Laura Hoey, Ropes & Gray litigation & enforcement partner, examines the increased enforcement of donations from drug manufacturers to patient assistance charities.
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Health care costs and prescription drug prices are in the headlines – it seems like every day. In recent months, government enforcers, regulators, and even Congress, have focused in on one particular aspect of the high cost of prescription drugs, and that involves donations from drug manufacturers to charities that offer patients assistance with meeting those high costs.
These charities exist because manufacturers generally cannot provide assistance directly to federal beneficiaries, like Medicare patients, without potentially running afoul of the Anti-Kickback Statute. For over a decade now, the Office of the Inspector General for the Department of Health and Human Services has recognized the existence and the importance of these charities and has acknowledged, in guidance regarding these donations, that drug manufacturers will likely be the primary donors to them. But drug manufacturers who are making these donations or considering making these donations need to be aware of how OIG’s guidance is being interpreted.
There are two primary risk areas that should be top of mind for drug manufacturers:
- The first is in maintaining the requisite independence and separation from the charities. The government has been investigating a conduit theory of liability, meaning that the charity cannot just be a conduit for the manufacturer to get funding directly to its patients. In order to steer clear of the Anti-Kickback Statute, manufacturers need to make sure they follow OIG guidance on the level of permissible interaction and communication between manufacturer donors and charity organizations.
- The second risk area relates to data and the use of data. OIG guidance allows manufacturers to receive aggregate, non-patient specific data from charities, but in this world of big data, there are countless other sources of data that could allow a manufacturer inadvertently to run afoul of OIG’s restrictions on what drug manufacturer donors may know about how their money is being used by a charity.
So, for manufacturers, in this enforcement environment, what questions should you be asking?
- First, are you making donations to charitable organizations? And if you are, who's involved in the process? Who is having communications with the charity? Who's having input into the amount of funding that's provided? And, are all of the people involved sufficiently independent and trained on the relevant OIG guidance?
- Second, do you know what your company is getting in exchange for its donation? Does it include data? And if so, what kind of data? Who has access to the data, and how are they using it? And, what data is being used to determine how much to donate and when to donate?
Several recent False Claims Act settlements on this issue have involved Corporate Integrity Agreements, or CIAs, which contain the most recent and updated views from the OIG on the kinds of controls and monitoring that need to be in place to stay within the bounds of their guidance. The bottom line is that it is possible to continue to donate to these charities, which play a very important role in expanding patient access. Just be sure you're asking the right questions, and putting proper training and guardrails in place.