Paying for drugs

[Guest guest]

The prices are disgraceful. Yesterday, my father went up to the pharmacy to

pick up 4, that's Four -- pills of an anti-nausea drug for me (Zofran) and I

had to pay $80.00 for it. Had I gone, I would have refused the script, but

since he paid for it and took it home to me, I cannot return it. I also have

been charged over $1,000.00 for my pain medication if I pick it up a day or two

early. I won't pay that, of course, so I try very hard to keep the medicine

down. (If I " lose " it due to intense nausea, I come up short at the end of the

month sometimes. I have to call every time I lose a dose, which is silly,

but if I don't want to get charged $1,000 I have to abide by their rules)

.. The reason I'm so concerned about getting off trial 106 is that even if

the HMO approves my Gleevec, I'll be charged the highest co-payment each month:

$80.00

I was wondering how I'm going to deal with all of this in the future. I do

know that if you keep your receipts, you can submit them to the LLS and they

have a fund set up for each person to reimburse some of your medical payments.

It was $500 when I was first diagnosed, but I think they have dropped it down

to $300? I have not submitted any receipts in a long time, because they keep

asking ME for donations to the LLS, so I feel rather guilty about using

their money. But if it comes to the point where I cannot afford all of these

copayments, I'll have to resort to that again.

Also, I think the American Cancer Society helps out paying for medical

expenses, travel, lodging, etc. It may not be a lot of money, but every little

bit

helps.

I found out last year when I was hospitalized for four days due to severe

pancreatitis, some hospitals have a fund for people who are in need. At that

time, my husband's employer had not yet submitted our insurance enrollment

and so there was a lapse of 5 days where we were not covered. It figures that

with my luck it was within that particular time-frame I was hosptialized! In

the end, hospital sent me a check for $300.00! I was astounded at their

generosity. I had Medicare so it picked up most of the stay and medications,

but

I had an ambulance bill that I used the money for payment. So there are ways

around some of the cost, but we really are at the mercy of compassionate

foundations and societies. - Lynne A.

[Guest guest]

Hello All,

Just in case anyone would like help in covering the cost of their drugs,

below is an article that ran in the Wall Street Journal. In reading through

it there is a name of a charity that has been set up to offer assistance.

Through Charities, Drug Makers Help Patients and Help Themselves

By Donating Money, Firms Keep Patients Insured And Medicine Prices High

By GEETA ANAND Staff Reporter of THE WALL STREET JOURNALDecember 1, 2005;

Page A1

Oliva hadn't paid much attention to her insurance plan's requirement

that she pay half the cost of prescription drugs. Then the cashier at

ShopRite told her she owed $636 for seven pills. s. Oliva, 60 years old, was

diagnosed with a rare type of brain tumor earlier this year. She was

prescribed a new drug to be taken in combination with radiation. The retail

price of a one-week supply of the pill, called Temodar, is $1,272.

..

<http://online.wsj.com/article/SB113210858490898540.html?mod=article-outset-

box> Drug Extends a Life, But at What Price?111/16/05 .

<http://online.wsj.com/article/SB113202332063297223.html?mod=article-outset-

box> How Drugs for Rare Diseases Became Lifeline for Companies211/15/05

Ms. Oliva, who earns about $40,000 a year managing a clothing store in Long

Beach Island, N.J., pulled out her American Express card that day in

September and paid, unsure where she was going to find the money for the

next week's supply. Fortunately, the nurse at her doctor's office found help

for her from a charity, Patient Services Inc., which picked up her drug

co-payments -- $3,800 for a six-week course of treatment.

The twist: The money for her co-payments came from Schering-Plough Corp.,

the drug's maker.

To cope with rising medical costs, insurers are requiring patients to pay

higher premiums and co-payments for drugs. While poor uninsured patients can

often get expensive medicine free from drug companies, people with insurance

are increasingly finding it difficult to afford these drugs. In response,

drug companies are giving money to charities that are specifically set up to

help patients pay such costs.

Under this support system, drug-company money keeps patients insured -- and

keeps insurers paying for the high-priced medicine.

