Financial Eligibility Criteria and Medication Coverage for Independent Charity Patient Assistance Programs

Key Points

Question

What are the characteristics of independent charity patient assistance programs?

Findings

In this cross-sectional study of 6 independent charity organizations that included 274 patient assistance programs in 2018, 97% of the programs excluded uninsured patients, and the most common income eligibility limit was 500% of the federal income poverty level. In the drug-level analysis, the median 2016 Medicare Part D spending per beneficiary was $1157 for medications covered by these programs compared with $367 for the medications not covered.

Meaning

The majority of independent charity patient assistance programs in this study did not cover uninsured patients and were more likely to cover more expensive medications.

Abstract

Importance

Although independent charity patient assistance programs improve patient access to costly prescription drugs, recent federal investigations have raised questions about their potential to increase pharmaceutical spending and to violate the federal Anti-Kickback Statute. Little is known about the design of the programs, patient eligibility, or drug coverage.

Objective

To examine the eligibility criteria of the independent charity patient assistance programs and the drugs covered by them.

Design, Setting, and Participants

Descriptive cross-sectional study of the 6 largest independent charities offering patient assistance programs for patients including, but not limited to, Medicare beneficiaries in 2018. These charities offered 274 different disease-specific patient assistance programs. Drugs were identified for subgroup analysis that had any use reported on the Medicare Part D spending dashboard and any off-patent brand-name drugs that incurred more than $10 000 in Medicare spending per beneficiary in 2016.

Exposures

Support by independent charity patient assistance programs.

Main Outcomes and Measures

The primary outcomes were the characteristics of patient assistance programs, including assistance type, insurance coverage (vs uninsured), and income eligibility. The secondary outcomes were the cost of the drugs covered by the patient assistance programs and the coverage of expensive off-patent brand-name drugs vs substitutable generic drugs.

Results

Among the 6 independent charity foundations included in the analysis, their total revenue in 2017 ranged from $24 million to $532 million, and expenditures on patient assistance programs ranged from $24 million to $353 million, representing on average, 86% of their revenue. Of the 274 patient assistance programs offered by these organizations, 168 (61%) provided only co-payment assistance, and the most common therapeutic area covered was cancer or cancer treatment–related symptoms (113 patient assistance programs; 41%). A total of 267 programs (97%) required insurance coverage as an eligibility criterion (ie, excluded uninsured patients). The most common income eligibility limit was 500% of the federal poverty level. The median annual cost of the drugs per beneficiary covered by the programs was $1157 (interquartile range, $247-$5609) compared with $367 (interquartile range, $100-$1500) for the noncovered drugs. Off-patent brand-name drugs (cost: >$10 000) were covered by a mean of 3.1 (SD, 2.0) patient assistance programs, whereas their generic equivalents were covered by a mean of 1.2 (SD, 1.0) patient assistance programs.

Conclusions and Relevance

In 2018, among 274 patient assistance programs operated by the 6 independent charity foundations, the majority did not provide coverage for uninsured patients. Medications that were covered by the patient assistance programs were generally more expensive than those that were not covered.

This study characterizes assistance types, disease areas, insurance and income requirements, patient eligibility criteria, and drugs covered by the 6 largest independent charity patient assistance programs in 2018.

Introduction

Patient assistance programs help patients afford prescription drugs by subsidizing their out-of-pocket costs. Federal health programs, including Medicare, prohibit the use of manufacturer-sponsored drug-specific patient assistance programs due to the federal Anti-Kickback Statute that forbids manufacturers from offering any remuneration for a federally reimbursable item.¹ However, federal health programs allow patients to participate in disease-specific independent charity patient assistance programs based on the assumption that these programs do not violate anti-kickback laws.² Pharmaceutical companies may make tax-deductible donations to these disease-specific funds.

