Cancer Drug Manufacturer Accused of Using Charities to Gain Billions

A whistleblower lawsuit filed by a former Celgene sales representative alleges that the pharmaceutical giant used charities that help patients afford cancer drugs as part of a "business scheme to gain billions" in taxpayer dollars, Bloomberg reports.

According to federal court filings, the biopharmaceutical company donated hundreds of millions of dollars to patient-assistance charities, coordinated with them in violation of federal law to ensure that its own medicines were covered, and collected billions of dollars in reimbursements from Medicare and other public health plans. Under federal law, drugmakers can make contributions to patient-assistance charities only if the charities are independent and do not consult or coordinate with drug companies how the donations are spent. Under something called the anti-kickback law, they are also prohibited  from providing direct co-pay help to the country's nearly forty million Medicare patients with prescription drug coverage. According to the deposition testimony of Beverly Brown, a former Celgene sales representative, the company contributed between $50 million and $100 million a year to charities that help people pay for their drugs, including Celgene's best-selling product Revlimid, which is used to treat multiple myeloma and other blood cancers and can cost nearly $10,000 a year for Medicare patients.

In addition, drug companies are prohibited from collecting data to determine how their cash donations affect support for their products, yet contracts between Celgene and two large charities — the Patient Access Network Foundation and the Chronic Disease Fund, which goes by the name Good Days— required that the nonprofits provide the company with significant information about their operations, according to an expert witness report. Brown's lawyers claim that Celgene has coordinated with the charities to ensure that much of its donations flow to patients who use its drugs. Most of the documents obtained through discovery in the case, which was filed  in 2010, remain under seal. In its own legal filings, Celgene said it gives to charities "because one of [our] core values is to ensure that cancer patients have access to medicines they need" and further stated that it does not coordinate with the charities with respect to how they spend the money.

Separately, federal investigators have begun examining whether some companies are working too closely with the charities. Since last October, Valeant Pharmaceuticals, Celgene, Gilead Sciences, Biogen, and Jazz Pharmaceuticals have disclosed that they received subpoenas from the U.S. Justice Department regarding their relationships with patient-assistance charities.

The charities are not named as defendants in Brown's lawsuit, and an attorney for Good Days told Bloomberg it has never provided any data that would enable donors to deduce how its funds are allocated. In addition, he said, the charity "does not limit its co-pay assistance to drugs manufactured by donors nor does it allow donors to influence its establishment of disease funds."

Ben Elgin, Robert Langreth. "Celgene Accused of Using Charities 'Scheme' to Gain Billions." Bloomberg 08/01/2016.