" It's a win-win situation, " says Dana Kuhn, co-founder and president of

Patient Services, a Midlothian, Va., charity, which solicits money from drug

companies. " Patients are helped and companies are helped. They make a small

contribution to help the patient and get much more money back when the

insurer pays for the drug. "

Drug companies also often take a tax deduction for their donation.

But critics contend the arrangements unfairly let drug companies protect the

prices of their most-expensive medicines. " I don't want to discount the

legitimate help they provide to people in need, " says Howell, an

internist who serves as vice president of pharmacy affairs at Highmark Inc.,

a Blue Cross and Blue Shield company in Pittsburgh. " But it's really a

clumsy way for manufacturers to game the system so they can continue their

high pricing. "

The efforts, critics say, are a short-term fix that doesn't address the

underlying problem: the soaring cost of ultra-expensive drugs. They argue

that by paying patients' premiums or co-payments, drug companies are

shifting most of the price of these medicines to the patients' insurers, who

in turn spread the cost onto the other people they cover. " This is not a

sustainable level of spending, " says Alan Garber, chairman of the Medicare

Coverage Advisory Committee and director of the Center for Health Policy at

Stanford University. " The idea of making drugs available to people who can't

afford it is very appealing, but the net effect is for the drug company to

appropriate most of the gain. "

Drug companies say the high prices of new drugs allow them to recoup

development costs and invest in research, as well as provide return for

their shareholders. Donating to groups that make insurance payments helps

people get their medicine.

A Schering-Plough spokeswoman says the company contributes to Mr. Kuhn's

charity " as a resource for patients. " She declined to say how much

Schering-Plough donates to such programs.

Patients are grateful for the help. " Whoever thought a week's worth of pills

could cost $1,200? " says Ms. Oliva, who is now taking another round of

Temodar. " But I'm so pleasantly surprised that someone is trying to help me

stay alive and it's the drug company of all people. "

The need for financial-assistance programs is growing. The biotechnology

revolution has created hundreds of drugs for chronic, life-threatening

illnesses. But many are coming to market at high prices. In May, the U.S.

Food and Drug Administration approved a drug for a rare genetic disease,

called MPS-VI, made by California-based BioMarin Pharmaceutical Inc., which

costs an average of $300,000 a year. Other new drugs cost less, but are

still pricey, such as cancer drugs Avastin, at $50,000 a year, and Erbitux

at nearly $120,000 a year.

Unlike traditional medicines that are made by mixing chemicals, many newer

drugs are proteins grown in cells, which is a complex, expensive process.

Companies say costly manufacturing also leads to higher prices. On the other

hand, the gross profit margins on some of these drugs can exceed 90%.

While Patient Services developed the concept of soliciting drug-company

money to pay insurance premiums, the National Organization for Rare

Disorders, a Connecticut nonprofit, recently began performing the same kind

of middleman role. " Everybody knows what has to happen -- that these prices

have to come down, " says Abbey Meyers, the group's president. For now, she

says, " we're trying to work with drug companies in a way that's acceptable

to them and that also helps patients. We're doing the best we can. " A few

smaller charities have sprung up recently with similar plans.

Companies including Amgen Inc., Genentech Inc., Genzyme Corp., Teva

Pharmaceutical Industries Ltd., Baxter International Inc., Novartis AG and

ZLB Behring also donate to these programs.

Approaching Companies Mr. Kuhn, 52, who suffers from hemophilia, co-founded

Patient Services, also known as PSI, in 1989 while working as a counselor at

a Richmond, Va., hospital. He saw hemophiliacs struggling to pay rising

premiums to maintain insurance coverage for Factor VIII, the blood-clotting

protein they need to stay alive. The drug today costs about $100,000 a year.

Mr. Kuhn approached companies making the drug for a donation to help

patients pay premiums. " Our argument was, 'If you donate $50,000, we can

keep these people insured and provide revenue for you,' " he says.

Baxter and Armour Pharmaceutical Co., two of several companies that made the

drug, each contributed $50,000 the first year. The program has grown

steadily, now assisting people with 19 different chronic illnesses.

