The DOJ asserted that Good Days, PANF, TAF and the pharmaceutical companies used funds ostensibly donated to help financially needy patients to induce patient purchases, drive up utilization, increase drug sales and increase costs to insurance programs such as Medicare and Medicaid.
Full Answer
Who was involved in the Massachusetts Department of Public Health investigation?
The investigation was conducted by the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation.
What is the PSI settlement with HHS-OIG?
“This settlement demonstrates the FBI’s resolve to ensure that patients receive care that is based solely on sound medical judgment, and not compromised by kickbacks.” PSI has agreed to a three-year Integrity Agreement (IA) with HHS-OIG as part of the settlement.
What do the FBI’s Medicare settlements mean for patients?
“These settlements demonstrate the FBI’s commitment to safeguard the Medicare program and ensure that patients receive treatment solely based on their medical needs,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division.
Can psi be used as a conduit to pay patient copays?
The United States previously entered into settlement agreements with Insys, Aegerion, and Alexion covering their use of PSI as a conduit to pay their patients’ copays.
What are the charities involved in the DOJ settlements?
How much did the DOJ pay to charities?
How much did Good Days pay for the PAPs?
What is the DOJ settlement?
How much did Amgen settle for?
Do PAPs have to disclose their treatments?
Can a PAP be used for medical care?
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Two Pharmaceutical Companies Agree to Pay a Total of Nearly $125 ...
The Department of Justice announced today that two more pharmaceutical companies – Astellas Pharma US Inc. (Astellas) and Amgen Inc. (Amgen) – have agreed to pay a total of $124.75 million to resolve allegations that they each violated the False Claims Act by illegally paying the Medicare copays for their own products, through purportedly independent foundations that the companies used as ...
K&L Gates - Increased Scrutiny of Patient Assistance Programs ...
In the midst of ongoing national debates regarding drug pricing [1] and access to innovative therapies, patient assistance programs (“PAPs”) are facing an evolving legal landscape, as well as increased enforcement scrutiny from regulators and legislators on a state and federal level.
What is the complaint against PSI?
district court for the Eastern District of Virginia, alleging that the OIG’s recent guidance prohibits PSI’s protected free speech with donors and potential donors, jeopardizing PSI’s ability to operate. [29] .
What is the OIG opinion on CVC?
In December 2015, the OIG published a Modified Advisory Opinion 06-04, following the OIG’s request that CVC certify compliance with the additional factors outlined in the 2014 Special Advisory Bulletin. The Modified Advisory Opinion stated that CVC had certified compliance to each additional factor, and further that CVC had proposed additional modifications to its current operations. [13] The OIG concluded in the Modified Advisory Opinion 06-04 that CVC’s PAP was sufficiently low risk and the OIG would not impose CMPs or sanctions on CVC under the AKS.
What is the rescission of advisory opinion 06-04?
Senate Finance Committee regarding the rescission of Advisory Opinion 06-04, including how the OIG came to learn about the misrepresentations that the charity made, and whether the OIG plans to audit or review other PAPs and similar advisory opinions.
What is a rescinded OIG letter?
However, on November 28, 2017, the OIG issued a letter rescinding Advisory Opinion 06-04 (“Rescission Letter”), based on the charity’s “failure to fully, completely, and accurately disclose all relevant and material facts to OIG,” and CVC’s alleged failure to comply with certain factual certifications made to the OIG. Specifically, the OIG states that it determined that the charity “provided patient-specific data to one or more donors that would enable the donor (s) to correlate the amount and frequency of their donations with the number of subsidized prescriptions or orders for their products, and (ii) allowed donors to directly or indirectly influence the identification or delineation of Requestor’s disease categories.” [14] The Rescission Letter indicates that CVC’s failure to comply with the certifications “materially increased the risk” that CVC served as a conduit for financial assistance from a drug manufacturer donor to a patient, and thus inappropriate steerage to the donor’s drugs.
What should stakeholders do with PAPs?
