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”).
Full Answer
What is the DOJ’s interest in charities?
The DOJ’s interest in assistance programs started with looking at charities serving as channels for illegal kickbacks. At the end of 2019, the DOJ ordered three charities to pay $10 million to settle claims. Pharmaceutical companies were also implicated, with the DOJ alleging that the foundations were actually paying patients to use their drugs.
Will HHS update the 2014 special advisory bulletin on patient assistance programs?
After these settlements, legislators urged HHS to update the 2014 Special Advisory Bulletin on Patient Assistance Programs.
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.
How much did the DOJ pay to charities?
What are the charities involved in the DOJ settlements?
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.
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, ...
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 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.
Alleged Arrangement with Insys
According to the DOJ, PSI and Insys allegedly developed the “Breakthrough Cancer Pain” fund for their opioid painkiller Subsys, which was approved for pain management in cancer patients.
Alleged Arrangement with Aegerion
PSI and Aegerion allegedly established a fund where Aegerion contributed donations and assisted in creating the patient eligibility criteria used to determine whether PSI would provide copayment assistance to patients taking Juxtapid, an Aegerion drug.
Alleged Arrangement with Alexion
The DOJ alleged that PSI and Alexion created a “Complement Mediated Diseases” fund providing copayment and other financial assistance to patients prescribed Alexion’s drug, Soliris.
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 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 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 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 ...
How much did Amgen pay for False Claims Act?
(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 mere conduits.
What is a partial payment for Medicare?
When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (collectively “copays”). Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs. The Anti-Kickback Statute prohibits a pharmaceutical company from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce Medicare patients to purchase the company’s drugs. This prohibition extends to the payment of patients’ copay obligations.
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).
Did Amgen donate to Onyx?
The government alleged that Onyx was the sole donor to this travel fund and that Amgen, after integrating Onyx into its operations in 2015, continued to donate to the fund. The foundation also operated a second fund that covered copays for multiple myeloma drugs, including Kyprolis.
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 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.
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 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).
What is the DOJ settlement with PSI?
On January 21, 2020, the Department of Justice (DOJ) announced a $3 million settlement with Patient Services, Inc. (PSI) to resolve allegations of False Claims Act (FCA) violations. The DOJ alleged that PSI enabled three pharmaceutical companies to pay kickbacks to patients by funneling money to patients taking drugs manufactured by those same pharmaceutical companies. In addition to the $3 million, PSI has entered into a three-year integrity agreement with Health and Human Services’s Office of the Inspector General. The settlement involved no determination of liability.
What is the Breakthrough Cancer Pain Fund?
According to the DOJ, PSI and Insys allegedly developed the “Breakthrough Cancer Pain” fund for their opioid painkiller Subsys, which was approved for pain management in cancer patients. The DOJ alleged that Insys was the only donor to this fund and that PSI allowed Insys to see whether referred patients received financial assistance and the amount of such assistance. The government also alleged that PSI knew that Insys was referring patients who did not have cancer to the Breakthrough Cancer Pain fund, but PSI stated that it would prevent off-label use of Subsys only if Insys requested.
What is the fund that Alexion and PSI created?
The DOJ alleged that PSI and Alexion created a “Complement Mediated Diseases” fund that provided co-payment and other financial assistance to patients prescribed Alexion’s drug, Soliris. According to the allegations, Alexion contributed financially to the fund, and except in rare instances, patients received assistance from the fund only if they were taking Soliris. The DOJ also alleged that PSI reported to Alexion detailed information regarding payments made to patients from the fund.
What is the purpose of PSI and Aegerion?
PSI and Aegerion allegedly established a fund to which Aegerion contributed donations and assisted in creating the patient eligibility criteria used to determine whether PSI would provide co-payment assistance to patients taking Juxtapid, an Aegerion drug. This fund allegedly allowed Aegerion, through PSI, to remove price concerns of physicians prescribing and patients taking Juxtapid, so that Juxtapid would be more frequently prescribed.
Did Pfizer get subpoenaed?
The New York-based drug giant said it had received two subpoenas, one in late 2015 and the second in July 2016, asking for information about its relationship with the Patient Access Network Foundation and other nonprofits ...
Do drug companies offer copay assistance?
Most drugmakers offer copay assistance programs of their own, but they’re limited to patients with commercial insurance. Federal law prohibits pharma companies from pitching in on drug costs for patients covered by government programs such as Medicare and Medicaid.
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, ...
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 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.
