Investigative report reveals how Big Pharma gets special tax breaks

• The Wall Street Journal on Thursday examined prescription drug assistance programs for people with health insurance and how the programs are benefiting both patients and drug makers.
• Uninsured individuals can receive medications at no cost through various charity programs, while programs for those with health coverage help cover copayments.
• For example, Schering-Plough donates money to Patient Services Incorporated, a Virginia-based patient assistance program.
• PSI then covers part of copays for insured patients who take Schering-Plough medications, and the patients' health plans cover the remainder of the copays.
• For instance, PSI covered 50% of a copayment for a six-week course Temodar, a Schering-Plough treatment that costs $1,272 per week, for a New Jersey woman with a rare type of brain tumor.
• Questions About the Arrangement According to the Journal, critics of patient-assistance programs say they allow drug companies to keep prices high, while passing the cost of drugs to the insurer, who might in turn shift the cost to other members of the insurance plan.
• Dana Kuhn, co-founder and president of PSI, said that when he pitches the program to drug companies, he tells them they can make money by participating.
• For instance, in a visit to Genzyme, he demonstrated that if the company donated $5,400 to cover an annual premium for a patient taking Fabrazyme, it could "bring in about $185,000 by getting its drug paid for by the patient's insurance," the Journal reports.
• An unnamed Genzyme spokesperson said, "Of course we get revenue from patients who are insured," but he declined to specify how much revenue Genzyme receives for donating premium money.
• Further, it said that PSI "interposes an independent charitable organization between donors and patients in a manner that effectively insulates" patients and physicians from being influenced by donations.
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