Humana’s Lawsuit Against Biogen Decries Ongoing ‘Seed and Sweep’ Schemes

Ed Tobias avatar

by Ed Tobias |

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People living with multiple sclerosis know that the medications used to treat it are expensive. According to the National Multiple Sclerosis Society, the median annual price of brand-name disease-modifying therapies (DMTs) last year was $91,835. Five of them carried a price tag of more than $100,000 a year.

Many pharmaceutical companies help defray the out-of-pocket costs of their DMTs for patients. But U.S. law strictly limits how this can be done for people covered by federal insurance programs, such as Medicare. Officials are concerned that copay assistance and grants to foundations that help patients pay for their treatments may promote the sale of the companies’ products, which is illegal.

Last year, the U.S. Justice Department filed a complaint against two Teva Pharmaceutical subsidiaries, accusing them of skirting copay restrictions by donating to foundations and then using those organizations to funnel copay assistance to patients they were prohibited from directly helping. Officials said Teva wanted to ensure that Copaxone (glatiramer acetate) users, including those on Medicare, wouldn’t ever have to pay much, if anything, for the medication. That induced patients to select that DMT over others. 

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‘Seed and sweep’

This brings us to a lawsuit filed last Friday by the health insurance company Humana against drug manufacturer Biogen. The lawsuit alleges that Biogen attempted to boost sales of its MS medications Tysabri (natalizumab), Avonex (interferon beta-1a), and Tecfidera (dimethyl fumarate) by “seeding” patients with free samples of those drugs. When sample periods ended, the company then allegedly “swept” patients into government programs, such as Medicare, where they had large copays, the lawsuit alleges.

According to the website Fierce Pharma, which covers the pharmaceutical industry, the lawsuit claims Biogen gave money to the “nominally charitable foundations” Chronic Disease Fund and The Assistance Fund “with the intent and understanding that they would use Biogen’s money specifically to cover the copays of patients taking Biogen’s MS Drugs. … In so doing, Biogen intended that the MS drug patients—but not insurers—avoid the steep prices charged for the drug.” 

As Fierce Pharma noted, the two foundations mentioned in the lawsuit — the Chronic Disease Fund and The Assistance Fund — had previous settlements with the Justice Department over the same issue, for $2 million and $4 million, respectively. 

In an email, I asked Biogen spokeswoman Allison Parks about the lawsuit, but she responded by saying, “We do not comment on pending litigation.”

What do you think?

When I first wrote about this issue three years ago, I asked the following questions:

Do the pharma companies use their assistance programs to push their own products? Sure.

Do their patient services drive up the cost of already expensive medications? Probably, at least to some extent.

Would more patients be able to afford these treatments if the assistance programs were eliminated and the actual price of the medications was lowered significantly? I don’t know.

What do you think? Please share in the comments below. 

You’re invited to visit my personal blog at www.themswire.com.

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Note: Multiple Sclerosis News Today is strictly a news and information website about the disease. It does not provide medical advice, diagnosis, or treatment. This content is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read on this website. The opinions expressed in this column are not those of Multiple Sclerosis News Today or its parent company, BioNews, and are intended to spark discussion about issues pertaining to multiple sclerosis.

Comments

blinky avatar

blinky

copaxone used to be about $9000 a year. then other "dmds" started appearing with their ridiculous price tags so its price also went up. Why? GREED. ENVY. its been around since Cain and Abel. Nothing new under the sun. Hope?
Only in JESUS!!

Reply
Jeff Bowden avatar

Jeff Bowden

I really don't know what the complaint is about. Biogen is in business to make money, period! Humana is also a 'For Profit' business. I was DX'd in 1977 @ 25. There were no drugs until Biogen created Avonex with the sole purpose to make a profit. I stabbed myself with that '3 and 1/2 foot needle' for 17 years. As I couldn't get insurance Biogen provided Avonex at no charge, and probably took a reasonable tax deduction for it, until Medicare took over. I then used the patient assistance programs to cover my co-pay. Who cares where the money came from! I used the drugs my Doctors recommended; I care less which one paid! I later switched to Ocrevus. Humana, my Medicare Drug plan, paid their portion and TAF picked up the rest, as they would have whether it was for Avonex, Ocrevus, Dalfampridine (Modafinil) or what have you. I don't care who makes the drug as long as someone picked up the tab!

The prices you state are LIST PRICES. Nobody pays that. Avonex listed for about $120K and Ocrevus lists for about $60K. Pharma charges whatever they want to but Medicare pays what they want to; take it or leave it. If I recall Ocrevus actually costs about $15K to $18K / year in the U.S., and costs a whole lot less that in all other countries.

You have a real point, but we're barking up the wrong tree. If the U.S. would pull its collective heads out of "where the sun don't shine" and create a national health care system then Big Pharma would receive a reasonable compensation for their products. Of the 20 largest industrialized countries the U.S. is the ONLY one without one. Our healthcare system works only because the Medical industry can milk Medicare for drugs, DME equipment, unnecessary procedures and questionable cure-alls. Strictly for the GREED we allow drug companies to 'advertise' on TV! No other country in the world allows that!

I, for one, am very happy that Biogen et. al. have developed drugs for MS and other conditions. If we're stupid enough to pay their asking price isn't that our problem! Humana sets it premiums based on their cost; they MUST make a profit to stay in business.

Isn't this whole discussion like a cat chasing it own tail? Fix the system, not the blame!

Reply
Ed Tobias avatar

Ed Tobias

Well put, Jeff.

I'm happy with whoever helps me afford my MS meds, however they manage to do it.

Yes, they're all out for a buck. Sometimes that's more outrageous than others. Here's something I wrote a few years ago after one pharma exec called a quadrupling of a price "moral." https://multiplesclerosisnewstoday.com/2018/09/21/ms-news-nitrofurantoin-pharma-exec-calls-400-percent-price-hike-moral/

BTW, I was in the original Avonex Phase 3 trial and stabbed myself for about seven years before coming down with severe needle fatigue. I don't know how you managed it for 17!

Ed

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doreen lubin avatar

doreen lubin

aubagio also too expensive. charg my insurance 8,500 month

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