CHINO, Calif. - The swelling attacks come on without warning. Loukisha Olive-McCoy’s lower lip puffs up; then her cheeks and jaw twist and pull, distorting her face into an involuntary grimace. Sometimes her tongue will fill up the back of her throat and choke off her breathing.
Olive-McCoy, 44, has hereditary angioedema (HAE), a life-threatening disease so rare that many doctors have only read about it. Fortunately, there are cutting-edge drugs to keep the swelling at bay and treat the attacks that break through.
Her family relies on food stamps to get by, but the price of just one of Olive-McCoy’s drugs will be about $600,000 this year. Each week, she injects medicine into her body that’s worth more than a year’s rent for the tiny bungalow she shares with her husband, Ryan McCoy, and their two children. When Olive-McCoy has an attack, the costs for other drugs and care can spiral - she has received hospital bills for more than $1 million.
For a time, Olive-McCoy couldn’t afford or qualify for health insurance. But once her HAE was diagnosed and she was put on a newly approved rare-disease drug, she entered a pocket of the health-care system that drug companies use to ensure that rare-disease patients can afford their expensive medicine.
Pharmaceutical companies donate to independent charities that cover drug co-pays and, in some cases, health insurance premiums so that financially needy patients such as Olive-McCoy can afford the best health-care plans and get the treatment they need to survive.
Without help from a charity funded by a drug company, Olive-McCoy could turn to Medi-Cal, her state’s health plan for the poor. But health experts said that Medi-Cal would not automatically cover her specialists and that, crucially, reimbursements to drug firms are typically less generous than with private insurance because Medi-Cal is entitled by law to deep discounts.
Some health policy experts and insurance companies argue that charities, a small but critical part of a sprawling U.S. health-care system, increase sales and shield drug companies from the pressure to lower their prices that might come from publicity about patients unable to afford expensive lifesaving medication. Insurers have raised concerns that the charities could be acting in their donors’ financial interests, for example by paying for health plans that pay the drug companies more in reimbursements.
The charities say that they operate independently of the drug companies under strict rules meant to prevent kickbacks and do not steer patients into particular health plans. The drug companies defend the charities as a way to ensure that needy patients get drugs they may not otherwise be able to afford, and accuse insurers of not providing affordable drug coverage.
Patients such as Olive-McCoy are extremely valuable to drug companies. Costs of treating rare diseases averaged $140,000 a year in 2016, according to analyst firm EvaluatePharma. Funding charities that ensure patients get their drugs can quickly pay off. A Citi Research report found that a pharmaceutical company’s $1 million donation to a charity for patients with rare diseases can generate up to a $21 million return in drug reimbursements.
In Olive-McCoy’s case, many drug companies contribute to the charity that pays the $955 monthly premium on her private insurance plan. Insurance covers her doctor’s visits, hospitalizations and drugs - while the charity picks up co-pays and other costs associated with her care.
A single bill from March 2017 for one of Olive-McCoy’s drugs to treat acute attacks, made by the company Shire - a longtime donor to the charity that helps her - illustrates how this investment can pay off. The charity covered $250 for Olive-McCoy’s share of the bill. Insurance paid $85,867 for the drug.
If she had been on Medi-Cal, Olive-McCoy would have had access to “all covered medically necessary services and FDA-approved drugs,” said Carol Sloan, a spokeswoman for the California Department of Health Care Services.
In practice, however, patients on public insurance often face barriers to getting the drugs they need and the specialists they want, said Benjamin Sommers, associate professor of health policy and economics at the Harvard T.H. Chan School of Public Health.
“It’s more likely the patient actually gets the medication, and [the drug company] is able to get reimbursement for it - and they wouldn’t have to get the [Medicaid] rebate price,” he said.
Shire said in a statement that it could not comment on reimbursements.
(The true price of drugs is not publicly available because of secret rebates granted to commercial insurers and Medicaid.)
Olive-McCoy’s gratitude is clouded by worry that the company-funded charity might end one day.
“I’m at the mercy of these people. Like, right now they’re being kind and they’re being generous, but what would happen to make them not be?” she said. “It’s very uncomfortable. It’s like there’s one part of you where you’re grateful and you’re so happy… . Then, there’s that anxiety that comes, and you’re worried.”
