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Two Non-Profit Patient Assistance Programs Pay $6 Million to Settle Anti-Kickback and False Claims Allegations

Two non-profit corporations organized for the purpose of establishing and administering patient assistance programs have agreed to pay $2 million and $4 million respectively to settle allegations of assisting pharmaceutical manufacturers to pay improper kickbacks to Medicare beneficiaries.

Chronic Disease Fund, Inc. (CDF) and Patient Access Network Foundation (PANF) obtained payments from manufacturers to operate patient assistance funds that assisted Medicare beneficiaries with copayments, coinsurance, and deductibles for prescription drugs. Both CDF and PANF allegedly permitted multiple manufacturers to provide financial assistance exclusively to patients obtaining their respective prescription drug products.

CDF and PANF’s establishment of highly specific funds provided manufacturers a method to subsidize the cost of their respective prescription drug products, and ensured that individuals, including Medicare beneficiaries, would not be dissuaded by the applicable patient responsibility or choose a lower-cost alternative. Additionally, CDF allegedly contributed to the kickback scheme by providing the manufacturers with patient data, pertinent information regarding patients utilizing a competitor’s drug, and the average amount of financial assistance allocated to enrolled patients.

In addition to the financial settlements, both foundations entered into three-year integrity agreements with the Office of Inspector General (OIG) that require them to operate independently and in compliance with federal and state law. The foundations must also obtain compliance-related certifications and undergo detailed reviews by independent review organizations.

The OIG has published advisory opinions related to manufacturer subsidized patient assistance programs on a number of occasions. In addition to other elements analyzed by the OIG, two factors frequently considered are (i) whether program data is transmitted to the manufacturer enabling the entity to correlate its contributions with the use of its products and (ii) whether donations or contributions are earmarked exclusively for individuals who are prescribed the donor’s product. The funds collected, and programs administered, by CDF and PANF failed to meet these common criteria used to minimize the risk of violating the Federal Anti-Kickback Statute.

Patient assistance programs must be properly structured to retain control, patient choice, patient privacy, and independence in order to minimize the risk of violating the Anti-Kickback Statute and the False Claims Act. To ensure that the program you administer or participate in is compliant, contact Frier Levitt today.