DOJ Probe of Pharmaceutical Companies Implicates Patient Assistance Programs
- 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”). ...
- Executive and Legislative Branch Calls for Increased Scrutiny ...
- Practical Takeaways ...
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.
Is Pfizer’s third-party patient assistance program compliant?
The five-year CIA requires, among other things, that Pfizer implement measures designed to ensure that arrangements and interactions with third-party patient assistance programs are compliant with the law.
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.
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.
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.
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 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.
Do you have to pay a copay for ChampVA?
Similarly, under ChampVA, patients may be required to pay a copay for medications.
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 focus of PAPs?
Ultimately, data sharing and communication between charity PAPs and donors appears to be the key area of focus for OIG, DOJ, and IRS enforcement. If such communication and data sharing is prohibited, whether by state statute or federal regulatory enforcement, it is remains to be seen whether PAPs will continue to operate as they are currently structured. In any event, it is incumbent upon interested parties to stay abreast of changes in the law and developing enforcement trends, and to continually monitor and update their compliance programs accordingly. For example, given the amount of scrutiny applied to coordination between the business and charitable giving arms of medical product manufacturers, compliance programs should be actively examining all intra-firm transactions to assure that no improper influence is being exerted over communications with and donations to charity PAPs.
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 ...
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 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.
How much did Pfizer pay to Medicare?
BOSTON – The U.S. Attorney’s Office announced today that pharmaceutical company Pfizer Inc. has agreed to pay $23.85 million to resolve allegations that it violated the False Claims Act by paying kickbacks to Medicare patients through a purportedly independent charitable foundation.
How long does it take for Pfizer to comply with the CIA?
The five-year CIA requires, among other things, that Pfizer implement measures designed to ensure that arrangements and interactions with third-party patient assistance programs are compliant with the law.
How much did Sanofi pay to Medicare?
BOSTON – The U.S. Attorney’s Office announced today that pharmaceutical company Sanofi-Aventis U.S., LLC (“Sanofi”), has agreed to pay $11.85 million to resolve allegations that it violated the False Claims Act by paying kickbacks to Medicare patients through a purportedly independent charitable foundation, The Assistance Fund (“TAF”).
Is TAF a 501c3?
The government alleged that TAF, an entity claiming 501 (c) (3) status for tax purposes, operates funds, including a fund for MS patients, that pay the co-pays of certain patients, including Medicare patients, who were prescribed Lemtrada.
Did Sanofi pay TAF?
The United States further alleged that Sanofi made payments to TAF not with a charitable purpose but rather with the intention of using TAF as a conduit to pay the financial obligations, including Medicare co-pay obligations, of patients taking Lemtrada, and that Sanofi’s payment through TAF of Medicare co-pays for Lemtrada violated the Anti-Kickback Statute. To effectuate its scheme, Sanofi worked with its third-party reimbursement hub to identify Medicare patients for whom physicians had prescribed Lemtrada, but who had not yet received infusions of the drug because they lacked sufficient funds to afford the co-pays for Lemtrada. Sanofi made nine payments to TAF during 2015 and 2016. At the times Sanofi made eight of these nine payments, TAF’s MS fund had run out of funding, and was closed to new patients. In conjunction with its payments to TAF, and knowing that TAF’s MS fund did not maintain wait lists and would fund the first patients who applied for assistance after the fund received new funding, Sanofi instructed its hub quickly to refer as many Lemtrada patients as possible to the TAF MS fund. As a result, when TAF’s MS fund opened with funding from Sanofi, Lemtrada patients received a disproportionately large share of the Medicare co-pay grants TAF issued and patients taking MS drugs other than Lemtrada received a disproportionately small share of the Medicare co-pay grants TAF issued.
What is a CIA for Novartis?
Contemporaneous with the settlement of the FCA claims in these matters, Novartis entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The five-year CIA addresses the conduct at issue in both matters. Among other things, the CIA requires Novartis to significantly reduce the number of paid speaker programs and the amounts spent on such programs. Under the CIA, Novartis speaker programs may only occur under limited circumstances and in a virtual format. In addition, the CIA requires Novartis to implement measures designed to promote independence from any patient assistance programs to which it contributes. The CIA also requires multi-faceted monitoring of Novartis’s operations and obligates company executives and Board members to certify about compliance.
How much did Novartis pay for the first settlement?
In the first settlement, Novartis has agreed to pay $51.25 million to resolve allegations that it illegally paid the copay obligations for patients taking its drugs. 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.
How much did Novartis pay for the second matter?
In the second matter, Novartis will pay $591,442,008 to resolve FCA claims that it paid kickbacks to doctors to induce them to prescribe the Novartis drugs Lotrel, Valturna, Starlix, Tekturna, Tekturna HCT, Tekamlo, Diovan, Diovan HCT, Exforge, and Exforge HCT. In addition, Novartis will forfeit $38.4 million under the Civil Asset Forfeiture Statute. Novartis also made extensive factual admissions in the settlement and agreed to strict limitations on any future speaker programs, including reductions to the amount it may spend on such programs.
How much did Novartis pay?
Pharmaceutical company Novartis Pharmaceuticals Corporation (Novartis), based in East Hanover, New Jersey, has agreed to pay over $642 million in separate settlements resolving claims that it violated the False Claims Act (FCA). The first settlement pertains to the company’s alleged illegal use of three foundations as conduits to pay ...
Does Novartis pay physicians honoraria?
Novartis paid physicians honoraria, purportedly as compensation for delivering a lecture regarding a Novartis medication, but, as Novartis knew, many of these programs were nothing more than social events held at expensive restaurants, with little or no discussion about the Novartis drugs.
Who conducted the Bilotta case?
The Bilotta matter was litigated by the Southern District of New York, with assistance from the Civil Division’s Commercial Litigation Branch, the Federal Bureau of Investigation, the Department of Health and Human Services, Office of Inspector General, and the Department of Defense, Office of Inspector General.
Does Novartis have a five year CIA?
The five-year CIA addresses the conduct at issue in both matters. Among other things, the CIA requires Novartis to significantly reduce the number of paid speaker programs and the amounts spent on such programs. Under the CIA, Novartis speaker programs may only occur under limited circumstances and in a virtual format.