Patients who have less expensive treatments for more common diseases, such as an EpiPen and arthritis drugs, often find companies willing to help.
Manufacturers give drugs away, run assistance programs to cover co-pays for private insurance or help others, like Olive-McCoy, by making tax-deductible donations to charities that cover out-of-pocket costs and insurance premiums.
But the drug company-funded charities that help maintain high drug prices are most visible with diseases such as HAE, where the needs of a single patient can generate millions in pharmaceutical sales.
“These patient-assistance charities are supported heavily by companies in their own interest - this is not purely about goodwill,” said Steven Joffe, chief of the division of medical ethics at the University of Pennsylvania Perelman School of Medicine.
Joanne de Vries, head of patient services for genetic diseases at Shire, said the company’s relationship with charities is limited to financial support.
“To retain that ethical integrity, Shire and my team are not made aware of how those foundations support those patients,” she said.
Because HAE is so rare - affecting about 6,500 Americans - it has only recently begun to attract attention from the employers and insurance companies that shoulder most of the cost of the drugs. The annual average cost of medications for an HAE patient was more than $2 million, according to a 2017 report by Express Scripts Holding, a company that manages drug benefits for 83 million Americans.
Shire, Pharming and CSL Behring make the complex therapies for the genetic condition; the first was approved in the United States in 2008. Drug companies say the prices of their products reflect development costs, future innovation, and the value they bring to patients who have severe diseases and few treatment options.
Pharming did not respond to questions about its treatment costs, and said it was committed to delivering therapies that make a difference to patients. CSL Behring said in a statement that it works with doctors and payers to make its drugs accessible.
“We believe that a central part of the ongoing industry discussion around pricing should focus on the value medicines bring to patients, caregivers, physicians, society and healthcare systems around the world,” Shire said in a statement. Before the approval of the first drugs, 30 percent of HAE patients died of asphyxiation.
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Olive-McCoy’s life took a sharp turn in 2007, when she injured her hip and knee in an accident at a hospital right before she gave birth to her son, Sekou. The baby was fine, but Olive-McCoy now uses a cane to walk, deals with chronic pain and needs a wheelchair when she leaves the house.
After the injury, Olive-McCoy began to experience alarming facial swelling a few times a week. In one case, her tongue swelled, threatening her ability to breathe and forcing her into the hospital for more than a week. She and her husband, Ryan McCoy, assumed that she just had severe allergies.
Between supporting his wife during a slew of medical problems and caring for their two young children - the couple also have a daughter Alayah, 13 - McCoy couldn’t keep up with the demands of his information technology job and quit - losing their source of income and his employer-sponsored health insurance.
The family moved to Southern California to live with friends. At that time, before the Affordable Care Act became law, Olive-McCoy did not qualify for Medi-Cal. She said she was given the option to pay for Medi-Cal - about $1,000 per month. The family could barely afford diapers, so Olive-McCoy depended on the emergency room for care. She began to ignore calls from collection agents about bills she couldn’t even dream of paying.
The reality sunk in: This disease, whatever it was, would be part of their lives. A few times a week, Olive-McCoy would feel her face or tongue start to swell up. McCoy would pace; Alayah and Sekou would cry and shake.
“She’d have a swollen tongue, and we’d be like, ‘We’re just going to wait this out,’ ” McCoy said.
“We felt kind of like: ‘We don’t have insurance. We’re just going to have to see if we survive - literally.’ “
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In 2009, Olive-McCoy read a blog written by a woman with a rare condition called hereditary angioedema. She felt a shock of recognition. It was her story.
The author connected her with Marc Riedl, a specialist in HAE who is now based at the University of California at San Diego. Friends helped raise the money to pay for an appointment.
With a diagnosis, Olive-McCoy gained allies. She attended a conference organized by the U.S. Hereditary Angioedema Association, a patient advocacy group that receives funding from drug companies.
Drugs for HAE were just becoming available in the United States, and pharmaceutical companies began inviting Olive-McCoy to dinners to learn about them.
In 2012, the drug company Shire began giving her medicine free. That same year, Olive-McCoy got in contact with Patient Services Inc., an independently operated charity funded by drug companies, including Shire, to get help with paying for an insurance plan. (Olive-McCoy had initially heard of PSI at the disease conference.)
