Health foundations fined for role in kickback scheme
| DOI | http://doi.org/10.1002/nba.30706 |
| Published date | 01 January 2020 |
| Date | 01 January 2020 |
JANUARY 2020 NONPROFIT BUSINESS ADVISOR
7
© 2020 Wiley Periodicals, Inc., A Wiley Company • All rights reserved
DOI: 10.1002/nba
Industry News
Disaster-related giving surges, but little going
to prevention
A new report from Candid and the Center for
Disaster Philanthropy documents some $45 billion
in private, public, corporate and individual disaster-
related giving to address major global disasters and
humanitarian crises in 2017, the most recent year for
which data are available. That reects a major increase
from the year prior, which saw around $30 billion in
disaster-related giving, and an even greater increase
in giving from foundations and public charities, which
donated over $500 million in 2017, up from $200
million in 2016.
All told, 2017 was the costliest year on record for
natural disasters in the United States, according to
the report, Measuring the State of Disaster Philan-
thropy 2019: Data to Drive Decisions. That’s thanks to
Hurricanes Harvey, Irma and Maria and wildres in
California. Meanwhile, global disasters that spurred
giving on the world stage included two large earth-
quakes in Mexico, famines in Africa and civil unrest
in Syria and Yemen.
Key ndings for 2017 include:
• $504 million in funding was provided by founda-
tions and public charities for disasters and humani-
tarian crises, with natural disasters accounting for
65% of that.
Health foundations ned for role in kickback scheme
Two charitable foundations have agreed to pay
millions in nes to resolve federal charges that they
helped pharmaceutical companies to pay kickbacks
to Medicare patients taking the companies’ drugs.
According to the U.S. Attorney’s Ofce in Mas-
sachusetts, the Chronic Disease Fund Inc.—doing
business as Good Days from CDF—and the Patient
Access Network Foundation have agreed to pay $2
million and $4 million, respectively, for their roles
in the scheme.
The government alleged that the CDF and PANF
worked with various pharmaceutical companies
to design and operate certain “co-pay” funds that
funneled money from the companies to patients
taking the specic drugs the companies sold. These
schemes enabled the pharmaceutical companies
to ensure that Medicare patients did not consider
the high costs that the companies charged for their
drugs, the government said, while also minimizing
the possibility that the companies’ money would go
to patients taking competing drugs made by other
companies.
When a Medicare beneciary obtains a prescrip-
tion drug covered by Medicare Part B or Part D,
the beneciary may be required to make a partial
payment, which may take the form of a co-payment,
co-insurance or deductible, known collectively as
“co-pays.” An Anti-Kickback Statute prohibits
pharmaceutical companies from offering or paying,
directly or indirectly, any remuneration—which in-
cludes money or any other thing of value—to induce
Medicare patients to purchase the companies’ drugs.
The law further prohibits third parties, such as co-
pay foundations, from conspiring with pharmaceuti-
cal companies to violate the Anti-Kickback Statute.
However, the federal government alleged that,
from 2010 through 2014, the CDF conspired with
ve pharmaceutical companies—Novartis, Den-
dreon, Astellas, Onyx and Questcor—to enable
them to pay kickbacks to Medicare patients taking
their drugs. It is further alleged that, from 2011
through 2014, the PANF permitted four pharma-
ceutical companies—Bayer, Astellas, Dendreon
and Amgen—to use the PANF as a conduit to pay
kickbacks to Medicare patients taking their drugs.
In short, the U.S. Attorney’s Ofce said, the CDF
and PANF functioned not as independent charities,
but as pass-throughs for specic pharmaceutical
companies to pay kickbacks to Medicare patients
taking their drugs.
“Today’s settlements are a warning to all phar-
maceutical companies, foundations, and others who
try to subvert the charitable donation process for
their own nancial gain at the expense of American
taxpayers,” said Joseph Bonavolonta of the FBI’s
Boston Division, which investigated the scheme. ■
(See DISASTER on page 8)
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