The U.S. Department of Health and Human Services, Office of Inspector General (OIG), posted a favorable Advisory Opinion (24-11) allowing a pharmaceutical manufacturer (Manufacturer) to provide free meningococcal vaccinations to eligible patients, including Federal health care program enrollees who receive Manufacturer’s U.S. Food and Drug Administration (FDA)-approved products that treat rare disorders.
Patients who receive Manufacturer’s products have a significantly higher risk of contracting life-threatening meningococcal infections, and the Manufacturer certified that many patients experience barriers when attempting to receive the vaccinations prior to starting treatment. Similarly, FDA raised concerns about Manufacturer’s efforts to ensure patients receive these recommended vaccinations. Under the proposed arrangement, patients would receive the vaccinations from a third-party vendor or their prescribing provider.
According to the proposed vendor contract, Manufacturer covers the full cost of the vaccine and its administration and the vendor cannot bill the Federal health care programs (or any other payor) for these costs. Alternatively, Manufacturer ships the vaccine to the provider free of charge, but does not pay the provider any fee for administering the vaccination. Although the provider cannot bill for the vaccine cost, they are permitted to bill the payor a $20 vaccination administration fee.
OIG notes that free vaccinations constitute remuneration under the Federal Anti-Kickback Statute for which no safe harbor applies in this case. Additionally, OIG observes that the proposed arrangement implicates the Beneficiary Inducements Civil Money Penalty (CMP), but that the risk of fraud and abuse is sufficiently low enough to justify a favorable opinion because:
- Manufacturer certified that it does not cover any other patient costs associated with its products under this arrangement. Thus, the primary benefit to patients is convenience and safety, particularly because Medicare enrollees would not incur any out-of-pocket expenses related to the vaccinations;
- the arrangement is unlikely to result in inappropriately increased costs to Federal health care programs because: Manufacturer provides the vaccines free of charge; the vaccines are not billed to any payors; and prescribing providers can only bill payors a nominal administration fee;
- the arrangement is unlikely to corrupt medical decision-making because the only remuneration flowing to a prescriber is the opportunity to bill a nominal administration fee. Even then, Manufacturer certified that the prescribing providers do not typically administer the vaccinations; and
- the free vaccinations are available to all patients who take Manufacturer’s products, regardless of the prescribing provider.
This favorable opinion is a positive development for manufacturers seeking to address patient safety and FDA concerns. OIG tends to view patient assistance programs favorably, particularly for those with rare disorders, provided there are adequate safeguards are in place. Entities considering similar programs should consult with experienced counsel to assess any compliance requirements carefully.
A complete copy of Advisory Opinion 24-11 is available here.
Should you have any questions regarding the above or would like to seek your own advisory opinion, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or contact us at [email protected].