The Complex Specialty Drug Landscape
The specialty drug market continues to provide exceptional innovation and clinical value to patients with both common and rare diseases. Although the end goal is to get the right drug to the right patient at the right time, a complex ecosystem of manufacturers, insurers, providers and patients must be navigated in a legally compliant manner to achieve this purpose and improve human health.
Players and Puzzle Pieces
Specialty pharmacies dispense specialty medications, and they work to gain access to limited distribution medicines and service their patients. Some of these services may include, by way of example, prior authorizations, data reporting, and patient monitoring. Payment modalities may include discounts, tiered rebates, service fees and co-pay discount coupons.
Hubs, whether they are standalone entities or have affiliations with Pharmacy Benefit Managers, specialty pharmacies, manufacturers or distributors, serve as a singular point of contact for manufacturers and their patients. Hubs perform several key functions, including data reporting, medical information and pharmacovigilance, medication adherence services, reimbursement and co-pay assistance, quick start services and benefits verification, and patient communications. These services facilitate improved and faster access to therapy, as well as greater adherence, better patient health outcomes, reduced barriers to care, and greater brand awareness and support among patients and health care providers. While these benefits are manifold, they come with complex legal issues and compliance risks.
Patients have their own set of challenges in the specialty medication space – awareness of therapy modalities and options, affordability concerns, and access to medications have long challenged the ability of patients to obtain their medications and adhere to therapy.
Manufacturers, of course, face the expensive and challenging path of drug development, from discovery to clinical trials to FDA approval. However, that is only the beginning. Once a drug is approved, manufacturers still need to work with third parties to develop pricing, financial support programs, enrollment programs, and patient communication, education and engagement strategies.
The trick is putting all these services and players into a legally compliant and clinically effective matrix that prioritizes patient health and well-being.
Legal and Compliance Risks
When establishing relationships with Hubs, manufacturers must be mindful of the fact that valid and necessary activities intended to improve patient health and well-being may be viewed by government regulators (DOJ and OIG) as prohibited remuneration designed to steer patients to their products. Government enforcement has focused on mechanisms for providing patient support programs, such as patient assistance programs, billing and coding assistance, reimbursement support, benefit coverage and access support and donations to independent charities that provide financial assistance with out-of-pocket drug costs to patients. For example, in OIG Advisory Opinion No. 20-05, the OIG reviewed a drug manufacturer’s (the “Requestor”) proposal to provide cost-sharing assistance directly to Medicare beneficiaries prescribed either of two formulations of its drug (the “Proposed Arrangement”). The Requestor proposed engaging a third party (the Hub) to administer the Proposed Arrangement. The OIG concluded that the proposed arrangement would present more than a minimal risk of fraud and abuse under the Federal Anti-Kickback Statute under 42 U.S.C. § 1320a-7b (the “AKS”). The AKS prohibits anyone from soliciting or receiving remuneration of any type in exchange for referring a patient for services where a federal healthcare program pays or for purchasing an item or service for which a federal healthcare program pays, because one purpose of the arrangement would be to induce Medicare beneficiaries to purchase the manufacturer’s federally reimbursable medications, as well as abrogate the statutory cost-sharing requirements under the Medicare Part D program.
Legal and compliance risks are not limited, however, to potentially prohibited remuneration under the AKS. Potential FDA or False Claims Act (“FCA”) liability may arise from Hub services that address off-label product uses, and of course an AKS violation may lead to FCA liability. Hub services that involve the extensive use or sharing of patient information may implicate potential HIPAA exposure as well. To the extent that medication adherence efforts are construed to increase product sales and market share, manufacturers must heed OIG guidance that any remuneration from a manufacturer to a purchaser that is expressly or impliedly related to the sale of the manufacturer’s product potentially implicates the AKS; as well as considering potential implications to the federal health care program beneficiary inducement law and the HIPAA marketing laws.
How Frier Levitt Can Help
While a closely coordinated, data driven approach to utilizing Hub services has many potential benefits, a dynamic regulatory and compliance landscape presents significant challenges and necessitates careful guidance. Frier Levitt’s experienced attorneys can work with you to ensure, for example, that you are in compliance with HIPPA regulations regarding the use and sharing of patient information and in particular, marketing restrictions; that Hub call center personnel are adequately trained and pre-approved call scripts comport with FDA requirements, and that reimbursement support services do not run afoul of the AKS. Whether you have an existing Hub platform or are seeking to establish one, or have specific concerns regarding a Hub program, contact our office to speak with an attorney today. Frier Levitt can provide the guidance necessary to ensure complaint manufacturer/hub/specialty pharmacy arrangements.
