Big Pharma’s Drug Assistance Programs: Harmless Charity?

Rising at double-digit percentage rates each year, prescription drug costs are the fastest-growing health care expense in the U.S.[1] The rising drug cost problem is compounded by the fact that tens of millions of Americans remain uninsured or underinsured — and thus unable to afford their needed prescription medications — despite the Affordable Care Act of 2010. Due to steep drug prices and lack of health insurance coverage, patients often skip doses of their medications or even forgo filling needed prescriptions.[2] This can lead to preventable complications and unnecessary hospitalizations, which can add up to far more than the price of the unfilled prescriptions.[3] These unhealthy consequences cost the U.S. health care system up to $100 billion per year.[4]

Drug companies’ patient assistance programs (PAPs) are marketed by the pharmaceutical industry as a goodwill solution to alleviate patients’ prescription drug price burden. Indeed, these programs appear to be charitable, as they do offset drug costs for eligible patients — often on generous terms. But how helpful are these programs in improving overall drug access and affordability, and do they negatively impact overall health care expenditures in the U.S.?

What do PAPs have to offer?

PAPs are drug assistance programs that enable certain patients to obtain expensive prescription medications at little or no cost. They are offered voluntarily by nearly all large pharmaceutical companies.[5] Most PAPs cover a single drug or a few of the company’s most expensive brand-name specialty medications, such as treatments for autoimmune diseases or cancers. (See table, this page, for examples of these top-selling specialty drugs.) Some companies offer PAPs for generic drugs as well.

According to the Partnership for Prescription Assistance, a program established by the pharmaceutical industry to match patients with PAPs, there are currently 475 PAPs covering more than 2,500 prescription drugs.[6]

Each PAP has its unique benefit structure and eligibility requirements.[7] Many programs seem to target only patients who have exhausted other options and have no insurance or personal resources to cover the cost of their medications.[8] However, other programs have widely variable or no income limits[9] or requirements[10].

Top-Selling Drugs Featured Under PAPs[11]

Patients can apply for a PAP-covered drug directly, via the sponsoring pharmaceutical company; through informational websites, such as RxAssist.org, NeedyMeds.org or RxHope.com; or through foundations, such as the Max Foundation. PAP applications, which are free, can be initiated by patients; a health care provider, such as a physician or nurse practitioner; or a social worker.

Impact of PAPs

PAPs are indeed an important drug resource for some eligible patients, as they provide prescription drugs to individuals who otherwise might be denied needed drug therapy. The Partnership for Prescription Assistance reported that PAPs have provided prescription drugs for approximately 9 million patients since the partnership was launched nine years ago.[12]

However, putting this number into perspective, PAPs have served a small proportion of patients. There are over 41 million Americans without health insurance,[13] and an additional 13 percent of Americans between the ages of 19 and 64 spend 10 percent or more of their incomes on out-of-pocket health care costs.[14] Surely, these populations could benefit from programs that provide better coverage for prescription drugs.

Similarly, the $4 billion per year that the pharmaceutical industry spends on these programs[15] is a very small amount compared to the $347 billion in annual drug sales for the industry in the U.S.[16]

Despite the benefits that PAPs offer to certain needy patients, these programs have adverse effects on health care expenditures more broadly. By removing the cost barrier for covered medications — which are often expensive specialty drugs — PAPs steer patients toward these drugs, even when other equally effective and less costly alternatives are available.[17] If patients eventually obtain better prescription drug coverage, they will likely request continued treatment with unnecessarily expensive medications.[18] Even if patients decide to switch to a non-PAP-covered and less expensive drug, this switching is not without costs;[19] patients may be required to make additional physician visits and undergo additional laboratory tests to be stabilized on the new drug. Physicians who treat patients who use PAPs also may become accustomed to prescribing expensive PAP products rather than the generally less expensive alternatives, including generic products.[20] Therefore, to the extent that PAPs influence health care provider prescribing practices for patients with prescription drug insurance, overall health system costs increase.

In the end, all of these factors may enable pharmaceutical companies to inflate the prices of these drugs for other patients. Those paying out of pocket will pay more, and those who are insured will see increases in their insurance premiums, deductibles and copayments.

