There is a federal law that prohibits drug companies from directly covering out-of-pocket spending by Medicare beneficiaries. But these companies are allowed to donate to independent charities that provide assistance to patients — and they can earmark donations for a condition treated by their drugs.
With this in mind, a group of researchers wanted to know whether the donations are a good investment for the pharmaceutical industry — and they found that, yes, the donations can be profitable. This was the case even when there were relatively few patients who used a drug made by the companies, according to their analysis, published in Health Affairs.
Notably, among the 10 most expensive conditions that were reviewed, drug companies would have made money if their donations boosted sales by an average of just 3%. Among these conditions, the leading drug company accounted for 67% of sales in 2010 and 89% in 2017, on average, indicating the companies could effectively assist in boosting sales of their own medicines by contributing to charities devoted to those conditions.
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