pLOG

2024-07-12

U.S. OIG Updates Compliance Management Insights for Pharmaceutical Foundation-Sponsored Patient Support Programs

 

The Office of Inspector General (OIG) of the U.S. Department of Health and Human Services recently issued a legal opinion supporting the operations of 12 disease-specific foundations sponsored by drug manufacturers. These foundations aim to assist patients in paying high drug copayments. OIG's new guidance highlights the importance of Patient Assistance Programs (PAPs) in mitigating the rise in drug costs.

These disease-specific foundations are non-profit organizations funded by a single drug manufacturer who also manufactures or promotes treatments for the same diseases. They operate as non-profits and widely advertise in communities where patients can apply for financial assistance for specific treatments. The foundations do not restrict assistance to specific physicians or pharmacies, nor do they inquire about the patient's preferred medication or treatment method; they focus solely on covering copayments for self-pay medications related to specific diseases.

Under the U.S. anti-kickback statute, it is illegal to offer, pay, solicit, or receive any form of remuneration in exchange for patient referrals. If violations are found, OIG can impose civil fines on offenders. Specifically, if an investigation reveals that someone provided, transferred, or received remuneration to influence a beneficiary's choice of specific physicians or drug suppliers, even if no direct payments were made to beneficiaries, it may still be considered unlawful.

The anti-kickback statute prohibits anyone from knowingly offering, paying, soliciting, or receiving any remuneration to induce or reward referrals for services covered by federal healthcare programs. This includes actions that influence a beneficiary's choice of specific providers, practitioners, or suppliers.

Civil Monetary Penalties (CMPs) can be imposed on anyone who provides or transfers remuneration to Medicare or Medicaid beneficiaries, regardless of whether it actually influences the beneficiary's choice. Violators can be penalized if they knew or should have known that their actions could influence the beneficiary's choice.

The Office of Inspector General (OIG) has highlighted that arrangements involving pharmaceutical manufacturers providing substantial funding to nonprofit organizations, which in turn assist potential patients with copayments for their company's products, may implicate the anti-kickback statute. However, these arrangements may avoid civil monetary penalties as long as they do not influence the patient's choice of provider or pharmacy.

To mitigate the risk of illegality, OIG emphasizes certain characteristics:

1. Disease-Specific Definition: Funding is limited to organizations focusing on specific disease states, ensuring appropriate use of funds.
  
2. Non-Specific Treatment Assistance: Aid is not contingent on specific treatment regimens, avoiding favoritism towards particular drugs.

3. Restriction on Donor Information Sharing: Limits on sharing information with donors to mitigate potential conflicts of interest.

4. Financial Need Assessment Process: Ensures aid is provided based on demonstrated need and undergoes auditable review processes.

Additionally, these foundations only provide financial assistance for rare diseases, where they can offer life-changing support to patients. Some of the funding may also be allocated to non-drug copayment items and services.

OIG notes that this guidance is effective only until December 31, 2026, due to recent legislative changes. The U.S. Congress has passed legislation to reconsider copayment obligations under Medicare Part D, which may alter the assessment of fraud and abuse risks associated with these arrangements. Therefore, OIG has limited the validity of this opinion to two years post-legislation to allow nonprofit organizations sufficient time to collect data supporting the needs these foundations address.

These administrative guidelines from the OIG offer inspiring insights for Taiwan's NHI system facing pressures related to new drug reimbursements. They can serve as a reference for enhancing the efficiency of the health insurance system and addressing challenges related to the costs of new drug treatments.