PSI provides help to patients with 15 rare diseases and 11 chronic illnesses. Nearly all of its funding comes from drug companies - 97 percent in 2016, according to PSI - including three companies that made HAE treatments. Shire, CSL Behring and Valeant Pharmaceuticals (which made Ruconest, which Olive-McCoy uses, before it was acquired by Pharming) - were donors, according to the charity’s 2016 annual report. In 2016, a third of PSI’s funding helped pay for insurance premiums, according to PSI.
“Absolutely, they donate to us - and I would love if they would donate to us out of the goodness of their hearts,” said James Romano, PSI’s director of government relations. “There’s really not the financial benefit that the accusations suggest; there are a lot of manufacturers who don’t donate, and their patients are helped just as much as patients who do.”
In Olive-McCoy’s case, PSI paid the premium on a high-risk-pool insurance plan run by the state, and once the insurance kicked in, it paid for her drugs.
In 2014, as the Affordable Care Act took effect, the charity enabled Olive-McCoy to buy a private health plan that more generously covered her specialists and drugs.
In addition to Olive-McCoy’s health insurance, PSI pays for a $75,000 fund for her various medical expenses and $1,000 for travel expenses in 2018. (McCoy and the children do not have health insurance.)
The drug companies also forge financial relationships with doctors and universities, and patients such as Olive-McCoy.
She and her husband were recently flown to Dallas to serve on a patient and caregiver advisory board for Pharming. They received an honorarium, and Olive-McCoy is training to become a paid patient speaker for the company.
“There’s a lot of relationship building and less tangible support, if you will,” Joffe said. “And that may play a different function; it’s all to support patients to continue to use the drugs, and in some cases to sort of encourage patients to become advocates for the drugs, with other patients, so they become ambassadors.”
Drug companies and the HAE patient advocacy group also have pledged $4.6 million for a research center at the University of California at San Diego. Its clinical director is Riedl, Olive-McCoy’s physician, who has conducted clinical trials funded by drug companies, including on drugs Olive-McCoy takes.
“I do have, as do my colleagues, a lot of expertise. We’ve spent most of our careers studying and taking care of these patients, and so it’s an effort to try to contribute at some level to the advances that are being made,” Riedl said.
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In the family’s sparsely furnished bungalow, the big bills that insurance pays on Olive-McCoy’s behalf seem surreal: $34,000, $68,000 and $86,000 for drugs; hospital bills for $525,000 and $1.2 million.
“I’m very expensive,” Olive-McCoy said. “By the end of the year, our pharmaceutical bill, meds alone, can be $1 million, can be $2 million - without even trying.”
Insurers argue that charities like the one covering Olive-McCoy’s care may help their drug company donors by steering patients into plans that are more lucrative for the companies. The insurers argue that charities should focus on the financially needy - without giving special consideration to patients with rare diseases.
“People who are eligible for public programs (eg. Medicare and Medicaid), which may offer additional benefits and services, should not be inappropriately steered into the commercial insurance market to generate greater reimbursement,” Kristine Grow, a spokeswoman for America’s Health Insurance Plans, wrote in an email. The system of third-party payments, she added, “skews the risk pool and imposes higher costs for all consumers.”
Patients and the charities that help them find those arguments offensive and say the critics don’t take into account whether the public health programs would be sufficient for a patient’s complicated care. They point out that charities do not choose the patients’ drugs or insurance plans.
“The insurance industry is looking for every way not to cover these people,” said Romano, of PSI. The charity said in a statement: “PSI does not steer patients to choose a specific type of coverage.”
Riedl said he has concerns about drug prices, too - although he spends much of his time fighting with insurance companies.
“A lot of my personal frustration, on a day-to-day basis, is with payers, because at the end of the day, they’re standing in the way of patients getting treated,” he said. “We also spend a lot of time sort of advising, or at least giving unsolicited advice to, pharmaceutical companies - that we need to keep costs in mind. Because it makes it really difficult for patients to use these medicines when they’re so costly and the payers won’t approve them.”
