Pfizer Lawsuit Seeks to Legalize Medicare Reimbursements for Out-of-Pocket Medication Costs

Pfizer is suing the U.S. government to legalize reimbursements to Medicare recipients for out-of-pocket medication costs.

In 2018, the pharmaceutical company paid $24 million to settle allegations by the Justice Department that it was using Medicare reimbursements to pay kickbacks and incentivize patients to choose Pfizer drugs at high costs to Medicare and Medicaid.

U.S. laws currently forbid drug manufacturers from assisting patients with Medicare copays. However, regulators have allowed the pharmaceutical industry to cover patients’ copays by routing money through outside charities, as long as the charities don’t match these funds with specific drugs. The Justice Department alleged that Pfizer was among a dozen companies to violate this rule.

Pfizer’s lawsuit, in the Southern District of New York, seeks permission to reimburse patients for two heart failure drugs, covering Medicare copays, deductibles, and coinsurance that would normally cost patients about $13,000 per year.

Even if Pfizer loses the case, it may pave the way for other drugmakers’ lawsuits in favor of deregulation and corporate rights. “If this is legal for Pfizer, Pfizer will not be the only pharmaceutical company to use this, and there will effectively be a gold rush,” said Assistant U.S. Attorney Jacob Lillywhite.

Source: Kaiser Health News, July 29, 2021.