On Feb. 17, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 23-01 approving a pharma company patient support arrangement. The requestor was a pharma company that manufactures a regenerative tissue-based drug to treat pediatric patients with an ultra-rare primary immunodeficiency disorder requiring significant utilization of diagnostic, surgical, and medication services.
The drug, which must be surgically implanted in the muscles of the patient’s thigh, is currently the only treatment available to rebuild the immune system of individuals who have the disorder. Because it’s made out of thymus tissue provided by donors, the drug must be delivered within three hours after it’s manufactured. There’s only one FDA-approved manufacturing site and one treatment center that performs the surgery. Patients must come to the site five to 11 days before the procedure to undergo testing, clinical evaluation, and immunosuppressive therapy. They then must then remain as inpatients for two to seven days after implantation.
Proposed Arrangement
The pharma company wanted to offer benefits making it possible for eligible patients who don’t live near the center to receive the drug, including:
- Round-trip medical, as opposed to commercial, flights for the patient and up to two accompanying caregivers
- Ground ambulance travel to and from the airport
- Modest lodging in a single hotel room for up to $150 per night, if charitable housing isn’t available;
- Coverage of up to $50 in out-of-pocket expenses per day for one caregiver or $100 per day for two caregivers
To qualify, patients diagnosed with the disorder must demonstrate financial need, live at least two driving hours away from the treatment site and have either no or “insufficient” insurance coverage.
OIG Determination
Even though the beneficiary inducements could constitute illegal remuneration under the Anti-Kickback Statute, the OIG said it wouldn’t take enforcement action against the company in connection with the arrangement. The key factors weighing in their decision:
- The arrangement “facilitates safe access” to the drug for patients that can’t afford medical or ambulance travel and can’t safely travel long distances by car or commercial airline;
- The drug is a one-time, potentially curative treatment, which makes the arrangement less problematic than one involving benefits for an initial dose of a drug to induce patients to keep purchasing it;
- The fact that the disorder is so rare and the drug is manufactured and administered in only one location minimizes the risk of the arrangement’s resulting in “interference with clinical decision-making, overutilization, or inappropriate utilization,” or of a healthcare professional’s realizing a financial benefit from diagnosing the disorder and prescribing the drug;
- The arrangement is unlikely to inappropriately increase federal healthcare program costs, especially since the drug is the only potentially curative treatment option for the disorder;
- Patients must meet clear medical and financial criteria to be eligible for assistance under the arrangement, including no or insufficient insurance coverage;
Takeaway
The arrangement in AO 23-01 is similar to those that the OIG approved in previous advisory opinions involving patient assistance for travel, lodging, and meals, including AO 21-08, AO 20-02, and AO 20-09. In each case, the drug was a one-time, potentially curative treatment and/or helped to facilitate increased access to care. What made the arrangement in AO 23-01 even more compelling than the ones in the previous advisory opinions is that there was only one site that could manufacture and administer the drug.
Even so, the pharma company still had to implement safeguards to reduce the potential risk of illegal remuneration to make the arrangement palatable to the OIG, including:
- Limiting the pool of eligible patients to those who lived more than 2 hours away, thereby reducing the risk of overlap between the prescribing physician and surgeon performing the implantation
- Agreeing not to advertise the availability of assistance under the arrangement
- Promising that it would require patients, caregivers, flight vendors, and ground transportation vendors to agree not to seek reimbursement from Medicare or other federal healthcare programs for any of the costs covered by the pharma company under the arrangement
Although AO 23-01 involves a pharma company, the basic principles could still apply to lab testing arrangements. That’s particularly true of the agreement not to advertise and certify that vendors involved in the arrangement won’t seek federal healthcare reimbursement for the services provided to patients under the arrangement.