1st Quarter 2007

Patient Assistance Programs for Medicare Part D Enrollees

Recent OIG Opinions Reaffirm the Legitimacy of PAPs and Charitable Co-Pay Foundations

By Steve Chaney

Many questions about how and to what extent pharmaceutical manufacturers can assist Medicare beneficiaries have arisen in the year since Medicare Part D went into effect on January 1, 2006. The Office of Inspector General (OIG) of the Department of Health and Human Services has issued several special advisory bulletins regarding pharmaceutical-manufacturer-sponsored patient assistance programs (PAPs) and Medicare Part D. Many pharmaceutical manufacturers received OIG opinions documenting that the current structures of their assistance programs do not implicate the federal anti-kickback statute.

While OIG opinions pertain only to those entities that requested them and to the programs they describe, the good news is that these recent opinions suggest that the designs of two typical programs do not implicate the anti-kickback statute:

Co-Payment Assistance Grants- These are grants made to independent, bona-fide charitable foundations that provide monetary assistance to help eligible patients with the cost of obtaining medication through their insurance. Many patients enrolled in Part D plans turn to co-payment assistance programs for help with out-of-pocket costs during the year or while in the "donut hole." Pharmaceutical manufacturers donate funds to one or more charitable foundations, which in turn use set criteria to determine eligible applicants and award amounts.

Free Goods Programs- Many manufacturer PAPs donate free product for qualified applicants. Any product provided to a Part D enrollee is completely outside of the patient's Part D benefit (in other words, no claims are filed to the Part D plan) and the cost of the product does not count towards a patient's "true out of pocket expense" or "TrOOP." When operating a PAP under the above model, the Centers for Medicare and Medicaid Services (CMS) strongly encourages the PAP to enter into a voluntary data sharing agreement with CMS.

The summaries above provide a general overview of recent OIG opinions on providing assistance to Part D beneficiaries through PAPs or bona-fide foundation models. More information is available on the CMS Web site (www.cms.hhs.gov/). Pharmaceutical manufacturers may seek an opinion on their specific PAP or other assistance programs from the OIG. If you need help designing or modifying your assistance programs to assist Medicare Part D beneficiaries, please contact Covance today to discuss possible solutions.