The OIG released an advisory opinion stating that it would not impose administrative sanctions against two drug manufacturers or their affiliated pharmacy for offering a free 30-day supply of an antineoplastic drug to patients who experience a delay in the insurance approval process.
Although the advisory opinion addresses the provision of a limited free supply of a unique drug, the approval may signal a willingness to consider other forms of patient assistance related to prescription drugs. For example, although coupons offered by drug manufacturers carry different risks, as we have previously briefed, these benefits could potentially be structured to present sufficiently low risk that the OIG would agree not to impose sanctions.
Arrangement under review
- Under the proposed arrangement, the drug manufacturers, through an affiliated pharmacy, would provide a free 30-day supply of the drug to eligible patients.
- An eligible patient must: (1) be a new patient; (2) have received a prescription for the drug; (3) have an on-label diagnosis; (4) be insured; and (5) have experienced a delay in a coverage determination of at least 5 business days.
- If the coverage delay persists, or the patient is the process of appealing a coverage denial, the patient may be eligible for one 30-day refill of the drug.
Assessment of limited risks
- The OIG advised that, although the proposed arrangement could potentially generate prohibited remuneration under the Anti-Kickback Statute and constitute inducement to federal healthcare beneficiaries under the Civil Monetary Penalties law, the OIG would not impose administrative sanctions for the arrangement because it posed a low risk of fraud and abuse.
- The OIG gave five reasons for its decision related to the Anti-Kickback Statute:
- The risk of overutilization is limited because the program is only available for on-label uses of a drug that treats specific types of cancer. Further, if the patient’s insurer provides coverage within the 5 business days, the patient assumes responsibility for the standard cost-sharing amounts imposed by the insurer.
- The program is not actively marketed to patients; and patients and prescribers assume that the patient’s insurance will cover the drug, and the patient will be responsible for standard cost-sharing amounts.
- Prescribers receive no financial benefit under the program.
- There is a low risk that the program will induce beneficiaries to obtain federally payable prescriptions from the dispensing pharmacy as the dispensing pharmacy does not dispense to the general public, but rather dispenses only for certain client programs such as the one proposed.
- There is no cost to federal healthcare programs. Part D Plan sponsors will be notified that no claim should be submitted to the sponsor when a Part D beneficiary receives a free supply of the drug.
- With respect to the Civil Monetary Penalties (CMP) law governing beneficiary inducements, the OIG explained that the arrangement does not trigger the statute because drug manufacturers are not “providers, practitioners, or suppliers” for purposes of the CMP. The OIG explained that, while the dispensing pharmacy could be a “supplier,” it does not dispense drugs to the general public outside of certain client programs. As such, the free 30-day supply offered under the proposed program would not likely induce beneficiaries to select the pharmacy to supply any other products paid for by federal or state healthcare programs.
Read OIG Advisory Opinion No. 15-11 (posted August 12, 2015).
*Savannah Wiseman is admitted only in Texas. Practice supervised by principals of the firm admitted in the District of Columbia.