Last month, the Department of Health and Human Services, Office of Inspector General (OIG) released two separate opinions, OIG Adv. Op 24-05 & OIG Adv. Op. 24-06, regarding proposed business arrangements whereby the manufacturers of gene therapy treatments intended to offer patients of their products a one-time, monetary benefit to cover all (or some) cost associated with fertility preservation procedures, patient counseling, fertility drugs, and storage if the patients satisfied income limits and exhausted other coverage for fertility support. The pharmaceutical manufacturers represented that the gene therapy treatments presented a risk of infertility, and some patients may forgo the treatment because of this risk, along with the inability to afford fertility services.
In both opinions, the OIG found that the provision of fertility support for individuals undergoing the manufacturers’ gene therapy treatments implicated the federal Anti-Kickback Statute (AKS) because: (1) the fertility support would constitute remuneration (i.e. the provision of “something of value”) to patients, including federal program enrollees, to induce the purchase of the manufacturers’ gene therapy treatment; and (2) the fertility support would also result in the provision of something of value to the manufacturer-approved gene therapy treatment centers[1] (in the form of opportunity to earn and generate fees related to the genetic therapy treatments) who ordered the manufacturers’ gene therapies instead of competitor drugs or other clinically indicated treatments. Moreover, the OIG highlighted that no safe harbor was applicable to the remuneration resulting from the provision of free fertility services. The OIG also noted that it lacked data regarding the ability of Federal healthcare program enrollees to access the genetic therapy treatments, as well as data regarding the costs, benefits, risks, and outcomes of the genetic therapy treatment, to comprehensively evaluate the risk of fraud and abuse arising from the models, and, consequently, could not conclude that the support for fertility services posed a sufficiently low enough risk of fraud and abuse to grant AKS immunity.
The OIG separately analyzed the free fertility support under the Beneficiary Inducement Civil Monetary Penalties Law. The OIG found that the free fertility support would be likely to influence a beneficiary’s selection of a particular provider (i.e., treatment center). Specifically, the OIG found the model would likely constitute beneficiary inducement because the treatment centers and physicians practicing at the treatment centers where gene therapy medications were offered were also providers that the beneficiary could (and may) also select for the fertility services. Accordingly, the beneficiary may be induced to select that treatment center and gene therapy over another facility based upon the availability of the free fertility support services the beneficiary could access. The OIG noted that it lacked data as to whether the provision of the fertility support would improve the ability of patients to access genetic therapies; thus, the OIG was unable to determine whether any exception to the Beneficiary Inducement Civil Monetary Penalties law would apply, such as the “Promote Access to Care” Exception.
How Frier Levitt Can Help
Manufacturers and other stakeholders contemplating models involving the provision of free or discounted drugs or services must remain cognizant of the regulatory risks associated with these arrangements. Competent healthcare counsel can assist in evaluating the implications of a specific program. If you are developing or administering a program that contemplates the provision of free products and/or services, contact Frier Levitt to speak with an experienced healthcare attorney about the regulatory compliance of your model.
[1] The manufacturers represented that its drugs were only available to a limited number of treatment centers who the manufacturer has approved as having the expertise to treat the patients’ underlying disease and administer the gene therapies.
