By Jim Hoover, Burr & Forman LLP
On January 15, 2025, the Office of Inspector General (OIG) posted a favorable Advisory Opinion regarding a program to provide free access to a pharmaceutical product to patients who meet financial and other eligibility criteria and who do not have adequate coverage for the product. The Advisory Opinion is 25-01 and can be found here https://oig.hhs.gov/compliance/advisory-opinions/25-01.
An OIG advisory opinion is a legal opinion that provides guidance on how federal fraud and abuse laws apply to certain business arrangements. The advisory opinion is designed to provide advice on how to comply with federal laws, regulations and guidelines and protect the requestor from administrative sanctions if they comply with the terms of the advisory opinion.
The requestor, a pharmaceutical company, sought an advisory opinion regarding a program to provide certain patients with free access to a pharmaceutical product that has limited coverage by federal health care benefit programs. Specifically, the requestor asked whether the arrangement constitutes grounds for the imposition of sanctions under the CMP provision at § 1128A(a)(5) of the Social Security Act related to the federal anti-kickback statute; the CMP provision at § 1128A(a)(5) of the Act prohibiting inducements to beneficiaries; or the exclusion authority at § 1128(b)(7) of the Act, as it relates to the commission of acts described in both the federal anti-kickback statute and the beneficiary inducements CMP.
The product is intended for initiation in patients with mild cognitive impairment or mild disease-related dementia and confirmed presence of amyloid pathology. The product targets and affects the underlying disease process rather than simply managing the symptoms. Consistent with the product’s prescribing information, patients prescribed the product receive intravenous infusions once every 2 weeks for approximately 1 hour in an outpatient setting. The product may be infused in the treating physician’s office, outpatient locations with some affiliation with the treating physician, or independent infusion centers that are not affiliated with the treating physician who prescribes the product.
While several drugs are available to treat the symptoms of the disease, only two other drugs, both administered by infusion and reimbursable under Part B, have been available to treat the underlying disease. One of the products has been discontinued, but two other products are under development. The requestor is developing a subcutaneous formulation of its product, which would be reimbursed under Part D. It certified that another pharmaceutical company is developing a product intended for the treatment of the disease, which the requestor believes will be reimbursed under Part D.
The requestor implemented the arrangement to provide the product at no cost to patients, including enrollees of federal health care benefit programs, who meet the arrangement’s eligibility criteria. The decision to supply free product is made based on a reasonable, uniform, and consistent assessment of financial need. To qualify for free product under the arrangement, a patient must: reside in the U.S.; be at least 18 years old; be prescribed the product for an on-label indication; be insured, but with no insurance coverage for the product, or have Medicare coverage for the product but attest that they are unable to afford their out-of-pocket costs associated with the product; and have a household income equal to or below 500% of the federal poverty level. A patient must apply to the requestor for assistance and work with the patient’s treating physician to complete the application for assistance. Patients participating in the program are free to change physicians or infusion providers at any time, and eligibility is not contingent on past, present, or future purchases of the product. Patients are not required to apply for federal health care programs as a prerequisite for eligibility. Further, patients must make certain certifications that they will not submit a request for payment for the free product to any payor and that the costs associated with the free product will not count toward any applicable out-of-pocket costs. Physicians must also certify in writing that they will not submit a request for payment for the free product to any payor or from the patient.
The OIG concluded that, although the arrangement would, if the requisite intent were present, generate prohibited remuneration under the federal anti-kickback statute, the OIG would not impose administrative sanctions on the requestor in connection with the arrangement. Further, the OIG concluded the arrangement does not constitute grounds for the imposition of sanctions under the beneficiary inducements CMP.
Jim Hoover is a health care trial and compliance Partner at Burr & Forman LLP practicing exclusively in the firm’s health care group. Jim may be reached by telephone at (205) 458-5111 or by E-mail at jhoover@burr.com.