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Patient Assistance Programs

Pill bottle with pills coming out

Since the 2000s, pharmaceutical companies have developed patient assistance programs to help cover the cost of some of the industry’s drugs. I myself participate in the Botox Savings Program, a product of botox manufacturer Allergan.

The program is relatively simple. I receive Botox injections four times per year for chronic migraine. The contracted rate through my health insurer for a year’s worth of treatment is just north of $5,500. That’s almost as much as we pay in premiums for our whole family’s coverage.

This is where the patient assistance program comes in. I submit the required documentation and Allergan reimburses me up to $700 per treatment, which cuts my annual out-of-pocket cost by 75%. I get the medication I need, Allergan gets paid for the work that they’ve done, and my treatment doesn’t scramble our financial plan.

Pharmaceuticals have come under intense scrutiny in recent years for their pricing structures. Reforms and regulations around 2010 outlawed the pampering of physicians by drug reps with freebies, food, and travel. That was probably overall a good move to prevent widespread abuses in the system.

However, [regulators have now turned their sights on patient assistance programs](https://www.wsj.com/articles/drugmakers-free-services-spur-government-scrutiny-1537531201?mod=searchresults&page=4&pos=12). They have the same philosophy as they did a decade ago, but this time, they’re misguided.

The position of regulators is that physicians prescribing medications with these assistance programs attached to them amounts to a kickback scheme. Physicians have a duty to their patients to provide the best care possible and one of the factors that they must consider is the financial burden of a treatment. After all, if a patient can’t afford a medication, they are likely to not accept treatment, leading to further complications down the road.

So if there are two equal drugs, at the same price, and one offers a patient assistance program, the physician is adhering to their duty to the patient by prescribing the cheaper drug. Healthcare is a free market, and if a pharmaceutical company wants to cut their margin as a strategy to outperform a competitor drug and improve sales, they are within their right to do so.

These programs are more akin to mail-in rebates than they are to kickbacks. Patients can reduce their out-of-pocket expense on a drug by submitting the required documentation. Further, for the most expensive drugs, private insurers generally require proof that less expensive treatments have been tried and failed before agreeing to pay for a brand name drug.

Pricing in healthcare is murky and convoluted, as a result of the myriad of networks, providers, insurers, and constantly renegotiated contracts. Regulators should be vigilant about abuses in the system, but they also need to be sensitive to the needs of the patient. Targeted enforcement is a more judicious approach to alleged kickback schemes rather than wholesale preemptive reform. If patient assistance programs go the way of drug branded pens and notepads, patients throughout the system will be in big trouble, myself included.