Independent charity patient assistance programs have grown rapidly since the enactment of the Medicare Modernization Act of 2003, which became effective in 2006. Between 2007 and 2016, the total amount of patient assistance granted by the 5 largest independent charities increased by 588%.^3,4 Independent charity patient assistance programs must observe legal constraints on their program design and distribution of funds, and remain independent regardless of the source of their revenue.⁵

However, 7 pharmaceutical companies paid multimillion-dollar settlements between 2017 and 2019 to the Department of Justice for allegedly requiring some independent charities to design patient assistance programs that restricted benefits to only those companies’ drugs.^6,7,8,9 These settlements have further prompted anti-kickback concerns within the context of patient assistance programs. Researchers have discussed the profit motives behind the charitable donations made to patient assistance programs,^3,10 examined patient assistance programs in limited settings,^11,12,13 and studied manufacturer-sponsored programs.¹⁴ However, little is known about independent charity patient assistance programs and the financial support they provide.

This study examined independent charity patient assistance programs operated by 6 foundations that have the largest revenue contribution to the programs and disclosed program details. This study also assessed the characteristics of the patient assistance programs and their medication coverage; specifically, how covered vs uncovered drugs varied in terms of the price and coverage of brand-name drugs vs their generic equivalents.

Methods

The institutional review board at Johns Hopkins University, Bloomberg School of Public Health, provided an exemption for this study.

Sample Identification

Because there is no central database of patient assistance programs or an existing systematic study, the GuideStar nonprofit organization database was searched for 501(c)(3) charities that had annual revenues of at least $10 million in 2017 and National Taxonomy of Exempt Entities codes in category E (health care) or G (voluntary health associations and medical disciplines). To identify independent charity foundations offering patient assistance programs, the following keywords were used: patient assistance, financial assistance, prescription (drug) assistance, co(-)pay(ment), and charitable assistance. This query returned 222 nonprofit organizations. Foundations and organizations were excluded if access was restricted to local members in specific regions along with entities that did not provide monetary support for prescription medications, such as manufacturer-sponsored foundations, advocacy organizations, hospitals, and community health systems. The Caring Voice Coalition also was excluded because it discontinued its patient assistance programs due to recent federal anti-kickback allegations. This selection strategy identified 8 nonprofit, independent charity organizations that offer monetary assistance to patients to cover their prescription drug costs.

The following 4 criteria were used to identify independent charity organizations or foundations that operate patient assistance programs and were suitable for the empirical analysis: (1) allocate more than 50% of its revenue for patient assistance programs; (2) disclose the patient eligibility criteria for patient assistance programs; (3) disclose the names of covered medications and associated funding amounts for disease-specific patient assistance programs; and (4) appear on the Medicare patient assistance program website. From their websites, we reviewed each organization’s latest annual reports and collected details of the patient assistance programs offered by the charities.^15,16

We identified Medicare Part D drugs covered by 2 specific foundations that were listed on the Medicare website and had reported drug use data on the Medicare Part D spending dashboard for 2016.¹⁷ For each drug, we obtained the Medicare Part D spending per beneficiary in 2016 from the Medicare Part D spending dashboard and calculated the mean out-of-pocket cost per beneficiary using Medicare Prescription Drug Event data. To obtain the out-of-pocket cost per beneficiary, we used the total amount paid by the beneficiary, which excludes the amount paid by the Medicare Part D low-income subsidy and other third-party payers such as group health plans and governmental programs (eg, the US Department of Veterans Affairs).¹⁸

To identify specialty drugs, we used the threshold for the Medicare Part D specialty tier defined by the Centers for Medicare & Medicaid Services as monthly spending greater than $600 per beneficiary in 2016.¹⁹ From the list of specialty drugs, we then identified off-patent drugs that incurred costs of greater than $10 000 per beneficiary in Medicare spending in 2016 that had generic equivalents available on the market as of December 2018.²⁰

Outcomes

We examined the assistance type (eg, co-payment reimbursement or subsidy of health insurance premium), disease areas, health insurance requirements, income eligibility, number of drugs covered by a patient assistance program, and maximum annual amount provided by an independent charity patient assistance program.