Last year, Patient Services raised $22 million, helping nearly 20,000

patients pay premiums and co-payments. About $17 million of that came from

13 drug companies. When he makes his pitch to companies, Mr. Kuhn says he

emphasizes that they can make money by donating. During a 2003 visit to

Genzyme, for instance, he brought along a chart showing how a donation would

affect a patient who needs the company's drug, Fabrazyme. Genzyme says the

drug typically costs between $175,000 and $200,000 a year. The chart showed

that if Genzyme donated $5,400 to cover the patient's premium for a year, it

would bring in about $185,000 by getting its drug paid for by the patient's

insurance. Genzyme signed up. " We wanted to do whatever we could to make

sure all patients who needed our treatment could get it, " says a spokesman

for the company, based in Cambridge, Mass. He declined to say how much

Genzyme donates to Patient Services.

'Who Can Afford It?'

One of the first to get help was , a 25-year-old auto mechanic

in Phoenix, who suffers from Fabry disease, a rare genetic disorder that can

cause kidney failure, heart attacks and death. It costs about $224,000 a

year for him to receive Genzyme's drug. His insurance pays for most of that,

but under the plan, he is required to pay about $27,000 annually, PSI says.

Mr. declined to be interviewed.

" It's a real miracle drug for us, " says his father, Larry . " But who

can afford it? "

Patient Services says it provides $27,000, all donated by Genzyme, to keep

Mr. insured. Mr. 's insurer pays the remaining $197,000 cost of

his treatment, according to PSI. Until Mr. 's drug was covered by

insurance, Genzyme provided it to him for free, his father says.

Genzyme helps keep 167 patients with Fabry disease insured through its

charitable program, PSI says. Genzyme is the only donor for PSI's Fabry

program and it makes the only drug for the disease. The company donates less

than $2 million to the program, Mr. Kuhn says.

It isn't clear how much revenue Genzyme receives from the sale of the drug

to these patients. Assuming each patient receives the low-end estimate for a

year's dose, that could generate revenue of about $29 million.

" Of course we get revenue from patients who are insured, " says a Genzyme

spokesman. But he declined to be specific on how much revenue the company

receives for patients it helps stay insured, saying that would incorrectly

imply the company makes donations " simply for financial gain. " He says the

company makes donations " simply to insure access to care for patients. "

Genzyme struck a similar arrangement with the National Gaucher Care

Foundation in 1993, soon after the company brought a drug to market to treat

Gaucher disease. Genzyme makes the most widely prescribed treatment for this

disease, which causes organs to swell and bones to deteriorate.

The foundation's patient-assistance budget this year is $1.6 million. The

biggest donor is Genzyme, according to Barbara Lichtenstein, program

director of the foundation. It helps about 200 patients with insurance

premiums and other medical expenses. Genzyme says its drug for this disease

costs an average of $200,000 per year.

Genzyme has a staff of 34 insurance specialists who try to keep patients who

take its drugs insured. If no insurance can be found, the company gives the

drug to patients free. Gaucher patients " are like gerbils on a wheel, "

continuously finding and losing insurance, Ms. Lichtenstein says. Some who

call her have hit their maximum lifetime caps of several million dollars on

insurance coverage and have to find new jobs to get additional health-care

coverage, she says.

Teva Neuroscience Inc. markets a multiple sclerosis drug that retails for

about $18,000 annually. " Market research told us early on we needed to do a

patient-support program " because some people wouldn't be able to afford

their co-payments, says Lynch, director of customer management.

Teva donates to the National Organization for Rare Disorders to provide

co-payment assistance. Ms. Lynch says Teva didn't calculate the profit it

could receive when making its donation, " but from a common-sense

perspective, you can get there. " She says Teva takes a tax deduction for its

donation.

Teva considered setting up a foundation on its own, she says, but concluded

it was " cleaner from a regulatory point of view to work through a third

party. "

Some companies have been nervous about donating to his charity, Mr. Kuhn

says, fearing they might violate federal anti-kickback laws. These laws,

passed in the 1970s, forbid drug companies from giving financial assistance

to Medicare and other federally insured patients which could be an

inducement to choose one drug over another. The laws don't apply to people

who are privately insured.

To reassure drug companies it was legal to donate to his program, Mr. Kuhn

sought an opinion in 2000 from the Office of the Inspector General of the

U.S. Department of Health and Human Services.

