On December 22, 2022, OIG issued a favorable advisory opinion concluding that it would not impose administrative sanctions on a pharmaceutical manufacturer for providing trial units of a certain antipsychotic drug (Drug) to hospitals for inpatient use (Proposed Arrangement) even though the Proposed Arrangement would implicate the federal anti-kickback statute (AKS).

Under the Proposed Arrangement, the pharmaceutical manufacturer would allow participating hospitals to request up to twenty (20) units of the Drug per month, limited to two (2) free units of the Drug per eligible inpatient per calendar year. Participating hospitals would be required to register through an online portal and renew their participation in the Proposed Arrangement annually. Once registered, the participating hospitals would receive up to five (5) free trial doses of the Drug for administration to eligible inpatients. The participating hospitals would be able to order units of the Drug to replace those administered as long as the hospitals would have no more than five (5) units of inventory. Participating hospitals would also be required to comply with certain terms and conditions, including requiring prescribers to act in accordance with professional standards and ensuring that the Drug is administered only to patients for whom the prescriber has independently determined that the Drug is clinically appropriate and immediate onsite treatment of the Drug would increase the likelihood of a positive treatment outcome.

OIG concluded that the Proposed Arrangement would implicate the AKS because the free trial units of the Drug would constitute remuneration that the pharmaceutical manufacturer offers to the hospitals, and the hospitals may be referral sources for the Drug. However, OIG concluded that it would not impose administrative sanctions on the pharmaceutical manufacturer because the risks posed by the Proposed Arrangement under the AKS would be low for the following reasons:

1. The Proposed Arrangement presents a low risk of patient steering. The risk of a participating hospital steering inpatients to the Drug based on receipt of free trials of the Drug is low. OIG reasoned that the hospitals would be required under the Proposed Arrangement to allow clinicians to make independent decisions about the suitability of the Drug for a particular patient, and prescribers would not be given any financial incentive to prescribe the Drug to inpatients as opposed to a competing drug.
2. The Proposed Arrangement is unlikely to increase costs to Federal health care programs. OIG concluded that the Proposed Arrangement is unlikely to inappropriately increase costs to federal health care programs because the free trials of the Drug would only be given to patients diagnosed with the disorder for which the Drug is meant to treat and for whom a prescriber independently determined that (1) the Drug is clinically appropriate and (2) immediate onsite treatment with the Drug would increase the long-term likelihood of a positive treatment outcome. OIG also reasoned that the Drug could reduce negative outcomes for patients, which would decrease aggregate costs to federal health care programs over time.
3. The Proposed Arrangement contains adequate safeguards. OIG concluded that the Proposed Arrangement includes several safeguards that minimize the risk of misuse of the free trials of the Drug. These safeguards include: (1) prohibiting participating hospitals from selling, reselling, trading, or distributing for sale the trial units of the Drug, or billing any patient or payor for the trial units of the Drug; (2) ensuring that participating hospitals receive only a limited number of trial units per year per patient; (3) requiring participating hospitals to ensure prescribers act in accordance with professional standards; and (4) ensuring participating hospitals understand that neither the prescriber nor the participating hospital are under an obligation to continue using, prescribing, or recommending the Drug as a condition of receiving a trial unit.

For these reasons, OIG concluded that it would not impose sanctions on the pharmaceutical manufacturer even though the Proposed Arrangement would implicate the AKS. However, OIG noted that it was not expressing an opinion regarding the pharmaceutical manufacturer’s potential liability under the Prescription Drug Marketing Act of 1987 or the False Claims Act. The OIG Advisory Opinion is available here.