The past three months have seen a flurry of advisory opinion activity from the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG). The majority of this activity focuses on patient assistance programs (PAPs) as donors and organizations continue to have questions about OIG’s most recent PAP guidance. While none of these opinions or modifications are dramatically new on their face, together they provide valuable insight into the types of facts that can mitigate the OIG’s general concerns with tailored disease funds.
Typically, sponsored by pharmaceutical manufacturers and/or independent charity organizations with industry donors, PAPs provide financial assistance or free prescription drugs to low income individuals. Some PAPs are also structured to provide assistance to patients with a specific disease, like cancer or Crohn’s disease. As PAPs have the potential to be used by manufacturers to subsidize the purchase of their own products, or to improperly steer a patient’s drug selection, they can trigger scrutiny under the federal Anti-Kickback Statute (AKS) and Beneficiary Inducement Civil Monetary Penalty (CMP), among other laws. Not surprisingly, the OIG is more comfortable with bona fide charitable programs that are not drug-specific and that reflect other characteristics demonstrating a broad patient focus, rather than those reflecting a drug or pharmaceutical manufacturer focus.
Historically, the OIG has treated PAPs as important safety nets for patients who face chronic illnesses and high drug costs. The OIG issued a special advisory bulletin (SAB) in 2005 confirming that PAPs could help ensure patients had access to and could afford their medically necessary drugs. The OIG’s guidance evolved with its May 2014 SAB, which addressed the growing trend of independent charity PAPs establishing or operating specific disease funds that limit assistance to a subset of available products. The OIG articulated a concern with such PAPs, and indicated that it would view such programs as having a higher baseline risk of abuse when their assistance was limited to only a subset of available FDA-approved products for treatment of the disease. The OIG advised PAPs to define disease funds in accordance with widely recognized clinical standards and in a manner that covered a broad spectrum of products and manifestations of the disease (e.g., without reference to specific symptoms, drug stages, treatment types, severity of symptoms or other “narrowing” factors).
Consistent with this guidance, the OIG began issuing new advisory opinions and modifications of previous opinions in January 2015. The OIG’s opinions and modifications posted in the past three months are also consistent with this standard, but importantly add nuanced factors and exceptions that appear to show a more refined stance on specific disease funds. In December, the OIG posted a modification of Advisory Opinion 07-11, concerning a PAP that provided support for patients experiencing a specific symptom of cancer. In January, the OIG posted two new advisory opinions that addressed a PAP tailored to support patients with two specific diseases (a type of cancer and a type of chronic kidney disease) and a PAP providing support to needy patients with Stage 3 or Stage 4 of a specific disease, respectively. Also in January, the OIG posted a modification of Advisory Opinion 04-15, which addressed a PAP that maintained a disease fund limited to patients with certain metastatic cancers. While all of these specific disease funds may appear inconsistent with the OIG’s 2014 SAB, in each instance the OIG found that the tailored funds presented a low risk of abuse and merited a favorable opinion given the safeguards each employed.
In its Modification of Advisory Opinion 04-15, the OIG noted two factors that minimized the risk that the tailored disease fund could be leveraged by donors. First, the specific symptom of cancer was treatable by 62 different drugs made by 26 different manufacturers, so the program would not be supporting only one specific manufacturer or drug by tailoring its assistance to patients with the symptom. Second, and most importantly to the OIG, the PAP would not limit assistance through the fund just to drugs to treat that symptom; instead, the PAP would provide assistance for all medications prescribed for the qualifying patient’s underlying cancer and related symptoms. By certifying that the PAP would extend its support to underlying and related medical needs of patients with this symptom, the disease fund essentially agreed to expand the practical impact of the fund.
This “broadening” of support from otherwise narrowly defined disease funds can also be seen in the OIG’s other recent advisory opinions on the subject. In Opinions 15-16 and 15-17, for example, the OIG noted its favorable opinion was based in part on the PAPs’ representations that there were several different drugs made by various manufacturers currently available to treat each of the specific diseases and that the PAPs would, at a minimum, assist patients with all FDA-approved drugs to treat each disease (and, for the fund supporting patients with Stages 3 or 4 of the disease, would not limit the financial assistance to drugs expressly approved for advanced stages of the disease). In its Modification of Opinion 07-11, the PAP also noted that its support would not be limited to drugs expressly approved for the metastatic stage of the cancer. These opinions also include PAP certifications that if any of the PAP’s future disease funds would result in supporting only one FDA-approved drug treatment or one manufacturer, the PAP will also support the other medical needs of patients with the disease, including co-payment support for all prescription medication prescribed for the management and treatment of the patient’s disease (like pain and anti-nausea medications).
While the OIG continues to reiterate the potential risks posed by disease funds that are tailored to specific symptoms, severity of symptoms, method of drug administration, stages of a disease, or types of drug treatment, its recent opinions and modifications illustrate several exceptions to this general position. This recent flurry of OIG activity may be a good prompt for organizations with PAPs to review any specific disease funds in light of these most recent opinions.