In 2002, the Inspector General's office issued its opinion, saying it

wouldn't seek civil or criminal penalties from participants in Mr. Kuhn's

program. It said the program " interposes an independent charitable

organization between donors and patients in a manner that effectively

insulates " patients and doctors from making prescribing decisions based on

the donations. This is because PSI sets up programs not by individual drug,

but rather by disease -- so that all the companies making, say, multiple

sclerosis drugs, donate into a pool for patients with the disorder.

Applicants receive help based on financial need, regardless of what drug

they are prescribed, and even if the maker of a prescribed drug doesn't

contribute to the program.

For certain rare diseases, however, only one company makes a drug to treat

the condition.

After the favorable opinion, Mr. Kuhn says he found drug-company executives

eager to donate. " You could see the dollar signs shining in their eyes and

they would jump over the table and say, 'When can I start?' " he says. He

has raised $30 million so far this year and is assisting 25,000 patients.

Patient-assistance programs must walk a thin line. In 2002, the Inspector

General also issued a separate, unfavorable opinion on the subject. This was

to an unidentified drug company seeking to establish a nonprofit foundation

to cover co-payments only for patients on its drug.

" The proposed arrangement poses all the usual risks of fraud and abuse

associated with kickbacks, " the opinion said. It said physicians would have

an incentive to prescribe the drug in question, which is infused in doctors'

offices, over another because they would be certain of being paid rather

than risk collecting the co-payment from the patient.

The opinion noted patient-assistance programs can be " very profitable to

manufacturers...Given that the marginal variable cost of a drug can be quite

low, the profit can be considerable, especially for an expensive drug for a

chronic condition. "

A Working Balance

Third-party charities struggle to maintain a working balance with corporate

donors. Hardin, vice president of patient services, at the National

Organization of Rare Disorders, says companies routinely press the group to

give out more patient information than it can legally provide. " There's a

lot of whining going on with them asking, 'What percentage of the fund is

taking care of our patients?' We can't provide that information, " she says.

Mr. Kuhn's charity is growing so much that it plans to build a $1.7 million,

15,000-square-foot building. One reason he expects demand for assistance to

rise is that next year, Medicare will start a program to help the elderly

afford drugs. Currently, Medicare doesn't pay for most prescription drugs.

But the new Medicare program is structured so that some patients on

expensive drugs will still have to come up with thousands of dollars to pay

out-of-pocket costs.

Vivian Gushwa, 70, was prescribed the cancer drug Gleevec after her rare

gastrointestinal tumor recurred last year. Her husband, , went to Rite

Aid in n, Ohio, to pick up the medicine and came home crying. The

retail price of her prescription was $2,000 for two weeks' supply, which

would consume the couple's $2,000 a month in pension and Social Security

income, they say. " There's no way on God's green earth we can afford that, "

says Mr. Gushwa, 74, who worked most of his life at a local electric-power

company. He bought a two weeks' supply of the drug, using about half of

their $4,000 in savings. Novartis, the Swiss company that makes Gleevec,

provided free medicine for several months and then directed the couple to

apply to the federal government for coverage under a pilot Medicare program.

The Gushwas again suffered sticker shock. Their income of $2,000 a month put

them in a group required to pay $3,600 a year before being eligible for the

drug benefit. They also have to pay 5% of each prescription.

" Medication has to be paid for. We understand that, " says Mrs. Gushwa. " But

how do people afford it? Do you just die? "

She says she overheard her husband weeping on the phone as he called around

seeking help. An official from Medicare referred him to PSI, which had just

started a program funded by Novartis. Mrs. Gushwa got help from the charity

and received the Novartis drug. " I'm just thankful to my doctors and God and

PSI, " she says.

Pochtar, executive director of oncology-managed marketing at Novartis,

says his company began donating to PSI last year. " It's a fairly new

phenomenon, " he says.

Novartis donated several million dollars to PSI this year to help patients

make drug co-payments, a spokeswoman says. She says the donation was less

than $10 million, but wouldn't be more specific. This generates revenue for

the company. PSI says it helped 1,255 patients in two cancer programs for

which Novartis is the only donor -- with almost all of them receiving

Gleevec. The average wholesale price of the drug at the recommended dose is

about $37,000 a year. If the patients in the program receive the recommended

dose, that could generate tens of millions of dollars in revenue.