The median 2016 spending for Medicare Part D drugs covered by patient assistance programs was compared with Medicare Part D drugs not covered by the programs. For the drugs that were covered by patient assistance programs, we also studied the coverage of patients’ out-of-pocket costs and compared it with total Medicare spending per drug per beneficiary. The Medicare Part D drugs were grouped based on 2016 spending per beneficiary and we examined the proportion of total drugs in each group covered by independent charity patient assistance programs.

In addition, we analyzed Medicare Part D off-patent brand-name drugs covered by independent charity patient assistance programs with costs of greater than $10 000 per beneficiary in 2016. We also examined the number of patient assistance programs covering brand-name drugs and their generic equivalents.

Data Analysis

Descriptive statistics were used to characterize independent charities offering patient assistance programs, and the features and drugs covered by these programs. Means were used to report normally distributed data, medians for data that are not normally distributed, and proportions as appropriate. Excel version 15.24 (Microsoft) was used for all the analyses.

Results

Among the 8 independent charity organizations that offer monetary assistance to patients and had annual revenues of at least $10 million in 2017, only 2 organizations (the Patient Access Network [PAN] Foundation and the HealthWell Foundation) met all 4 criteria used to determine suitability for the empirical analysis. These 2 foundations were the only ones listed on the Medicare website, which also identifies drugs covered by the patient assistance programs.²¹ The other 6 foundations or organizations did not meet at least 1 criterion used to determine suitability for the empirical analysis. The National Organization of Rare Disorders and the Assistance Fund did not disclose sufficient data for the analysis, and the other 4 organizations did not disclose the names of the covered drugs or the funding amount.

The PAN Foundation and the HealthWell Foundation met all 4 criteria and made up the empirical analysis sample. In aggregate, the 2 foundations accounted for 50% of the total spending represented by the 8 independent charity organizations in the broader sample that appears in Table 1. Four organizations (CancerCare Co-Payment Assistance Foundation, Good Days, Patient Advocate Foundation Co-Pay Relief, and Patient Services Incorporated) disclosed the patient eligibility criteria for the patient assistance programs, but did not disclose the specific drugs and amount of funding they provide. Six organizations (CancerCare Co-Payment Assistance Foundation, Good Days, the HealthWell Foundation, the PAN Foundation, the Patient Advocate Foundation Co-Pay Relief, and Patient Services Incorporated) were included in the analysis on characteristics of the patient assistance programs (Table 2).

Table 1. Characteristics of Major Independent Charity Foundations Offering Patient Assistance Programs.

Profile of Independent Charity Foundation					Type of Information Disclosure
Name	Year Established	Total Revenue in Millions, $a	Patient Assistance Expense in Millions, $a	Expense Ratio, %a,b	Disclosure Description of Donorsa	Patient Eligibility Available?	Names of Drugs and Funding Amount Covered Available?	Listed on Medicare Patient Assistance Program Website?
Included in Empirical Analysis
HealthWell Foundation	2003	359	353	98	Partial disclosurec	Yes	Yes	Yes
Patient Access Network Foundation	2004	532	348	65	Not available	Yes	Yes	Yes
Excluded From Empirical Analysis
Good Days	2005	180	250	139	Not available	Yes	No	No
Patient Advocate Foundation Co-Pay Relief	2004	225	183	81	Names only	Yes	No	No
Patient Services Incorporated	1989	119	93	78	Names only	Yes	No	No
CancerCare Co-Payment Assistance Foundation	2008	24	24	100	Names by the level of funding	Yes	No	No
National Organization for Rare Disorders	1983	48	25	52	Not available	No	No	No
The Assistance Fund	2009	164	120	73	Not available	No	No	No

^aData are from 2017 annual reports and each organization’s form 990.

^bCalculated as patient assistance expense divided by total revenue.

^cDisclosed the names of only noncorporate sponsors.

Table 2. Characteristics of Patient Assistance Programs Offered by 6 Independent Charity Foundations^a.

