Kickback Concerns Shouldn’t Prohibit Manufacturers From Offering Assistance For Drugs Without Cheaper Alternatives

Infusion Association Asks For Kickback Safe Harbor For Expensive Biologics

Drug manufacturers routinely offer copayment coupons to reduce or eliminate the cost of patients’ out-of-pocket payment for certain drugs. This financial assistance can be especially beneficial for patients who require expensive biologic therapies with large co-pays. Last year, the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) released a report that such coupons may run afoul of the federal anti-kickback statute if they encourage the purchase of drugs paid for by government funded programs. Essentially, the OIG is worried that companies will offer Medicare patients co-pay reimbursement or other financial assistance to entice them to choose expensive brand-name drugs that the government will have to pay for, instead of readily available generics.

The National Infusion Center Association (NICA) recently released a position paper arguing against the government’s prohibition of such financial assistance for certain revolutionary biologic therapies. “The problem with the government’s well‐intentioned statute,” the Association argues, “is that it only works when there IS a cheaper generic alternative medication available.”

Indeed, “biologic specialty medications and IVIG [Intravenous Immune Globulin] have no cheaper generic alternative options, leaving many government funded patients backed into a financial corner with limited treatment options,” states the paper.     

NICA provides an illustration of how copayment assistance can help a person who takes Remicade for Crohn’s disease, for example. Remicade currently is not available in a generic (or “biosimilar”) form—the alternatives are “much older standby therapies,” notes the article.

A Medicare Patient receiving an every 8 week infusion of Remicade 600mg for a chronic condition known as Crohn’s disease.   At the time of this article, the Medicare reimbursement for this medication is approx: $4,590 per treatment or $32,132 per year (7 Treatments) for the medication alone. For a Medicare patient without a secondary insurance or supplemental coverage, the out of pocket cost for the medication (20%) is: $918 per treatment, or about $6,426 per year.  

“The majority of government payer patients who cannot afford the premiums for the secondary or supplemental coverage they need, will also not be able to afford the $6,000‐10,000 annual out of pocket cost for biologic or IVIG medications,” NICA states.

While NICA agrees that co-pay reimbursement or financial assistance programs could result in shifting patients to more expensive branded drugs, that risk simply doesn’t exist for biologics like Remicade. Thus, as a solution, NICA recommends that the OIG, HHS, CMS and other governing authorities should develop a clear cut safe harbor for manufacturers that allows patients with government funded health insurance to participate in manufacturer copayment financial assistance programs when there is not a cheaper generic alternative medication option available to the patient.

View the National Infusion Center Association’s full position paper here.