A Novartis spokeswoman wouldn't comment about the revenue generated. In a

statement, she said that the company's donation to PSI " helps insured

patients with co-pay obligations. "

If these patients weren't insured, some might qualify for free drugs.

Novartis says it gave away $100 million of Gleevec in 2004. The company says

its patient-assistance programs have helped 12,000 people world-wide gain

access to Gleevec. Sales of the drug last year were $1.6 billion.

Long-term support from the charities is uncertain. Mr. Kuhn says patients

are guaranteed assistance for two years. After that, it is hoped that they

can be weaned off the program, by finding a different insurance plan or a

new job with better benefits. " We don't want to become a social-service

agency, " he says.

A Letter to Ms. Samit

This is difficult for many. Carolyn Samit, 63, of Caldwell, N.J., suffers

from primary immune deficiency, an inability to produce enough antibodies to

fight off diseases. Because her care is expensive, her insurance premiums

are high. Last year, PSI paid her health-insurance premium of $53,000.

But Mr. Kuhn called her late last year, saying she needed to find some other

way of paying for insurance this year. He followed up with a letter, saying,

" This letter is being written to you, not to create panic, but to share the

truth with you about your assistance being in jeopardy. " The letter, written

to all patients with immune disorders, said PSI couldn't guarantee help for

them because corporate donations for their particular drug program had

fallen.

Ms. Samit called Mr. Kuhn, crying and begging him not to drop her, saying

she had failed for years to find another insurer that would cover her care

for less. She takes Gamunex, an immune globulin or mix of antibodies

purified out of donor blood, sold by Talecris Biotherapeutics, for which she

says her insurer pays $47,000 annually. She also needs an antibiotic,

vancomycin, which costs about $46,000 because of her frequent use. Her

insurer, Celtic Insurance, of Chicago, didn't return calls.

The widow of an American Airlines executive, Ms. Samit lost coverage under

his plan after he died. She lives on his $22,000-a-year pension and says she

wiped out her savings and her daughter's trying to pay her rising premium

until PSI stepped in.

Mr. Kuhn says he told Ms. Samit he could continue to pay her premium only if

the charity received more money from companies that make her drug. So she

began calling around, asking drug makers to boost their donations.

Officials at Baxter and Talecris acknowledge receiving Ms. Samit's calls.

Both companies say they donated to PSI this year, but note that they don't

control decisions on which patients get helped by their donations. Mr. Kuhn

says the new money allowed him to pay Ms. Samit's premium and help other

patients for another year.

" I feel grateful every day for PSI and the companies that support them, " Ms.

Samit says. " I was a middle-class person living a comfortable middle-class

life. It never occurred to me in a million years that I could lose insurance

and die. "

Mr. Kuhn says it's important to focus on the fact that people are being

helped by drug companies' contributions to his charity. " Although they are

making money hand over fist, they are doing wonderful things for patients, "

he says.

Write to Geeta Anand at <mailto:geeta.anand@...> geeta.anand@...

URL for this article:http://online.wsj.com/article/SB113339802749110822.html

Hyperlinks in this Article:(1)

<http://online.wsj.com/article/SB113210858490898540.html>

http://online.wsj.com/article/SB113210858490898540.html (2)

<http://online.wsj.com/article/SB113202332063297223.html>

http://online.wsj.com/article/SB113202332063297223.html (3)

<mailto:geeta.anand@...> mailto:geeta.anand@...

[Guest guest]

Thanks for the info which must be interesting for those of you in the

first world. Here in the 3rd world, these things are still quite

difficult. Heard that Novartis lost their court case re the generic

alternative to Gleevec in India so that may bring down the cost to us

in South Africa because South africa and India have close trade

relations.

I was also told that it may be possible to approach a fund set up by

Novartis if one can prove that it is unaffordable - this on condition

that one's country does not allow any generic alternatives in.

Does anybody know anything about this?

I am covered by medical insurance at the moment but I am not sure how

long that will last so I better start investigating my alternatives.