Characteristics	Patient Assistance Programs (N = 274)
Assistance type, No. (%)
Co-pay only	168 (61)
Co-pay or insurance premium (patient’s choice)	90 (33)
Insurance premium only	9 (3)
Unknown	7 (3)
Therapeutic areas, No. (%)
Cancer or cancer treatment–related symptom	113 (41)
Genetic or rare disease22	93 (34)
Autoimmune disease	13 (5)
Cardiovascular, central nervous system, or infectious disease	22 (8)
Otherb	33 (12)
Health insurance requirement, No. (%)	267 (97)
Income eligibility limit defined by the FPL, No. (%)23
300%c	8 (3)
400%d	119 (43)
500%e	140 (51)
600%f	7 (3)
Annual maximum assistance amount
No. of programsg	163
Mean (SD), $	5825 (4069)

Abbreviation: FPL, federal poverty level.

^aIncludes patient assistance programs run by the CancerCare Co-Payment Assistance Foundation, Good Days, the HealthWell Foundation, the Patient Access Network Foundation, the Patient Advocate Foundation Co-Pay Relief, and Patient Services Incorporated. Data are from a 2018 survey of independent charity patient assistance programs conducted by the authors.

^bIncludes diabetic foot ulcers, atopic dermatitis, macular diseases, anemia associated with chronic renal failure, venous leg ulcers, chronic pain, osteoporosis, ulcerative colitis, retinal diseases, electrolyte imbalance, movement disorders, iron overload, pulmonary fibrosis, immunosuppressive treatment for organ transplant recipients, etc.

^cDefined as $36 420 for an individual and $75 300 for a family of 4.

^dDefined as $48 560 for an individual and $100 400 for a family of 4.

^eDefined as $60 700 for an individual and $125 500 for a family of 4.

^fDefined as $72 840 for an individual and $150 600 for a family of 4.

^gOnly 163 programs disclosed the maximum assistance amount.

Characteristics of Independent Charities Offering Patient Assistance Programs

The characteristics of the 8 independent charity foundations that offered patient assistance programs and reported annual revenue of more than $10 million in 2017 appear in Table 1. Six of the 8 organizations were established during or after 2003. Among the 6 independent charity foundations included in the analysis, their total revenue in 2017 ranged from $24 million to $532 million, and expenditures on patient assistance programs ranged from $24 million to $353 million, representing on average, 86% of their revenue. The disclosure practices of these organizations varied. Only the PAN Foundation and the HealthWell Foundation disclosed the names of drugs, the dollar amount of maximum annual assistance they cover, and the patient eligibility criteria. The CancerCare Co-Payment Assistance Foundation was the only organization that disclosed its corporate donors (6 of its 7 donors that contributed >$1 million in 2017 were pharmaceutical companies).

Features of Patient Assistance Programs

The characteristics of the 274 independent charity patient assistance programs that disclosed patient eligibility criteria and were operated by the 6 independent charity foundations appear in Table 2. The patient assistance programs covered medications for a wide variety of diseases as of December 2018. The financial support offered by the patient assistance programs took several forms. There were 168 patient assistance programs (61%) that provided only co-payment assistance, 9 programs (3%) offered only assistance to subsidize the cost of health insurance premiums, and 90 programs (33%) allowed patients to choose between co-pay and insurance premium assistance. None of the patient assistance programs offered free drugs. The most common therapeutic areas covered were cancer or cancer treatment–related symptoms (113 programs; 41%) and genetic or rare diseases (93 programs; 34%).

Eligibility for all of the patient assistance programs was based on the following criteria: annual household income measured by the federal poverty level (FPL) guidelines, insurance status, physician endorsement, prescription information, and proof of receiving treatment in the United States. Of the patient assistance programs, 267 (97%) required insurance coverage as an eligibility criterion and 259 (94%) used 400% or 500% of the FPL as their income eligibility limit.

The independent charity foundations varied the FPL income eligibility limits across different patient assistance programs. For example, the HealthWell Foundation used 400% of the FPL as the income eligibility limit for patient assistance programs offering $25 000 as the maximum annual assistance, but used 500% of the FPL for patient assistance programs offering $2500 as the maximum annual assistance. Similarly, the PAN Foundation used 400% of the FPL as the income eligibility limit for patient assistance programs offering $12 000 as the maximum annual assistance, but used 500% of the FPL for patient assistance programs offering $800 as the maximum annual assistance.

