Journal of Law and Policy


Implemented in January 2006 as a voluntary enrollment supplement to standard Medicare plans, Medicare Part D coverage subsidizes the cost of prescription drugs for participants. However, significant gaps in coverage exist for those suffering from rare diseases that require costly drugs. Pharmaceutical companies seek to remove the powerful market force of patient price sensitivity by directly sponsoring or substantially funding “patient assistance programs” that help cover out-of-pocket costs. While pharmaceutical donors insist that their goal is strictly altruistic, the reality is that many of these programs offer a financial windfall for drug makers because they help funnel patients towards new pharmaceuticals with generic alternatives while collecting the drug’s market price at the expense of taxpayers. This Note argues that industry-sponsored patient assistance programs violate the anti-kickback statute and should be outlawed. To preserve a safety net of assistance while discouraging illegal activity, an industry-sponsored, CMS-administered fund should be established for the appropriate disbursement of pharmaceutical industry charity, opening access to costly, life-saving medications to a broader population of needy patients in a manner uninfluenced by corporate bottom lines.