Patients Services, Inc. (PSI), a non-profit charitable organization based in Virginia, has been expanding its effort to help patients with chronic illnesses pay for rising drug costs. PSI, which was founded in 1989, solicits monetary donations from pharmaceutical companies and then uses the funds raised to pay the high health insurance premiums and drug co-payments of eligible individuals. The charity raised $22 million last year and was able to pay the premiums and co-payments of almost 20,000 patients across the country with chronic and costly illnesses such as hemophilia.
The co-founder and president of PSI is Dana Kuhn, a 52-year-old with hemophilia. “It’s a win-win situation. Patients are helped and companies are helped,” said Kuhn. An increasing number of drug companies are making contributions to charitable programs such as PSI. The National Organization for Rare Disorders has also instituted a similar program.
Some in the field counter that the broader and most pervasive issue of increasingly exorbitant drug costs is not being addressed. “I don’t want to discount the legitimate help they provide to people in need. But it’s really a clumsy way for manufacturers to game the system so they can continue their high pricing,” said internist Scott Howell, vice president of pharmacy affairs with the health insurance company Highmark Inc., part of Blue Cross and Blue Shield.
Companies assert that research, development and more sophisticated manufacturing processes albeit expensive, are necessary to be able to produce products used to treat chronic and often life-threatening conditions. Critics argue that by paying premiums and co-payments pharmaceutical companies transfer much of the price of these drugs to insurers, who then cover the cost by raising the premiums of their other enrollees.
Kuhn summed up his approach towards soliciting companies. He explained, “our argument was, ‘if you donate $50,000, we can keep these people insured and provide revenue for you.” In addition, companies often take a tax deduction for their donations. Patients eligible for the PSI program are guaranteed two years of assistance and then encouraged to find a new insurance plan.
Others look at the high gross profit margins for some these drugs and offer another viewpoint. “The idea of making drugs available to people who can’t afford it is very appealing, but the net effect is for the drug company to appropriate most of the gain,” said Alan Garber, chairman of the Medicare Coverage Advisory Committee and director of the Center for Health Policy at Stanford University.
Source: The Ledger, December 2, 2005