Not a long-term solution

Until a more comprehensive solution to our nation’s prescription drug affordability problem becomes available, PAPs will likely continue to provide a short-term fix for some consumers struggling with higher drug prices. Ideally, the adoption of a single-payer health care system would eliminate the need for PAPs by making health insurance affordable for all Americans regardless of income levels and other factors. A single-payer health care system also would make it easier for the federal government to negotiate drug prices with the pharmaceutical industry.

The best way to lower costs and improve patient access to medication is more aggressive regulation of drug prices. Along these lines, a bill introduced in the Senate in January would require the secretary of Health and Human Services to negotiate prices for drugs covered under Part D of Medicare.

References

[1] Duke KS, Raube K, Lipton HL. Patient-assistance programs: Assessment of and use by safety-net clinics. American Journal of Health-System Pharmacy. 2005;62(7):726-731.

[2] Chu CF, Lal LS, Felder TM, et al. Evaluation of patient assistance program eligibility and availability for top 200 brand name and generic drugs in the United States. University of Minnesota, College of Pharmacy. 2012. Retrieved from the University of Minnesota Digital Conservancy, http://purl.umn.edu/122764. Accessed December 14, 2014.

[3] Goldman DP, Joyce GF, Zheng Y. Prescription drug cost sharing: associations with medication and medical utilization and spending and health. JAMA. 2014;298(1): 61-69.

[4] Chu CF, Lal LS, Felder TM, et al. Evaluation of patient assistance program eligibility and availability for top 200 brand name and generic drugs in the United States. University of Minnesota, College of Pharmacy. 2012. Retrieved from the University of Minnesota Digital Conservancy, http://purl.umn.edu/122764. Accessed December 14, 2014.

[5] Directory of PhRMA Member Company Patient Assistance Programs. https://www.pparx.org/sites/default/files/PPA-Member-Directory.pdf. Accessed December 16, 2014.

[6] The Partnership for Prescription Assistance. https://www.pparx.org. Accessed December 17, 2014.

[7] Chu CF, Lal LS, Felder TM, et al. Evaluation of patient assistance program eligibility and availability for top 200 brand name and generic drugs in the United States. University of Minnesota, College of Pharmacy. 2012. Retrieved from the University of Minnesota Digital Conservancy, http://purl.umn.edu/122764. Accessed December 14, 2014.

[8] Duke KS, Raube K, Lipton HL. Patient-assistance programs: Assessment of and use by safety-net clinics. American Journal of Health-System Pharmacy. 2005;62(7):726-731.

[9] Howard DH. Drug companies' patient-assistance programs— helping patients or profits? New England Journal of Medicine. 2014;371(2):97-99.

[10] Choudhry NK, Lee JL, Agnew-Blais J, et al. Drug company–sponsored patient assistance programs: A viable safety net? Health Affairs. 2009;28(3):827-834.

[11] Howard DH. Drug companies' patient-assistance programs— helping patients or profits? New England Journal of Medicine. 2014;371(2):97-99.

[12] https://www.pparx.org. Accessed December 17, 2014.

[13] The Kaiser Permanente Commission on Medicaid and the Uninsured. Key Facts about the Uninsured Population. October 2014 Fact Sheet. http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population. Accessed December 16, 2014.

[14] Collins SR, Rasmussen PW, Doty MM, et al. Tracking Trends in Health Care Performance. The Commonwealth Fund. 2014. http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2014/nov/1784_collins_too_high_a_price_out_of_pocket_tb_v2.pdf. Accessed December 17, 2014.

[15] Visante. 2011. How Copay Coupons Could Raise Prescription Drug Costs by $32 Billion Over the Next Decade. http://www.rxobserver.com/wp-content/uploads/2012/06/visante3.pdf. Accessed December 14, 2014.

[16] IMS Health Market Prognosis, May 2012. http://www.imshealth.com/deployedfiles/ims/Global/Content/Corporate/Press%20Room/Top-Line%20Market%20Data%20&%20Trends/2011%20Top-line%20Market%20Data/Regional_Pharma_Market_by_Spending_2011-2016.pdf. Accessed December 17, 2014.

[17] Choudhry NK, Lee JL, Agnew-Blais J, et al. Drug company–sponsored patient assistance programs: A viable safety net? Health Affairs. 2009;28(3):827-834.

[18] Ibid.

[19] Carroll NV. Pharmaceutical patient assistance programs: Don't Look a gift horse in the mouth or there's no such thing as a free lunch. Journal of Managed Care Pharmacy. 2007;13(7):614-616.

[20] Ibid.