About patient assistance programs

Kaiser Health News published a Perspective that illuminates how some patient assistance programs for drugs work. Pharmaceutical manufacturers first mark up their prices, which raises the patient copay amount. To address patients' financial concerns, pharmaceutical manufacturers will give money to charities to offset the patient copay for the drugs that they sell. This arrangement seems like a win-win: patients pay virtually nothing for their prescription drugs and the manufacturers get to keep charging high prices and additionally, the manufacturers get to deduct the money given to charities. Who loses? The payers who pay high prices for the drugs, and perhaps in the long-term, the patients who end up paying higher premiums because of the high prescription drug prices.

Interestingly, the federal government "severely limits the use of such assistance to patients covered by government insurers" for Medicare patients (and perhaps Medicaid). Perhaps it would be the interest of commercial insurers to follow suit as an industry. If patients were faced with high copay without these patient assistance programs, more of them would consider cheaper alternatives, saving some cost for the overall system. However, at the same time, some of the patients who truly benefit from the more expensive drugs (e.g. they experience strong side effects from the cheaper alternatives) may face some financial difficulties without the patient assistance programs.