Pfizer copay program violates anti-kickback law, court rules

The pharmaceutical company Pfizer is not permitted to pay Medicare beneficiaries’ out-of-pocket costs for one of its medications, a federal appeals court ruled Monday.

The Health and Human Services Department previously declared a proposed copay program for Pfizer’s $225,000-a-year heart medication tafamidis, also known as Vyndaqel and Vyndamax, isn’t allowed under the federal Anti-Kickback Statute. A federal district court sided with the government last year.

The U.S. Court of Appeals for the 2nd Circuit likewise ruled that Pfizer’s endeavor would not be legal under the statute, which prohibits drugmakers from offering financial incentives to people enrolled in government healthcare programs. Pfizer’s Direct Copay Assistance Program was designed to limit tafamidis cost-sharing to $35 a month for Medicare Part D enrollees with lower incomes.

HHS has some discretion in applying the law and rejected Pfizer’s plea in 2020. Pfizer proposed providing discounts to patients who use tafamidis, an orphan drug that treats a progressive heart condition called transthyretin amyloid cardiomyopathy, which afflicts about 150,000 older Americans. Tafamidis is the only Food and Drug Administration-approved medicine for the disease.

Pfizer argued that rules prohibiting drug companies from directly or indirectly covering cost-sharing are unconstitutional and are so broad that they criminalize a wide range of activities, including people helping family members pay for medical care.

Pfizer is disappointed its appeal was unsuccessful, a spokesperson wrote in an email. “The company continues to believe that providing copay assistance to eligible patients who have been prescribed tafamidis would represent a fair and effective way to lower out-of-pocket costs and help ensure affordable access to this important medicine,” the spokesperson wrote.

The health insurance association AHIP cheered the decision. “The Anti-Kickback Statute is an essential protection against the risk of fraud, waste and abuse that otherwise allows drug manufacturers to subsidize patients’ upfront costs to induce purchases of their products,” AHIP said in a statement. “The courts have taken an important step to protect Americans from what would otherwise be an unchecked multi-billion-dollar price tag.”