For the first time in history, OIG rescinded an advisory opinion that had previously protected a patient assistance charity from anti-kickback statute (AKS) liability. In its letter to the charity, OIG stated that it based its decision to rescind the advisory opinion because the charity failed “to fully, completely, and accurately disclose all relevant and material facts to OIG.” The advisory opinion at issue is Advisory Opinion No. 06-04, which was issued to a nonprofit, tax-exempt, charitable patient assistance program on April 20, 2006, and subsequently modified on December 23, 2015.
In general, patient assistance charities help patients pay for out-of-pocket drug costs. This type of organization can potentially implicate the AKS if it has an improper relationship with donors. Drug companies are allowed to donate to these types of charities, but only if they are independent from the organization. This is because drug companies are not allowed to subsidize co-payments for patients enrolled in federal healthcare programs. For example, if a drug company sells a drug for a rare disease and donates money to a charity that induces Medicare beneficiaries with that disease to purchase the drug by defraying the patient’s co-payment costs, that conduct could potentially violate the AKS.
In its rescission letter, OIG determined that the patient assistance charity at issue, which has not been publicly named, gave patient-specific data to at least one or more donors. According to the OIG, from this data, the donor(s) were able to “correlate the amount and frequency of their donations with the number of subsidized prescriptions or orders for their products.” Further, this data reportedly “allowed donors to directly or indirectly influence the identification or delineation of [the charity’s] disease categories.” OIG stated that these breaches were material to its initial determination in the advisory opinion that the charity was independent between donors and patients.
Notably, OIG stated that when a party requesting an advisory opinion misrepresents material facts, the rescinded advisory opinion “has no force or effect.”
The Original OIG Advisory Opinion is available here. The Modified OIG Advisory Opinion is available here.
