Multiple pharmaceutical companies have disclosed the receipt of subpoenas from various U.S. Attorney’s offices, including Massachusetts and the Southern District of New York, related to the companies’ patient assistance programs. Patient assistance programs also have been the subject of recent Congressional inquiries related generally to the increasing price of certain prescription drugs.

Patient assistance programs are internal or external programs that provide financial support for a company’s product, including free product coupons, copayment assistance, or grants to independent charitable foundations that provide assistance to financially needy patients. Patient assistance programs have been criticized by some for steering patients to more expensive, brand name products rather than less costly alternatives, such as generics.

Life sciences companies that operate an internal patient assistance program and/or provide grants to an independent charitable foundation must re-evaluate their policies, procedures and processes in light of the recent OIG special advisory bulletin and updated OIG advisory opinions related to patient assistance programs. They also should train and closely monitor their employees or committees responsible for reviewing and approving patient assistance program grants.

Additionally, companies should scrutinize the independent charitable foundations to whom they provide grants. In particular:

• Diversify. Life sciences companies should be careful about overly limiting the number of independent charities to whom they make grants. The OIG has expressed concern regarding “earmarking” funds for a company’s products or providing direct or indirect control or influence.
• Scrutinize. Life sciences companies should closely review and evaluate the independent charitable foundations to whom they intend to make grants. This includes evaluating the foundation’s patient assistance criteria to ensure that its policies and processes do not favor donor companies’ drugs over other available products or patients with a certain type of insurance.

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