Stakeholders should also closely monitor federal and state legislative policy developments regarding PAPs, including copayment assistance and product coupons. K&L Gates regularly advises clients on health care fraud and abuse risk mitigation and compliance matters and facilitate stakeholder engagement with Congress and state legislators and HHS.
What are the two aspects of PAP?
The OIG has indicated that PAPs generally have two “remunerative aspects” that require scrutiny under the AKS: i) donor contributions , which the OIG stated can be analyzed as indirect remuneration to patients , and ii) financial assistance remuneration provided directly to patients. The OIG states that the AKS could be violated “if a donation is made to a PAP to induce the PAP to recommend or arrange for the purchase of the donor’s federally reimbursable items,” as well as if a PAP’s grant of financial assistance to a patient is made “to influence the patient to purchase (or induce the patient’s physician to prescribe) certain items.” [5]
What is the purpose of PAPs?
Department of Health and Human Services (“HHS”) Office of the Inspector General (“OIG”) has continually acknowledged that properly structured PAPs can provide important “safety net assistance” to patients with limited financial means who cannot afford necessary drugs. This Client Alert provides a comprehensive review ...
What drugmaker was the first to disclose a DOJ inquiry about its patient assistance activities?
Valeant Pharmaceuticals ($VRX) was the first drugmaker to disclose a DOJ inquiry about its patient-assistance activities; last October, amid harsh criticism of its price hikes and a separate investigation into its ties with specialty pharmacies, Valeant said it had received subpoenas for materials related to its patient-assistance programs.
Why can't drugmakers correlate donations with support for their own drugs?
Government regulations prohibit drugmakers from trying to correlate their donations with support for their own drugs, because that would indicate that donors were trying to channel financial support in ways that could violate antikickback laws, court documents contend.
How much money does Celgene donate?
Its donations--which amounted to between $50 million and $100 million per year , according to a Celgene expert witness in the Brown lawsuit, come with no strings attached, the company says.
What is the integrity agreement for PSI?
PSI has agreed to a three-year Integrity Agreement (IA) with HHS-OIG as part of the settlement. The IA requires, among other things, that PSI implement measures designed to ensure that it operates independently and that its arrangements and interactions with pharmaceutical manufacturer donors are compliant with the law. In addition, the IA requires compliance-related certifications from PSI’s Board of Directors and detailed reviews by an independent review organization.
What is PSI allegedly?
PSI allegedly operated as a vehicle for specific pharmaceutical companies essentially to pay kickbacks at the ultimate expense of the American taxpayers who support the Medicare program ,” said U.S. Attorney Andrew E. Lelling of the District of Massachusetts.
What companies did PSI work with?
The government alleged that PSI coordinated with three pharmaceutical manufacturers – Insys, Aegerion, and Alexion – to enable them to pay kickbacks to Medicare patients taking their drugs. PSI allegedly worked with these companies to design and operate certain funds that funneled money from the companies to patients taking the specific drugs the companies sold. These schemes allegedly minimized the possibility that the companies’ contributions to the funds would go to patients taking competing drugs made by other companies and undermined the nature of these contributions as bona fide donations. The United States previously entered into settlement agreements with Insys, Aegerion, and Alexion covering their use of PSI as a conduit to pay their patients’ copays.
When did Alexion contact PSI?
The government further alleged that Alexion approached PSI in January 2010 to request that PSI create a fund to provide financial assistance to Soliris patients, including by paying patients’ Medicare copays and other medical expenses for Soliris patients.
How much did PSI pay?
Patient Services Inc. (PSI), a foundation based in Midlothian, Virginia, has agreed to pay $3 million to resolve allegations that it violated the False Claims Act by acting as a conduit to enable certain pharmaceutical companies to provide kickbacks to Medicare patients taking the companies’ drugs by paying the patients’ copayments, the Department of Justice announced today. The amount of the settlement announced today was determined based on analysis of PSI’s ability to pay after review of its financial condition.
What is the number to report healthcare fraud?
Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Does PSI work with Insys?
