On June 17, the U.S. Department of Health and Human Services Office of Inspector General (OIG) posted Advisory Opinion 24-03, approving an arrangement under which a pharmaceutical manufacturer provides travel, lodging, and other assistance to financially needy patients undergoing treatment with its gene therapy product (the Arrangement). Advisory Opinion 24-03 is similar to several other favorable opinions OIG has issued to manufacturers of one-time, potentially curative drugs involving financial assistance for travel, lodging and other expenses, including Advisory Opinions 20-02 and 21-08.

Although arrangements involving remuneration tied to a particular product are often suspect under the Anti-Kickback Statute (AKS), OIG concluded the Arrangement poses a sufficiently low risk of fraud and abuse given the one-time, potentially curative nature of the treatment and the Arrangement’s inclusion of other safeguards.

The Arrangement

The requesting pharmaceutical manufacturer manufactures a one-time, potentially curative gene therapy product (Product) to treat two severe genetic diseases in patients ages 12 and older. Patients receiving the therapies must undergo multiple treatment stages, including an initial consultation, blood transfusions, mobilization and apheresis, conditioning, and infusion. Use of the Product carries a risk of serious potential complications that require the patient to remain hospitalized for four to six weeks after infusion.

Only certain approved hospital treatment centers offer the Product, including the care needed during the multiple treatment stages. The requestor selected the treatment centers based on objective criteria, including the centers’ locations and experience with both the genetic diseases at issue and stem cell transplantation. The requestor plans to activate at least 50 treatment centers in the 18 months following Product approval. The requestor’s website includes a treatment center locator tool to help patients identify the treatment centers closest to them.

Under the Arrangement, the requestor provides the following financial assistance to patients residing in the United States or a U.S. Territory whose income is at or below 600% of the Federal Poverty Level and who have an on-label prescription for the Product:

• Roundtrip airfare for patients and caregivers residing 300 miles or more from the nearest treatment center or ground transportation costs for patients and caregivers who live between 100 and 300 miles from the nearest treatment center.
• Lodging at a modest hotel for patients and caregivers living more than 100 miles from the nearest treatment center.
• Up to $50 per person per day for meals and other authorized expenses for patients and caregivers living more than 100 miles from the nearest treatment center, and up to $50 per day for transportation-related expenses (e.g., parking).

Patients who may receive assistance for travel, lodging, or associated expenses through insurance, a treatment center, or a third-party charity are not eligible to receive financial assistance under the Arrangement.

The requestor also certified the following:

• Offering the Arrangement to caregivers may positively impact the patient by enabling the caregivers to remain near the treatment center during the patient’s treatment with the Product.
• It will not use the Arrangement as a marketing tool to drive product selection, utilization, or referrals.
• It will not require the treating physicians or the treatment centers to exclusively prescribe or use the Product.

OIG’s Analysis

OIG began its analysis by noting that the Arrangement implicates the AKS in two ways:

1. Providing financial assistance for travel, lodging, meals, and associated expenses may induce patients to purchase the Product;
2. Enabling patients and their caregivers to travel to and stay near a treatment center that the patient may not otherwise have selected for treatment constitutes remuneration to the treatment centers and the treating physicians because they can earn fees for administering the Product. This remuneration could, in turn, induce the treatment centers to recommend and the physicians to order the Product.

Although no safe harbor would protect the Arrangement, OIG concluded that the Arrangement poses a low risk of fraud and abuse under the AKS for the following reasons:

1. The Arrangement promotes access to medically necessary care furnished by the treatment centers. The Arrangement removes a barrier to treatment in circumstances where only a limited number of facilities are qualified to be treatment centers and the treatment is potentially curative.
2. The Arrangement facilitates compliance with the Product’s label instructions. The Arrangement allows patients to remain at the hospital for the required four to six weeks so the patients’ healthcare teams can monitor for potential complications. OIG acknowledged that while certain remuneration provided under the Arrangement may benefit the patients’ caregivers, the requestor provided information demonstrating that caregiver support may have a positive impact on patient outcomes.
3. The Product is a one-time treatment unlikely to result in additional referrals. The Arrangement is unlike potentially problematic “seeding” arrangements in which manufacturers offer remuneration in connection with an initial dose of a drug to induce patients to obtain subsequent federally reimbursable doses.
4. The Arrangement includes additional safeguards to mitigate fraud and abuse. The requestor certified that it will not provide remuneration under the Arrangement for expenses for which other assistance is available, it does not require physicians or treatment centers to exclusively prescribe or use the Product, and it will not offer the Arrangement as a marketing tool.

OIG also determined that the Arrangement implicates the Beneficiary Inducements Civil Monetary Penalty provision (the Beneficiary Inducements CMP) because the treatment centers and their treating physicians are providers and suppliers that the Arrangement could induce patients to select. However, OIG concluded the Arrangement satisfies the Beneficiary Inducements CMP’s Promotes Access to Care Exception. OIG reasoned:

1. The remuneration offered under the Arrangement improves a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid. The Arrangement removes or reduces several potential financial and geographical barriers to treatment, including the limited number of treatment centers and the Product’s requirement that patients remain hospitalized for four to six weeks after infusion.
2. The Arrangement poses a low risk of harm to Medicare and Medicaid beneficiaries and the Medicare and Medicaid programs. The Arrangement is intended to increase patient safety by ensuring adequate patient monitoring and, therefore, is unlikely to skew clinical decision-making or raise quality of care concerns. In addition, given the one-time, potentially curative nature of the treatment, it is unlikely to result in overutilization or inappropriate utilization of federal healthcare programs.

Takeaways

This favorable opinion reinforces the criteria and safeguards OIG considers when approving arrangements involving financial assistance tied to the use of a specific product. In particular, OIG seems to derive comfort from the fact that the remuneration the requestor provides under the Arrangement relates to a one-time, potentially curative treatment that can be created and infused only at a small number of treatment centers.

As always, this opinion is limited to the requestor and to the particular facts and circumstances described by the requestor. OIG likely would view an arrangement involving remuneration tied to the use of a specific product very differently if the treatments were available at a wide range of providers or ongoing in nature.

The authors wish to thank summer associate Lauren Gammer for her contributions to this alert.