The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) recently issued a legal opinion guide to support the operation of 12 disease-specific disease foundations sponsored by drug manufacturers. These foundations are designed to help patients pay for the high CoPay. New insights from the OIG highlight the importance of Patient Assistance Programs in mitigating rising drug costs.
These disease-specific foundations are all non-profit organizations that are funded by a single drug manufacturer. The funders of each foundation also manufacture or promote drugs to treat the same diseases. These foundations are widely publicized in the community on a non-profit basis, and patients can apply to them for financial assistance for specific treatments. The Foundation does not restrict patient assistance to specific physicians or pharmacies, nor does it ask patients about the medications or treatments they need, and only pays for out-of-pocket medications for specific diseases.
The U.S. Anti-Kickback Statute prohibits anyone from offering, paying, soliciting, or receiving anything in return for a patient’s referral. If a violation of this law is found, the U.S. Department of Health and Human Services Inspectorate (OIG) can impose civil penalties on violators. In particular, if the investigation reveals that the violator offered, transferred, or received any return in order to influence the beneficiary to choose a particular physician or drug supplier, the violator may be found to have violated the law even if the violator did not pay money directly to the beneficiary.
Anti-Bribery Act: Prohibits any person from knowingly offering, paying, soliciting, or accepting remuneration to induce or in return to refer an individual to services covered by a federal health care plan. This includes the conduct that influences the beneficiary’s choice of a particular provider, practitioner or provider.
Civil Penalties (CMPs): A fine can be imposed on anyone who provides or transfers compensation to a beneficiary of Medicare or a state health care plan, whether or not it actually affects the beneficiary’s choice, as long as the violator knew or should have known that it could affect the beneficiary’s choice.
According to the OIG, such arrangements may involve anti-bribery laws, as drug manufacturers indirectly provide feedback to potential drug patients of their company’s products through non-profit organizations. However, as long as this arrangement does not affect the patient’s choice of physician or pharmacy, no civil penalty will be triggered.
The OIG emphasizes the following features to reduce the risk of non-compliance:
- A fund based on an established definition of disease: ensures that funds are spent on appropriate disease treatment.
- Assistance that does not take into account specific treatment options: Avoid favoring a particular drug or treatment.
- Limit information sharing with donors: Reduce potential conflicts of interest.
- Financial Eligibility Process: Ensures that aid is provided on a need-based basis and can be audited.
These measures help to ensure the transparency and legitimacy of the operations of such foundations, while providing the necessary financial support to patients in need without undue influence or conflicts of interest.
The OIG noted that these foundations only provide financial assistance for rare diseases and that part of the funding is for non-drug co-pay programs and services that can make a significant difference in the lives of patients. However, the OIG’s legal opinion is only valid until December 31, 2026, as the U.S. Congress recently passed a bill that would revisit the Medicare Appendix D copay obligation, which could change the way the risk of fraud and abuse is assessed. As a result, the OIG has decided to set the validity of this opinion at two years to ensure that the nonprofit organization has enough time to gather the necessary data to support these foundations.
These OIG administrative guidelines are instructive for Taiwan’s health insurance to face the pressure of new drug payment, and can be used as a reference to improve the efficiency of the health insurance system and cope with the challenges of new drug treatment costs.
