(Bloomberg) — GlaxoSmithKline P.L.C. and Merck & Co. are holding off on helping low-income enrollees in the new “qualified health plans” (QHPs) pay for high-priced drugs.
The drugmakers say they won’t provide the assistance until the government decides whether the QHPs are subject to federal laws banning kickbacks that steer business to private companies.
The U.S. Department of Health and Human Services (HHS) and an HHS agency, the Centers for Medicare & Medicaid Services (CMS), created the confusion last fall.
In an Oct. 30 letter, HHS Secretary Kathleen Sebelius said her department doesn’t consider the QHPs to be federal programs. Presumably, that would make it legal for drugmakers to help with patient co-payments.
In another memo, issued Nov. 4, CMS said of “third-party payments” that it “discourages this practice and encourages issuers to reject such third-party payments.”
Since then, the government has issued no more guidance on the matter.
The Pharmaceutical Research and Manufacturers of America (PhRMA) has advised drugmakers to offer aid programs to QHP enrollees.
“I have a real hard time, just as a conceptual model, thinking the help you give a patient could be viewed as a kickback,” said Mit Spears, PhRMA’s general counsel.
But Spears agreed that there’s confusion about the anti-kickback rules.
Merck and Glaxo have continued to offer assistance programs for uninsured patients and patients with ordinary, non-QHP commercial health coverage.
Merck is the world’s fifth-largest drugmaker by market capitalization, while Glaxo is the seventh-biggest.
Merck wants to offer assistance to QHP enrollees who need help with co-pays, but it won’t, for now, because of “the uncertainty surrounding the rollout of the Affordable Care Act,” said Kelley Dougherty, a Merck spokeswoman. “Merck plans to revisit this decision once more information is available.”
Glaxo also won’t provide assistance to QHP enrollees at this time, Emily Beamer, a company spokeswoman, said in an e-mail.
Some companies — including Novartis AG, Sanofi, Eli Lilly & Co., Gilead Sciences Inc., Johnson & Johnson and Amgen Inc. – said they will offer assistance programs for QHP enrollees.
J&J is offering the financial help because “we believe that decision is supported” by Sebelius’s letter, said Mark Wolfe, a J&J spokesman.
Pfizer Inc., the world’s fourth-largest, and AbbVie Inc. declined to disclose what they’re doing.
The uncertainty, an unintended consequence of the Patient Protection and Affordable Care Act (PPACA), may mean arbitrary hardship for the low-income patients who need help the most, said Nancy Davenport-Ennis, chairwoman of the National Patient Advocate Foundation.
Historically, drugmakers have used coupons and debit cards to encourage the use of high-priced medicines rather than the less expensive older treatments and generics often preferred by insurers.
Insurers often use high co-pays for brand-name drugs to get patients to use the cheaper drugs.
For consumers who get individual or small-group coverage, either on or off the new PPACA public exchange system, PPACA now caps total out-of-pocket costs for in-network, covered medical treatment at $6,350 for an individual and $12,700 for a family.