The first independent patient charities were founded by advocates about three decades ago to help patients pay for expensive drugs. They were supposed to be a temporary solution, said Dana Kuhn, a hemophilia and HIV patient who founded PSI.
PSI is one of nine main charities that receive virtually all of their funding from drug companies. The charities do not fully disclose their donors, in line with federal rules.
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This form of charity has grown explosively, from providing $2.3 million to patients in 2001 to $1.4 billion in 2015, according to an analysis published in Tax Notes, a publication for tax professionals. PSI helped about 500 patients with individual insurance premiums last year.
Manufacturers also run their own charities, providing free drugs to people in need - an enterprise that has ballooned from $378 million in 2001 to $6.5 billion in 2015.
Experts say the growth of both types of charities stems from the increase in expensive rare-disease drugs, the growth of insurance plans that push costs onto patients, and the pharmaceutical industry’s realization that it can help patients, stem criticism and support sales, all at once.
“This allows the system as we know it to exist, and it allows the prices of these therapies to be so high,” said Rena Conti, a health economist at the University of Chicago. “Essentially, only when you have patients either dying in the street or complaining they couldn’t get their medication, then that creates public pressure. This is essentially a way of neutering that political engagement.”
The charities receive strict oversight from the Department of Health and Human Services Office of Inspector General. But Maria Hardin, who was vice president of patient services at the National Organization for Rare Disorders until 2010, said that charities like NORD had to rebuff pressure from drug companies trying to use them to gather more information about patients than they were allowed under the law.
“The pharmaceutical companies would like to utilize this as a way of measuring how many pills they’re selling. They have very - I don’t want to say slick, just ways of ingratiating themselves to the charities, saying … ‘Is there any way to let us know how many of our patients taking our drugs are in your program?’ ” Hardin said, adding that she did not provide that information. “They just wanted to find an easy way to extrapolate that information, for their marketing.”
One charity, Caring Voice Coalition, stopped providing funding to patients for a year after the HHS Office of Inspector General found that it had been giving drug-company donors patient-specific data that would allow them to figure out how their donations were driving drug sales.
Caring Voice Coalition President Greg Smiley said in an email that “CVC has tackled past deficiencies head-on.”
PSI’s operating budget dropped 17 percent this year, to $83 million. The Justice Department, in documents related to a $35 million settlement reached with Aegerion Pharmaceuticals last year, alleged that the company had “induced purchases” of its cholesterol drug using a PSI co-pay program. The U.S. Attorney’s Office for the District of Massachusetts said that PSI “promoted its ability to create a ‘reimbursement vehicle’ ” in lieu of giving away the drug.
PSI denied the DOJ allegations and noted that it was not charged with wrongdoing.
“PSI is an access and affordability non-profit charity for insured patients with rare chronic diseases who cannot afford premiums and co-payments, who are not eligible for free drugs, who have no other options, and who otherwise would face financial ruin,” the charity said in a statement. “We are not a health services provider, and we do not set drug prices.”
The nonprofit organization has been fighting government efforts to restrict its communications with donors and recently sued the U.S. government, alleging that such federal restrictions violate its free-speech rights and hurt its ability to help patients.
“Since this restriction has been put in place, we haven’t been able to put in any new programs for publicly-insured patients,” said Neil Millhiser, general counsel for PSI.
For Olive-McCoy, debates about the ethics of patient charities are a luxury for healthy people.
Her family’s main concern is keeping her healthy. Around dinnertime on Mondays and Thursdays, Alayah reminds her mom to use her numbing cream, to ease the pain from the infusion she’ll need in a few hours.
The girl who loves to draw and giggle with her brother turns serious, preparing the infusion with clinical precision. She snaps the caps off two vials - one full of a powder and the other sterile water - and mixes them with a syringe. Sekou lays out ice packs at the base of the bed and drums them with his hands, while McCoy fixes a hot water bottle for his wife’s back.
Olive-McCoy browses for the show they should watch tonight. They finished “So You Think You Can Dance,” so they move on to Korean dramas.
Once the powder is dissolved, Alayah draws the drug back up through the syringe - $5,700 in her hand.
Once they’re ready, and the show is queued up, they snuggle into bed. Alayah attaches the syringe to the medical tubing that will send the drug into her mother’s body and slowly begins pressing down, a little at a time.