Your company donates to a foundation that helps patients afford medication. The foundation operates independently, and your team doesn't control which patients get help or which drugs they choose. It looks straightforward on paper.
However, the U.S. Department of Justice recently announced that Dompé Farmaceutici SpA's U.S. arm will pay $32 million to settle allegations that its contributions to patient assistance foundations were designed to induce purchases of its prescription eye drops, Oxervate. This settlement shows that even seemingly independent charitable giving can trigger Anti-Kickback Statute liability if the structure creates incentives for prescribers or patients to choose your product.
If your company manufactures pharmaceuticals, medical devices, or any product where third-party foundations help patients with cost-sharing, you're facing a critical decision. Here's how to approach it.
The Decision You Are Facing
You need to determine whether your company can safely contribute to patient assistance foundations, and if so, under what controls. This isn't a simple yes-or-no question. The answer depends on your product portfolio, the foundation's governance structure, and the safeguards you build into the relationship.
The wrong choice exposes your company to False Claims Act liability and Anti-Kickback Statute violations. The right choice requires understanding what separates legitimate charitable support from an illegal inducement scheme.
Key Factors That Affect Your Choice
Three variables drive your decision:
Product concentration. Does the foundation support patients who use multiple manufacturers' products in a therapeutic category, or does it primarily serve patients prescribed your company's drug? If your contribution effectively funds copay assistance for your own product, you've created a closed loop that regulators view as a kickback.
Foundation independence. Can your company influence which patients receive assistance, how much they receive, or which products the foundation supports? If you retain any control over disbursement decisions, you've compromised the foundation's independence.
Contribution timing and communication. Do your sales representatives mention the foundation's existence to prescribers? Does your marketing team time contributions to coincide with product launches or formulary changes? If your commercial team treats the foundation as a sales tool, you're using it as an inducement.
Path A: Direct Contribution With Product-Specific Funds
Choose this path when: Your company manufactures a single high-cost specialty drug with no therapeutic alternatives, and you want to ensure patients can afford it.
Don't choose this path. This structure creates the most legal risk. When you contribute to a foundation that exclusively or predominantly supports patients using your product, regulators will scrutinize whether you're effectively subsidizing copays to drive prescriptions.
If you're already funding a disease-specific foundation where your product represents the primary or only treatment option, you need to audit the relationship immediately. Ask:
- What percentage of the foundation's disbursements support patients prescribed your product versus competitors' products?
- Who decides which patients receive assistance and in what amounts?
- Do your sales or marketing teams reference the foundation in any customer-facing materials or conversations?
If the foundation functions as a captive fund for your product, you're operating in the same fact pattern that led to the Dompé settlement. Unwind the relationship or restructure it under Path B controls.
Path B: Contribution to Independent Multi-Manufacturer Fund
Choose this path when: You want to support patient access across a therapeutic category, and you're willing to accept that your contribution will help patients afford competitors' products as well as your own.
Requirements for this path:
Your contribution must go to a foundation that supports an entire disease category, not a single product. The foundation must receive funding from multiple manufacturers. Your company cannot earmark funds for patients using your specific drug.
You need a firewall between your commercial operations and the foundation. Your sales team cannot tell prescribers that the foundation exists. Your marketing materials cannot reference the foundation's copay assistance. Your contribution decisions cannot be tied to sales forecasts, product launches, or market share goals.
The foundation must operate under governance rules that prevent donor influence. You don't get a board seat. You don't receive patient-level data. You don't know which of your customers' patients received assistance.
Monitor these indicators:
Track what percentage of the foundation's total funding comes from your company. If you're contributing more than 20-30% of the foundation's budget, you're creating dependency that undermines independence.
Review the foundation's eligibility criteria and disbursement policies annually. If the criteria effectively screen for patients likely to use your product (based on diagnosis codes, prior authorization requirements, or specialty pharmacy networks), the structure is suspect.
Audit your sales force's compliance with the communication firewall. If representatives mention the foundation in call notes, emails, or speaker programs, you've broken the independence requirement.
Path C: No Contribution, Alternative Patient Support
Choose this path when: You cannot structure a contribution that meets Path B requirements, or when your risk assessment shows that any foundation relationship creates unacceptable exposure.
Alternative approaches:
Offer a manufacturer copay card directly to patients, with clear disclosure that the card cannot be used in conjunction with federal healthcare programs. This creates transparency about the source of assistance and complies with Anti-Kickback Statute safe harbors when properly structured.
Contract with a specialty pharmacy to provide patient financial counseling that helps patients identify all available assistance programs, including those funded by competitors. You're supporting the service infrastructure, not selectively funding your own product's copays.
Advocate for formulary changes or coverage expansions that reduce patient cost-sharing at the payer level, rather than subsidizing copays after the fact.
Summary Matrix
| Path | When to Use | Key Safeguard | Primary Risk |
|---|---|---|---|
| Path A: Product-Specific Fund | Never (creates kickback liability) | N/A | Anti-Kickback Statute violation, False Claims Act exposure |
| Path B: Independent Multi-Manufacturer Fund | Multiple competitors exist; foundation serves disease category | Complete firewall between commercial team and foundation | Firewall breach; disproportionate funding share |
| Path C: No Foundation Contribution | Cannot meet Path B independence requirements | Direct manufacturer assistance with federal program exclusions | Improper use with federal healthcare beneficiaries |
The Dompé settlement shows that regulators will look past the legal structure to examine the economic reality. If your contribution functions as a sales incentive, the fact that it flows through a charitable foundation won't protect you. Your decision tree needs to start with that principle, not end with it.
