COMPLIANCE WITH PATIENT ASSISTANCE PROGRAMS AND CO-PAY CARDS. Judd Katz JD MHA November 2016

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1 COMPLIANCE WITH PATIENT ASSISTANCE PROGRAMS AND CO-PAY CARDS Judd Katz JD MHA November 2016

2 Background information Patient Assistance Programs Copay Cards/Assistance Programs Reimbursement Support AGENDA

3 Pharmaceutical Industry Landscape The government seems to follow: Increase federal costs Influence HCP decision making Promote inappropriate use of drug Disclose patient information No clear line between medical and commercial New aspects moving forward: whistle-blowers 3

4 Anti-Kickback Statute-Explained Federal Anti-Kickback Statute Criminal Felony Statute A criminal statute that makes it illegal to offer or pay, directly or indirectly, remuneration that is, anything of value to a healthcare professional to induce or reward the purchase or prescription of products. Broad prosecutorial discretion in defining remuneration

5 Ensuring Compliance Written policies and procedures Enforcement through discipline pursuant to published guidelines Employee training and education Effective lines of communication 7 elements recommended by the OIG: A Compliance Officer and Compliance Committee Internal monitoring and auditing Prompt response and corrective action for detected problems Create Policies on discounts and rebates Ensure effective training is conducted, at least annually, on these policies. Consider adding reimbursement messages, and specifically, discount and rebate messaging (copay cards, PAPs, etc.) to your field monitoring checklist Work cross functionally with your legal team and ad/promo teams to uncover any faulty messaging in re to these activities. (lack of disclaimer, ineffective messaging from sales training).

6 Potential Exceptions/ Safe Harbors no exceptions or safe harbors for patient support programs Structure vendor agreements under the personal services safe harbor OIG Guidance: Manufacturer Patient Assistance Programs (PAPs) Independent Charity Co-Pay PAPs Limited Reimbursement Support Manufacturer Copayment Coupon Programs 6

7 Patient Assistance Programs PAPS 7

8 Patient Assistance Programs (PAPs) Free or reduced price product for financially needy patients who meet certain specified eligibility criteria Eligibility criteria (including financial need) should be reasonable and applied consistently to all applicants There is no safe harbor for PAPs. There are two OIG special advisory bulletins and many OIG advisory opinions OIG recognizes the value of PAPs providing important safety net assistance to patients in need, ~cost-sharing subsidies to federal program beneficiaries provided by manufacturer PAPs pose heightened risk of fraud and abuse 8

9 Independent Foundation PAPs 2005 Guidance OIG Guidance (Nov. 2005): Donations from a manufacturer to an independent, bona fide charity PAP that provides costsharing to federal program beneficiaries should not raise antikickback concerns, provided: Neither the manufacturer, nor an affiliate, exerts any direct or indirect influence or control over the charity or the subsidy program, The charity awards assistance in a truly independent manner that severs any link between the manufacturer s funding and the beneficiary, The charity awards assistance w/o regard to the manufacturer s interests and without regard to the beneficiary s choice of product or healthcare provider, and The manufacturer does not solicit or receive data from the charity that would facilitate correlating the amount or frequency of donations with the number of subsidized prescriptions for its products 9

10 Independent Foundation PAPs 2013: reports that manufacturers were using charitable donations for commercial purposes 2014: OIG emphasized need for independence of charities Narrowly tailored disease funds that cover few products, or that apply differing eligibility criteria, benefit designs, or off-label policies for certain funds but not others, will be scrutinized closely fund to be defined consistent with widely recognized clinical standards and in a manner that covers a broad spectrum of available drugs OIG investigation & meetings with various large foundations (e.g. CDF, etc.) 10

11 Manufacturer PAPs Should either exclude federal program beneficiaries or should be structured such that free or reduced price product provided to federal program beneficiaries is provided outside of the federal program benefit. Patient must not be able to seek reimbursement from the federal program; Medicare Part D beneficiaries (if applicable) must not count the cost of the free product towards True Out of Pocket Costs (TrOOP) (for Medicare, one option is to enter a data sharing agreement with CMS). Any federal program beneficiaries who get assistance would need to stay in the PAP for at least the program year, but potentially for life of therapy. If Medicaid or Medicare subsequently covers the cost of the product, there is a risk that the PAP could be viewed as a means to steer patients to the drug. The above features (e.g. a data sharing agreement, operating outside of the benefit, etc.) mitigate this risk. 11

12 Co-Pay Assistance Programs 12

13 Coupons/Co-Pay Cards Characteristics of coupons/copay cards: Reduction in patient out-of-pocket cost for a drug w/o regard to financial need offered to help offset high co-payment amounts set by formulary committees paper coupons, co-pay cards or debit cards In the form of for as low as, percentage off, and fixed amount off out-of-pocket cost May have multiple times use 13

14 OIG Guidance Re: Copayment Coupon Programs 2014 OIG Report Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs, discusses results of a study of 30 manufacturers of the top 100 Part D brand-name drugs with coupons and with the highest Medicare expenditures OIG published a special advisory bulletin on Pharmaceutical Manufacturer Copayment Coupon Programs OIG found: manufacturers current safeguards do not prevent coupons for being used where part D applies CMS cited a third-party report suggesting a 6-7% error rate 14

15 OIG Report Publishing terms and conditions/eligibility requirements not sufficient Manufacturers offering coupons may be subject to sanctions if they fail to take appropriate steps to ensure that such coupons are not used by federal program beneficiaries Failure to take steps may = evidence of intent to induce the purchase of drugs paid for by federal healthcare programs Manufacturers may engage industry stakeholders, including CMS, to identify a solution so that coupons are not used for drugs paid by Part D Manufacturers and pharmacies have the responsibility to be in compliance with law 15

16 Developments National Counsel for RX drug Programs(NCPDP) established a task force to review coupon programs Consists of pharmacies, payors, CMS, vendors, and pharmaceutical companies Recommendations to CMS, and then to OIG 16

17 Reimbursement Support Services 17

18 OIG Guidance According to OIG, manufacturers can provide limited reimbursement support in connection with the sale of their products without violating the AKS No payment for service Must be part of the purchase of a drug But, not: Offer a guarantee, or too much service Free goods/services or below the fair market value could yield AKS 18

19 Landscape Seems to be a high priority & trend within the industry Multiple cases 19

20 First Example-Novartis Allegations Incentives not within written agreement Incentives to specialty pharmacy to switch patients to Novartis drugs Call center called patients to gain consent for refills Higher pharmacy rebates based on higher refill rates and switches 370 million..

21 Landscape Issues include: Company reps acting on behalf of doctors Company reps accessing to patient records Company reps completing PA and appeal forms Providing correct ICD-9 codes to HCPs Improper relationships w/ independent copay assistance foundations Specialty Services instructing off-label use of products 21

22 Summary Training and Monitoring: PA and appeal forms Training and Monitoring: Patient records Policies and Procedures: discussions with HCPs in re managed care and discussions with/about specialty pharmacies Policies/Monitoring/Contracting: design parameters around your assessment of limited support? Implement these programs as part of your live and in house monitoring program. 22

23 Summary Continued Contract should have all the terms of the agreement business rules/processes Pharmacy should be independent of manufacturer Have an idea of all the touch points between a patient and the pharmacy (potential additional activities) Understand what communications are being given in re safety & your medication Consider onsite monitoring

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