Pfizer copay program violates anti-kickback law, court rulings

A federal appeals court ruled on Monday that pharmaceutical company Pfizer has no right to pay out-of-pocket expenses for Medicare recipients on one of its drugs.

The Department of Health and Human Services previously announced that Pfizer’s proposed $225,000-a-year tafamidi co-pay program, also known as Vyndaqel and Vyndamax, was not permitted under federal kickback control law. Last year, a federal district court sided with the government.

The U.S. Court of Appeals for the 2nd Circuit also ruled that Pfizer’s efforts would not be legal under a law that prohibits drug makers from offering financial incentives to people in government health programs. Pfizer’s Direct Co-payment Program was designed to limit tafamidis participation to $35 per month for lower-income Medicare Part D members.

HHS has some leeway in enforcing the law and rejected Pfizer’s application in 2020. Pfizer has offered discounts to patients taking tafamidis, an orphan drug that treats a progressive heart disease called transthyretin amyloid cardiomyopathy, which affects about 150,000 older Americans. Tafamidis is the only drug approved by the Food and Drug Administration for this disease.

Pfizer argued that the rules barring drug companies from directly or indirectly covering costs are unconstitutional and so broad that they criminalize a wide range of activities, including people helping family members pay for health care.

Pfizer is disappointed that its appeal was unsuccessful, a company spokesman said in an email. “The Company continues to believe that providing co-payments to patients who are prescribed tafamidis will be a fair and effective way to reduce out-of-pocket costs and help ensure affordable access to this important drug,” the spokesperson wrote.

The AHIP Health Insurance Association supported this decision. “An anti-kickback statute is an important safeguard against the risk of fraud, waste and abuse that would otherwise allow drug manufacturers to subsidize upfront costs for patients to incentivize the purchase of their products,” AHIP said in a statement. “The courts have taken an important step to protect Americans from what would otherwise be an out-of-control multi-billion dollar price tag.”

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