26 November 2019

Third Foundation Settles in Industry-Wide Charity Patient Assistance Program Investigation

On November 20, 2019, the US Attorney’s Office for the District of Massachusetts announced that The Assistance Fund (“TAF”), an independent charity patient assistance program (“PAP”), agreed to settle allegations that it violated the False Claims Act and agreed to pay $4 million to the government.  That amount was calculated on an ability to pay basis.  TAF is the third charity to settle in this ongoing, industry-wide investigation led by the District of Massachusetts. To date, the government has collected approximately $10 million from charity PAPs and over $800 million from eight drug manufacturers.

TAF operates various disease funds that provide financial assistance to indigent patients with copayment obligations, premium expenses, and other costs related to their disease.  The government alleged that in operating its patient assistance fund for multiple sclerosis TAF conspired with three drug manufacturers and that TAF’s fund functioned as a “conduit” for the manufacturers’ donations to patients taking their drugs. The government alleged that this resulted in Medicare patients not considering the high costs that the manufacturers charged for their MS drugs, undermining Congress’ purpose in introducing copayments to serve as a check on health care costs.

Notably, TAF operates under OIG Advisory Opinion 10-07, available here.  During the government’s investigation, one other charity PAP received a rescission of its OIG opinion.

A copy of the TAF settlement agreement is available here.

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