Drugs Covered by Patient Assistance Programs

We also examined the characteristics of the 123 patient assistance programs offered by the 2 foundations (PAN and HealthWell) with data that permitted drug-level analysis. These foundations were the only ones listed on the Medicare patient assistance program website (Table 1). Of the 123 patient assistance programs offered by the 2 foundations, 100% required patients to have insurance and 99.2% used 400% or 500% of the FPL as their income eligibility limit (eTable in the Supplement). The characteristics of the 123 patient assistance programs offered by these 2 foundations (eTable in the Supplement) were similar to those reported in Table 2. The characteristics of the patient assistance programs offered by the PAN and the HealthWell foundations were included in both the eTable in the Supplement and in Table 2.

Among the 2828 Medicare Part D drugs listed on the Medicare spending dashboard, 1156 (41%) were covered by at least 1 of the 123 independent charity patient assistance programs offered by the PAN and HealthWell foundations and the remaining 1672 (59%) were not covered. The median 2016 Medicare Part D spending per beneficiary on drugs covered by 123 patient assistance programs was $1157 (interquartile range [IQR], $247-$5609), which was 315% of the median spending for drugs that were not covered ($367; IQR, $100-$1500). The maximum level of annual assistance available was sufficient to cover the mean Medicare beneficiary’s out-of-pocket cost for 1152 of the 1156 drugs (99.7%). There was no information available to determine how often the maximum level was provided.

The median number of drugs covered by a disease-specific patient assistance program was 20 (IQR, 6-32). Drugs produced by a single manufacturer had a higher median number that were covered by patient assistance programs (13 [IQR, 5-25] drugs) compared with drugs produced by multiple manufacturers (6 [IQR, 3-11] drugs). The maximum annual assistance amount varied by patient assistance program and ranged from a low of $500 (for drugs to treat postmenopausal osteoporosis from the PAN Foundation) to a high of $30 000 (for drugs to treat hepatitis C from the HealthWell Foundation), with a mean patient assistance amount of $7283 (SD, $4801).

There was a monotonic relationship between the annual cost of the drug and the likelihood that the drug was included in a patient assistance program (Table 3). Based on 2016 Medicare Part D spending per beneficiary, drugs were covered by at least 1 patient assistance program for 36% of nonspecialty drugs costing less than $7200, 52% of drugs costing between $7200 and $10 000, 73% of specialty drugs costing between $10 000 and $30 000, and 83% of specialty drugs costing more than $30 000.

Table 3. Distribution of Medicare Part D Spending per Beneficiary for Drugs Covered by 1 or More Independent Charity Patient Assistance Programs in 2018.

	Covered by ≥1 Patient Assistance Programs, No./Total No. (%)a
	Drugs Produced by a Single Manufacturerb	Drugs Produced by Multiple Manufacturersc	Total
Average annual Medicare Part D spending per drug per beneficiary in 2016, $
<7200	566/1654 (34)	324/808 (40)	890/2462 (36)
7200-10 000	31/58 (53)	1/3 (33)	32/61 (52)
10 000-30 000	93/125 (74)	3/6 (50)	96/131 (73)
>30 000	136/164 (83)	2/2 (100)	138/166 (83)

^aData are from the Medicare Part D spending dashboard.

^bThe majority were brand-name drugs, but some generic drugs were produced by a single manufacturer.

^cThe majority were generic drugs, but some brand-name drugs were produced by multiple manufacturers.

Patient Assistance Program Coverage of Brand-Name Drugs With Available Generic Equivalents

There were 38 Medicare Part D off-patent brand-name drugs with a generic equivalent available in 2018 that were covered by at least 1 of the 123 independent charity patient assistance programs (costing >$10 000 per beneficiary in 2016 Medicare spending). Among the 38 drugs, 6 did not have a patient assistance program covering the generic equivalents, 12 had fewer patient assistance programs covering the generic equivalents than the brand-name versions, and 20 had the same number of patient assistance programs covering the brand-name and generic versions.