The government further alleged that PSI worked with Insys to create the “Breakthrough Cancer Pain” fund, to which Insys was the only donor. The government also alleged that PSI allowed Insys to see the status of each patient that it referred to PSI, including whether that patient had received copay assistance from PSI and the amount of the assistance. The government alleged that PSI knew that Insys was referring patients to the Breakthrough Cancer Pain fund who did not have cancer, but PSI stated that it would only prevent “off-label use…if the Donor wants us to.”
How much did Jazz Pharmaceuticals pay for the False Claims Act?
(Alexion) – have agreed to pay a total of $122.6 million to resolve allegations that they each violated the False Claims Act by illegally paying the Medicare or Civilian Health and Medical Program (ChampVA) copays for their own products, through purportedly independent foundations that the companies used as mere conduits.
Who conducted the Massachusetts investigation?
These investigations were conducted by the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; and the Department of Veterans Affairs, Office of Inspector General.
What is the number to report healthcare fraud?
Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Do you have to pay a copay for ChampVA?
Similarly, under ChampVA, patients may be required to pay a copay for medications.
Who subpoenaed Horizon Pharma?
Federal prosecutors have subpoenaed Horizon Pharma, requesting information about its patient assistance program, the Dublin-based company disclosed in a SEC filing Monday.
When will Vigil Neuroscience go public?
Vigil Neuroscience, which outlined its IPO plans on Friday, could become the eighth neurological disease biotech to go public in 2021, eclipsing each of the previous three years.
What is the HorizonCares program?
Attorney’s Office for the Southern District of New York, the investigation is examining the HorizonCares program, which helps reduce patient out-of-pocket costs for prescriptions filled at independent pharmacies.
What is the DOJ's interest in PAPs?
DOJ interest in drug company relationships with independent PAPs began in earnest in the midst of larger concerns regarding sharply rising drug prices. While investigating pricing schemes and specialty pharmacy relationships in 2015, DOJ began issuing subpoenas to pharmaceutical companies that manufacture expensive and specialty drugs that requested information on the companies’ relationships with independent PAPs. 9 Since then, the DOJ has broadened its inquiry to numerous pharmaceutical companies and independent PAPs.
When did the DOJ issue subpoenas to Valeant Pharmaceuticals?
9 DOJ issued subpoenas to Valeant Pharmaceuticals in October 2015, and Horizon Pharmaceuticals in early 2016, requesting information on the drug makers’ relationships with independent PAPs, while investigating both companies for their relationships with specialty pharmacies.
What information should a PAP provider share with patients?
The company should also limit the information it shares about independent PAPs with patients and providers. For example, if the company’s reimbursement hub triages requests for co-pay or other financial assistance, the hub should provide only a general overview of the third-party assistance options to the patient or provider, along with contact information for each independent PAP that has an applicable fund and is currently accepting new applications (i.e., a “cold transfer”). Hub representatives should explicitly inform the patient or the patient’s provider that the referral to the independent PAP is not a guarantee of assistance and that the PAP has full discretion whether to provide assistance based on its own independent eligibility criteria. To this end, company personnel should generally be restricted from (a) filling out applications for patients or seeking information about the status of any individual application for assistance from any PAP, or (b) seeking detailed information regarding why and from which PAP any patients received or were denied assistance. In addition, the company should limit, as much as possible, the information coming from patients who were transferred to PAPs for assistance and who were denied or received assistance; if company personnel receive such information, they should not (1) share it beyond reimbursement support personnel, or (2) record it in the patient’s case notes.
What is a meaningful review and processing of funding requests?
Meaningful Review and Processing of Funding Requests: All requests should follow the company’s customary and generally applicable grant request processes, and these requirements should be incorporated within the PAP policy/procedure described above. The PAP policy/procedure should specify standardized, objective criteria for assessing requests from independent PAPs for both initial and additional or supplemental funding (e.g., funding beyond that which is set forth in the annual budget). Supplemental requests for funding must be reviewed for compliance with applicable Federal health care program requirements, OIG guidance, and company policies and procedures.
What should compliance officers be reexamining?
