On Thursday, February 23, the Office of the Inspector General for the Department of Health and Human Services (“OIG”) issued its first Advisory Opinion (“AO”) of the new year – OIG AO No. 23-01 – permitting a drug manufacturer to provide financial assistance for transportation, lodging, meals, and other out-of-pocket expenses to eligible patients receiving the manufacturer’s drug (the “Arrangement”). Overall, OIG concluded that: (1) the risk of fraud and abuse presented by the manufacturer’s Arrangement was sufficiently low under the Federal anti-kickback statute; and (2) the remuneration offered under the Arrangement was not likely to influence a beneficiary to order the manufacturer’s drug (the “Drug”) from a particular provider and therefore did not constitute grounds for the imposition of sanctions under the Beneficiary Inducements CMP. Ultimately, the crux of this decision came down to the unique manufacturing and distribution of the Drug, which (i) is the only available potentially curative treatment for an ultra-rare disorder; (ii) pursuant to its FDA approval, can only be manufactured at a single facility, located on the campus of a treatment center (the “Treatment Center”); (iii) can only be administered within 3 hours after being manufactured; and thus, can only be administered at the single Treatment Center site.
On Thursday, March 16, the Office of the Inspector General for the Department of Health and Human Services (“OIG”) issued OIG Advisory Opinion (“AO”) No. 22-05, relating to subsidization of certain Medicare cost-sharing obligations in the context of a clinical trial involving medical devices (the “Proposed Arrangement”). This is the third AO in a recent series of AOs (see AO 21-17 on November 19, 2021 and AO 21-13 on October 4, 2021) focused on Medicare cost subsidies in a clinical trial setting for serious conditions that affect large portions of the population in the US. Like these other AOs, OIG found that while the Proposed Arrangement could generate fraud and abuse risks under both the Federal anti-kickback statute (i.e., Section 1128A(a)(7) and 1128B(b) of the Social Security Act (“Act”)) and the Beneficiary Inducements CMP (i.e., Section 1128A(a)(5) of the Act), the Proposed Arrangement nevertheless presented a minimal risk of fraud and abuse under the law on the facts presented. Medical device manufacturers should pay close attention to this trend when considering trial designs and patient populations.
Continue Reading OIG Advisory Opinion Alert: Yet Another Favorable Decision for Medical Device Manufacturers