Among 18 drugs, the brand-name versions (cost: >$10 000) were covered by a mean of 3.1 (SD, 2.0) patient assistance programs and their generic equivalents were covered by a mean of 1.2 (SD, 1.0) patient assistance programs. For example, there were 8 patient assistance programs covering Velcade, but only 1 patient assistance program covering its generic equivalent (bortezomib) (Table 4). Similarly, there were 4 patient assistance programs that covered Targretin (costs Medicare >$100 000/year per beneficiary), but only 2 patient assistance programs covered the generic equivalents (bexarotene; there are 4 generic equivalents on the market). Among the 18 drugs, 12 (67%) were in protected classes, which must be covered by all Medicare Part D plans (8 antineoplastics, 2 antiretrovirals, and 2 antipsychotics).

Table 4. Characteristics of Off-Patent Brand-Name Drugs Covered by Medicare Part D That Had Fewer Independent Charity Patient Assistance Programs Covering the Corresponding Generic Drugs^a.

Off-Patent Brand-Name Drug	Active Ingredients	Annual Mean Medicare Spending per Beneficiary, $	No. of Patient Assistance Programs Included in Empirical Analysis
			Brand-Name Drugs			Generic Drugs
			Total	PAN Foundation	HealthWell Foundation	Total	PAN Foundation	HealthWell Foundation
Sabril	Vigabatrin	172 251	1	1	0	0	0	0
Targretin	Bexarotene	108 112	4	2	2	2	2	0
Tasmar	Tolcapone	64 931	2	1	1	1	1	0
Zytiga	Abiraterone acetate	50 656	1	1	0	0	0	0
Treanda	Bendamustine hydrochloride	36 468	7	4	3	1	1	0
Velcade	Bortezomib	28 059	8	5	3	1	1	0
Vidaza	Azacitidine	24 057	4	1	3	3	1	2
Zyflo CR	Zileuton	20 990	3	0	3	1	1	0
Torisel	Temsirolimus	17 636	4	0	4	2	0	2
Ampyra	Dalfampridine	16 372	2	1	1	1	1	0
Sandostatin	Octreotide acetate	15 885	3	1	2	2	1	1
Zyflo	Zileuton	14 938	4	1	3	1	1	0
Miacalcin	Calcitonin-salmon	12 875	3	2	1	2	1	1
Abilify	Aripiprazole	11 765	1	1	0	0	0	0
Rilutek	Riluzole	11 548	3	0	3	1	1	0
Reyataz	Atazanavir	11 456	1	1	0	0	0	0
Lexiva	Fosamprenavir	11 111	1	1	0	0	0	0
Fusilev	Levoleucovorin	10 215	4	1	3	3	1	2
Total			56	24	32	21	13	8

Abbreviation: PAN, Patient Access Network.

^aData are from a 2018 survey of independent charity patient assistance programs conducted by the authors.

Discussion

This study found that 97% of the patient assistance programs offered by 6 independent charity foundations did not provide financial assistance to uninsured patients based on disclosed patient eligibility criteria. The programs were more likely to cover expensive specialty drugs and brand-name drugs than less-expensive brand-name drugs and generic equivalents. The other independent charity foundations did not disclose details of their patient assistance programs or donors.

For patients taking expensive drugs, some patient assistance programs may play an important part in defraying the cost of needed medications. These patients may have difficulty affording their medications when they do not have health insurance coverage for the drugs, when they are in the deductible phase of the benefit, or when they reach the coverage gap (the period in which they are required to pay a larger share of total drug costs). This is especially a problem for Medicare enrollees who are prescribed high-cost specialty drugs because most Medicare Part D plans charge higher coinsurance for these specialty drugs and there is no catastrophic cap in the Medicare program. Thus, out-of-pocket costs can reach thousands of dollars.²⁴ For this reason, independent charity foundations offering patient assistance programs to these patients are entitled to receive tax-deductible donations from pharmaceutical companies. However, the findings from this study suggest that several features of the programs may limit their usefulness to financially needy patients and bolster the use of expensive drugs.