In light of the recent and, likely, increasing enforcement in the area of patient support programs, including independent PAPs and free drug programs, compliance officers should be reexamining the processes and internal controls surrounding these activities . Although the historical OIG and industry compliance guidance remain instructive in mitigating risk, recent CIAs resulting from allegedly abusive independent PAP activities should also be examined to determine whether enhancements and improvements are necessary. This article contains a framework for this self-assessment, but a drug company’s specific activities will inform the level of compliance risk and the degree of customization necessary to make any mitigation efforts as effective as possible.
Does a Hub representative have to inform the patient or the patient's provider that the referral to the independent PAP?
Hub representatives should explicitly inform the patient or the patient’s provider that the referral to the independent PAP is not a guarantee of assistance and that the PAP has full discretion whether to provide assistance based on its own independent eligibility criteria.
Is it permissible for a charitable organization partly funded by kidney dialysis providers to pay Medicare Part B?
4 See OIG Adv. Op. 97-01 (June 11, 1997) (advising that it is permissible for a charitable organization partly funded by kidney dialysis providers to pay Medicare Part B, Medigap and other health insurance premiums for end-stage renal disease patients who are financially needy).
What are the charities involved in the DOJ settlements?
The 3 charities involved in the DOJ settlements, Good Days, the Patient Access Network Foundation (“PANF) and The Assistance Fund (“TAF”) help patients obtain medications by operating patient assistance programs (“PAPs”). PAPs typically provide financial support to uninsured or underinsured individuals, often through health insurance premium payments or copayment assistance. When operated in strict compliance with existing federal guidance, PAPs operate independent of the entities that contribute financially to their funds and have structural guardrails to protect against violations of the federal Anti-Kickback Statute and Civil Monetary Penalties Law. [1] However, the DOJ alleged that Good Days, PANF and TAF conspired with pharmaceutical companies to violate federal law by:
How much did the DOJ pay to charities?
Recently, the U.S. Department of Justice (“DOJ”) announced that 3 charities will pay a total of $10 million to settle claims that the charities operated as conduits for illegal kickbacks to pharmaceutical companies. The industry-wide probe also implicated several pharmaceutical companies that, according to the DOJ, ...
How much did Good Days pay for the PAPs?
As part of the settlement, Good Days agreed to pay $2 million , PANF agreed to pay $4 million and TAF agreed to pay $4 million. Each of the PAPs also agreed to enter into integrity agreements with the Department of Health & Human Services (“DHHS”) Office of the Inspector General (“OIG”) for the next 3 years to ensure that their relationships with pharmaceutical companies comply with federal law. For their alleged involvement in the scheme to increase drug purchases by providing donations to charities, the DOJ filed charges against, or settled with, several pharmaceutical companies earlier this year. Among them, Amgen settled for $24.75 million, Astellas settled for $100 million, and Pfizer settled for $23.85 million.
What is the DOJ settlement?
The DOJ settlements come amidst calls from both the federal executive and legislative branches to increase scrutiny of pharmaceutical manufacturers’ pricing and other practices. For example, in a December 4, 2019 letter to the OIG (“December 4 Letter”), Senators Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI) urged the OIG to update a 2014 Special Advisory Bulletin to PAPs to:
How much did Amgen settle for?
Among them, Amgen settled for $24.75 million, Astellas settled for $100 million, and Pfizer settled for $23.85 million.
Do PAPs have to disclose their treatments?
Require independent charity PAPs to publicly disclose which treatments they cover, and to provide written justifications for any deviations from the U.S. Food and Drug Administration’s full list of approved treatments for any specific disease or condition;
Can a PAP be used for medical care?
PAPs can fill a gap in the health care industry and open the door to necessary care for financially needy individuals if they are properly structured. Current available guidance suggests that PAPs should involve funds that are independent of their donors without earmarks for certain treatments, provide for patient choice and use uniform financial eligibility determination criteria when evaluating assistance applications. Health care providers interested in making donations to a charity operating a PAP or establishing a charitable foundation to operate a PAP should consult their compliance and legal counsel to ensure adherence to applicable laws and regulatory guidance.
