide how much to pay.

The alleged coordination continued after the payment. The foundation knew the pharmacy would immediately submit a batch file of Copaxone applications when the fund opened. Copaxone patients received a substantial majority of the grants during those openings, although the drug accounted for much less than a majority of the overall multiple sclerosis drug market.

The foundation also maintained a portal that gave the pharmacy real-time access to the enrollment status of patients it referred. The government alleged that this let the pharmacy update Teva on how many Copaxone patients had obtained grants. The donor could know both the number awaiting assistance and the number who received it.

The pharmacy’s own account adds weight to that description. In its separate settlement announced in August 2020, Advanced Care Scripts acknowledged relaying data from The Assistance Fund and Chronic Disease Fund to Teva so the manufacturer could correlate its payments with spending on Copaxone patients. The pharmacy also acknowledged sending application batches consisting almost entirely of Copaxone patients after funds reopened, then receiving notices that most or all had been approved.

Biogen’s Tysabri Applications

The government alleged that Biogen payments on May 24 and July 17, 2012 triggered openings coordinated around Tysabri patients. The foundation knew the pharmacy would immediately send batches of their applications after each opening. Tysabri patients then received a disproportionate share of the grants.

The addendum also described a foundation co-founder’s email to a Biogen vice president about the Tysabri project. According to the government, the email confirmed that Biogen’s money had successfully reached Tysabri patients through the fund.

Novartis and the Friday Evening Opening

The alleged Novartis arrangement fixed both a payment and an opening time. Novartis agreed to pay $1,418,000, and the foundation agreed to reopen the fund at 6:00 p.m. on Friday, December 14, 2012.

The government said the foundation knew Novartis had arranged for Express Scripts staff to work overtime that evening and the following morning, submitting Gilenya patients’ applications. According to the addendum, Express Scripts and the foundation called it their “12/15 Saturday project.”

After the fund closed the next day, the foundation confirmed that the opening had produced grants for 374 Gilenya patients and six patients taking other drugs, covering their Medicare copays for 2013. The fund covered multiple sclerosis, but the coordinated opening overwhelmingly served one manufacturer’s drug.

When Biogen Stopped Funding Renewals

The government also alleged that the donor relationship affected who could keep receiving assistance. In late 2013, the foundation learned that Biogen would stop supporting the fund for 2014. The foundation knew that Tysabri copays were significantly higher than those for the other drugs it covered.

The government alleged that those considerations led the foundation to decline renewal grants for a number of Tysabri patients. That preserved money for patients taking drugs from manufacturers, including Teva, that continued financing the fund. In the government’s account, a patient’s access to renewed help depended on whether the manufacturer kept paying.

Sanofi’s Separate Lemtrada Settlement

Sanofi’s manufacturer settlement, announced on February 28, 2020, concerned a separate alleged use of The Assistance Fund to cover Lemtrada copays. Sanofi agreed to pay $11.85 million in that civil resolution.

The government alleged that the foundation raised its maximum grant per patient to $20,000 specifically to accommodate Lemtrada patients. The same account described a fund that frequently closed when money ran out and kept no waiting list for applicants during those closures. Here the grant ceiling joined the opening schedule as a decision affecting which patients the fund could support.

A partnership formed by a former employee of Sanofi’s predecessor, Genzyme, brought the allegations through a whistleblower case.

From Free Medicine to a Medicare-Paid Prescription

A separate Incyte whistleblower complaint described the financial attraction of moving patients from free medicine to foundation assistance. It alleged that Incyte sought Medicare revenue from Jakafi prescriptions by changing how needy patients received support:

The complaint further alleged that Incyte received foundation data confirming that its contributions funded Jakafi patients’ copays. This parallel shows why patient-support decisions and donor reports belong in the same account of the money: assistance can change both the patient’s bill and whether Medicare receives a claim.

What the Assistance Fund Settlement Changed

The Assistance Fund’s settlement amount reflected its ability to pay after a review of its financial condition. The foundation also entered a three-year Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General requiring measures to preserve its independence and lawful interactions with manufacturer donors.

The agreement required compliance certifications from the foundation’s board and detailed reviews by an independent review organization.

The Records Behind the Opening Time

The evidence described in The Assistance Fund’s case crosses organizations: a renewal calculation at the foundation, a patient count at a vendor, a donor’s payment decision, an application batch and an enrollment confirmation. A finance employee may understand the grant calculation. A patient-support or pharmacy employee may know why applications were ready for a particular opening. Compliance staff may have seen the donor communications and board certifications.

Open Payments does not capture donations to copay foundations as payments to covered recipients, and it does not supply the prescription link. In this kind of case, the internal healthcare business records can show connections a public physician-payment search misses. We work with insiders to connect the funding decisions, patient applications and Medicare-paid prescriptions.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Fund Opened

If you worked inside a foundation, manufacturer or patient-support vendor and know how donations determined who received help, speak to one of our whistleblower experts about how the fund was steered. We build the case with you and bring in pharmaceutical kickback whistleblower lawyers who understand foundation funding and pharmacy operations. We stay beside you to turn your knowledge of the business into your strongest copay charity whistleblower case.