VA charity

A very vicious cycle. I wouldn't be surprised if more drug firms signed up for these programs. For a 2 million $ expense, they get goodwill from the patients and 29 million in revenue. And some of the drugs have a 90 % profit margin.

By Donating Money, Firms
Keep Patients Insured
And Medicine Prices High

Mrs. Gushwa's $2, 000 Pills

By GEETA ANAND
Staff Reporter of THE WALL STREET JOURNAL

Nancy Oliva hadn't paid much attention to her insurance plan's requirement that she pay half the cost of prescription drugs. Then the cashier at ShopRite told her she owed $636 for seven pills.

Ms. Oliva, 60 years old, was diagnosed with a rare type of brain tumor earlier this year. She was prescribed a new drug to be taken in combination with radiation. The retail price of a one-week supply of the pill, called Temodar, is $1, 272.

Ms. Oliva, who earns about $40, 000 a year managing a clothing store in Long Beach Island, N.J., pulled out her American Express card that day in September and paid, unsure where she was going to find the money for the next week's supply. Fortunately, the nurse at her doctor's office found help for her from a charity, Patient Services Inc., which picked up her drug co-payments - $3, 800 for a six-week course of treatment.

The twist: The money for her co-payments came from Schering-Plough Corp., the drug's maker.

To cope with rising medical costs, insurers are requiring patients to pay higher premiums and co-payments for drugs. While poor uninsured patients can often get expensive medicine free from drug companies, people with insurance are increasingly finding it difficult to afford these drugs. In response, drug companies are giving money to charities that are specifically set up to help patients pay such costs.

Under this support system, drug-company money keeps patients insured - and keeps insurers paying for the high-priced medicine.