Co-Pay Charity Overhauled Amid Scrutiny of Drug Firm’s Gifts

A nonprofit group that helps patients cover out-of-pocket costs for medications is in turmoil amid questions about its ties to a major pharmaceutical firm that potentially benefits from the charity’s work, writes The New York Times.

The Chronic Disease Fund’s problems cast light on the relationship between such charities, which have grown as drug prices have soared, and the pharmaceutical companies that largely fund them. The firms’ revenues can swell if more patients are able to make their co-payments.

The contributions are legal provided the company does not require that its donations be used exclusively to pay for its own drugs. But articles in the financial and investment media have suggested that the Chronic Disease Fund might be favoring Questcor Pharmaceuticals, which is itself under federal investigation for its marketing practices.

The Plano, Tex.-based fund has hired a Washington law firm to evaluate its practices. The charity has replaced its board, and its founder and president, Michael Banigan, is stepping down.