Last week, I attended the American Bar Association National Institute on White Collar Crime in San Diego. I had the opportunity to speak on a panel with a great group of lawyers, which included Laura B. Angelini, Laura G. Hoey, Joseph G. Petrosinelli, and Gregg Shapiro.
The panel discussed the Government’s recent focus on donations by pharmaceutical companies to charity organizations that subsidize copays on expensive drugs. These charity programs are referred to as Patient Assistance Programs (“PAP”). The Department of Justice, led by a team of prosecutors, primarily out of the U.S. Attorney’s Office in Boston, is investigating whether these donations violate the AKS.
It has been widely reported that more than a dozen companies have received subpoenas, the charity organizations are wondering whether they will need to shut down, and patients are growing concerned about their access to these drugs.
Even though the OIG issued guidance in 2005 on how to structure these PAPs to avoid any issue with the Anti-Kickback Statute, today, the Government seems concerned that the charitable organizations are merely a conduit of the pharmaceutical companies to funnel money to patients. It seems the Government is also concerned that the pharmaceutical companies are simply trying to push their own products.
The panel surmised that the Government is most concerned with PAPs that are sharing extensive data with the pharmaceutical company donors, with PAPs that are asking companies to donate a certain amount, situations where the PAPs are working on behalf of donors, and situations where assistance is only provided for donor drugs and not all drugs.
The panel also discussed how the government versus everyone else views co-pays. It appears that the Government views co-pays as a way to give consumers a cost-effective option. The insurance industry uses co-pays for cost sharing among insurance providers.
Defense attorneys on the panel noted that it will be very difficult for the Government to establish “inducement” as required by the AKS because the pharmaceutical company never touched the patient.
While the panel could not agree on how to resolve the problem of access to drugs for patients without a violation of the AKS, some best practices were discussed, which included: (1) pharmaceutical company should wall off the charity from the rest of the company and definitely no one from the commercial team should be involved; (2) budget donations; (3) know what the pharmaceutical company is getting from the charitable organizations; and (4) get a legal opinion.