The exclusion of uninsured patients from the eligibility criteria was a uniform pattern across patient assistance programs. Although the patient assistance programs covered Medicare patients, they also covered non-Medicare patients. The programs often featured the number of insured patients as an important performance metric.^25,26 Because covering an insured patient requires less money compared with covering an uninsured patient who needs the same drug, one possible explanation for excluding uninsured patients is that the programs attempted to use their limited funding to assist as many beneficiaries as possible. The study also found that 46% of the patient assistance programs provided insurance premium assistance, which by design is not applicable to uninsured patients. Taken together, enhancing patient assistance programs to include uninsured patients, who are likely to face greater affordability challenges than insured patients, may be an area for improvement.

The finding regarding preferential coverage of high-priced specialty and brand-name drugs over generic equivalents adds to a growing body of literature suggesting that co-payment assistance programs may motivate physicians and patients to choose treatment options with a lower out-of-pocket cost burden despite the higher total cost and the availability of lower-cost alternatives. Prior studies found that the co-payment coupons steered privately insured patients toward brand-name drugs and away from generic equivalents.^27,28,29,30 The current study extends this literature to patient assistance programs offered by independent charity foundations.

Greater use of high-cost specialty drugs has been found to be associated with an increase in out-of-pocket drug cost among Medicare Part D enrollees who do not receive the low-income subsidy.²⁴ By reimbursing patients for their entire out-of-pocket spending, patient assistance programs can desensitize beneficiaries to the total price of the drug and thus undermine the purpose of co-payments and coinsurance. This is of particular concern for the Medicare Part D program because patients taking more expensive drugs will progress more quickly to the catastrophic coverage phase when Medicare pays 80% of the cost of the drug.³¹ On that account, federal guidelines require independent charities to provide financial assistance for all medications approved by the US Food and Drug Administration including generic drugs and prohibit independent charity foundations from designing patient assistance programs that favor the use of expensive brand-name drugs. However, this study and recent anti-kickback allegations suggest the need for better monitoring and a compliance framework to ensure financial support for lower-cost alternatives in the programs.

Another finding of this study was the wide variation in disclosure practices across the patient assistance programs. This lack of transparency was an impediment for researchers accessing program details and donor information and assessing the role of patient assistance programs.¹⁴ The financial contributions from pharmaceutical companies are neither disclosed for most independent charity patient assistance programs, nor is the actual allocation of financial assistance across specific drugs.³² Given the increasing scale and scope of independent charity patient assistance programs, more transparency is needed to facilitate monitoring to ensure the activities of these programs are aligned with their charitable missions.

Limitations

This study has several limitations. First, no data were available regarding the size and profile of beneficiaries assisted by the independent charity patient assistance programs, the actual assistance dollar amounts disbursed to beneficiaries for specific drugs, or the amount of drug use that was induced by these programs. Therefore, the correlation between the actual use of the patient assistance programs with drug spending and drug use metrics cannot be assessed.

Second, how patient assistance programs make drug coverage decisions when they receive patient applications cannot be determined due to the lack of publicly available data. From this data set, we cannot determine whether a patient or drug is actually covered or not.

Third, the empirical analysis of drug use was limited to 2 foundations. It is possible that other charities that operate patient assistance programs have practices that are different from the 2 foundations examined.

Fourth, this study assumed that generic substitution was always possible (ie, both a brand-name and a generic version of a particular drug were available) and did not take into account physician and patient preference.

Conclusions

In 2018, among 274 patient assistance programs operated by the 6 independent charity foundations, the majority did not provide coverage for uninsured patients. Medications that were covered by the patient assistance programs were generally more expensive than those that were not covered.

Supplement.

eTable. Characteristics of 123 independent charity patient assistance programs offered by the empirical core sample