Introduction

The Department of Health and Human Services Office of Inspector General (OIG) has offered several new points of guidance for medical device manufacturers in the process of designing patient subsidies for clinical research studies. Released on June 4 2015, Advisory Opinion 15-07 indicates that clinical studies involving subsidies paid to patient participants are less likely to violate the federal Anti-kickback Statute or the federal prohibition on beneficiary inducements if:

  • the subsidies serve to protect the study's methodological integrity;
  • the study is designed in consultation with the Centres for Medicare and Medicaid Services (CMS); and
  • the study delineates specific patient enrolment criteria and physician protocols.

Proposed arrangement

The requestor, a medical device manufacturer, developed a clinical study involving use of its specialised instrument in a spinal procedure called percutaneous image-guided lumbar decompression (PILD). The study was designed in consultation with the CMS following an announcement from the CMS that it would allow for coverage of the manufacturer's procedure under the Coverage with Evidence Development Programme. According to the advisory opinion, the study was designed to test the effectiveness of the manufacturer's instruments in the PILD procedure. The study would consist of a controlled double-blind trial, with 80 patients assigned to a treatment group and another 40 patients assigned to a control group for which no therapeutic treatment was performed (characterised by OIG as "sham procedures").

The requestor proposed to provide two types of subsidy to patients participating in the study:

  • It proposed to cover the co-payments for all Medicare beneficiaries enrolled in the study on the grounds that leaving the treatment group to cover their own co-payments would compromise the study's design by revealing which patients were in the treatment group and which were in the control group.
  • It proposed to pay the costs of the PILD procedure for any control-group participant who was deemed a failure at the end of the study, but who still wished to undergo the procedure. The requestor justified this second set of subsidies on the grounds that they were necessary to incentivise adequate levels of patient participation.

OIG analysis

The OIG concluded that the proposed arrangement did not raise a significant risk of violating the Anti-kickback Statute or the beneficiary inducement prohibition, finding as follows:

  • The OIG took comfort from the fact that the study was in line with CMS policy goals because it was designed in consultation with the CMS under the Coverage with Evidence Development Programme and because the results would assist the CMS in determining whether PILD is reasonable and necessary for purposes of eligibility for broader Medicare coverage.
  • The OIG reasoned that the purpose of the subsidies was not to induce or reward healthcare referrals, but rather to protect the study's integrity and encourage adequate levels of patient participation. However, the OIG did strongly suggest that the arrangement may have violated the Anti-kickback Statute if the manufacturer had intended the subsidies to induce or reward such referrals.
  • The proposed arrangement would not operate in conjunction with any other arrangement with patients, physicians or other parties in a manner resulting in referrals or induced use of the PILD procedure for non-study purposes.
  • The OIG indicated that the enrolment criteria and physician protocols detailed in the study, as well as the limitation of subsidies to a small, pre-determined number of patients, minimised the risk of increased costs to the federal healthcare programmes.

In its analysis, OIG did not specifically address the federal prohibition on routine waivers of co-payments.

Designing subsidy programmes for clinical studies

The advisory opinion suggests that there are pathways for medical device manufacturers to design subsidies for clinical studies reimbursed by the federal healthcare programmes without violating the Anti-kickback Statute or beneficiary inducement prohibition. First, it is critical that any subsidies provided serve the objectives of the study itself, such as by protecting the integrity of the study's methodology or incentivising an appropriate level of patient participation, rather than serving as impermissible inducements to principal investigators, their institutions or patients. Further, the OIG appears to view favourably consultation with and subsequent approval of the study from the CMS, certainly under the Coverage with Evidence Development Programme, but perhaps under other circumstances as well. Finally, the OIG appears to have a positive view of subsidy programmes in which the manufacturer has thoughtful and appropriate patient enrolment criteria as well as participating physician protocols.

While the OIG may continue to scrutinise subsidies paid to clinical study patients going forward, Advisory Opinion 15-07 at least provides some points of guidance that should inform the design of any future subsidy programmes.

For further information on this topic please contact James Stansel at Sidley Austin LLP' s Washington DC office by telephone (+1 202 736 8600) or email (jstansel@sidley.com). Alternatively, contact Meenakshi Datta or Catherine Y Starks at Sidley Austin LLP's Chicago office by telephone (+1 312 853 7000) or email (mdatta@sidley.com or cstarks@sidley.com). The Sidley Austin website can be accessed at www.sidley.com.

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