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Financial Assistance from a Pharma Company

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Are pharmaceutical companies allowed to provide financial assistance for travel, lodging and other expenses to certain patients? Join FDA regulatory attorney Darshan Kulkarni as he discusses why the Office of Inspector General (OIG) decided in favor of financially helping patients, and what the implications of this decision may be.

Darshan: So let's ask a question. Is it legal for a pharmaceutical company to provide financial assistance for travel, lodging and other expenses to certain patients prescribed the manufacturer's drug?

Narrator: This is the Darshan Talks Podcast. Regulatory guy, irregular podcast, with host Darshan Kulkarni. You can find the show on Twitter @darshantalks or the show's website

Darshan: This was an OIG opinion from January 2020. And I thought it would make sense to explore exactly what the OIG gave an opinion on, what the implications are, and why it matters.

Darshan: So the drug in question is a personalized medicine made from the patient's own cells in a one time potentially curative treatment. The drug is approved for one of two indications, it's either refractory or recurrent. Generally affects children or young adults, or it's affecting adults. So what is the drug itself? It's a drug that has what's called a REMS on it and only REMS certified physicians can ... treat the disease using the drug.

Darshan: The physicians who are allowed to do this, they accept the responsibility for implementing the necessary safety protocols and may prescribe and administer the drugs. Consistent with the REMS, the requestors enter into arrangements with certain inpatient/outpatient facilities, which we're calling the centers, to infuse the drug.

Darshan: These facilities also additionally perform leukapheresis and collect, process, package, and ship the patient's white blood cells to the requestor, so that requestor may use the patient's cells. The requestor being the pharmaceutical company in this specific instance, I expect ... May use the patient's cells to individually manufacturer the drug.

Darshan: So what does the center need to be able to do? The facility, the center must meet applicable regulatory requirements for third party cell collection, processing and other requirements, including having onsite immediate access to the drug itself, which is used to treat severe instances of therapy related syndrome.

Darshan: Essentially they need to be able to manage results that can come out ... the adverse events of this drug and of disease itself. They must ensure that physicians who prescribe, dispense or otherwise administer the drug, are trained in the management of the syndrome and potential neurological toxicities.

Darshan: And the pharmaceutical manufacturer in this specific instance certifies that it does not require either the physicians or the centers to prescribe the drug exclusively. And that any facility that meets all the REMS with the ETASU requirements and the requestor's criteria may become a center. So the key piece here is, why is the proximity necessary?

Darshan: The proximity of the center is necessary because, A, number one to handle the fact that these patients may be required to stay there for a little bit, and only certain facilities can handle it and handle the training that's required. Under the arrangement, the pharmaceutical company proposes treating eligible Disease A patients, being the older patients, and disease B patients as well.

Darshan: And depending on whether you have Disease A or Disease B, they give up to two caregivers for lodging, travel, meals and certain out of pocket expenses. So if you're a child, you'd get two caregivers. I expect it might be the parents ... up to two caregivers.

Darshan: For Disease B, patients who are 26 and older, they provide the same level of support for a patient and one caregiver. The requestor does not provide assistance with patient travel or expenses associated with the initial patient consultations with the leukapheresis, or following up visits beyond the post infusion monitoring required by the drugs prescribing information.

Darshan: The requestor does not authorize lodging under the arrangement to a patient being treated by the center when the pharmaceutical companies knows that the patient's eligible to receive lodging from the center and such lodging is available for that patient's use.

Darshan: Requestor has also certified that it does not advertise the arrangement. Patients do not learn about or become eligible for the arrangement until they've been diagnosed with the disease ... with either one of the two diseases, if you will, and until they've been diagnosed. So it's not like you can entice someone to stay over with it.

Darshan: So what would be provided? The requestor would offer to provide reimbursement for the gas and tolls or arrange for transportation by bus, rail, rental car, or air travel. They would use potential third party travel vendors. And the assistance is available for one round trip for the patient's and each caregiver's place of residence to a center.

Darshan: The requestor would also reimburse certain out-of-pocket expenses up to $50 per day per person. To receive the reimbursement, the patients or caregivers must submit written receipts to the requestor documenting the expenses. Patients may receive assistance for four weeks post infusion. However, if the patient's physician determines that it's medically necessary, it may go further than four weeks.

Darshan: So who's actually eligible? Eligible patients who have been prescribed a drug for an ... FDA approved indication and have a household income that does not exceed 600% of the federal poverty level. And who live more than two hours driving distance or over a hundred miles from the nearest center. So the idea would be that it's not just given to everyone, it's only to the people who need it and don't actually live close by.

Darshan: The requestor certified that the median household income for patients who received the assistance under the arrangement was $28,000 per year. And families with an annual household income of $28,000 per year would have difficulty affording travel to and a month long stay near a center for treatment. This is in line with certain other criteria.

Darshan: The travel, lodging, other assistance that the requestor offers beneficiaries, allows them to travel to and stay near a center may not actually be available otherwise. And for this lodging, the requestor provides that the arrangement ... the physicians must meet the FDA requirements, and this remuneration relates to expenses incurred by patient. And the processes that's required are actually in line with what the FDA is expecting.

Darshan: So it's necessary for the support for the financially needy patients. So the CMS technically, in this case, OIG, is open to the idea because of the very unique circumstances here. Is there a risk that the manufacturer's actions may limit drug distribution networks to particular facilities to reward their physicians and create risks under the anti kickback statute? There is a risk for that. There's no doubt about it.

Darshan: However, the pharmaceutical company is providing assurance that any willing provider that meets the uniform center eligibility criteria may participate in the arrangement. It does limit the likelihood the requestor uses the arrangement to reward a certain number of center physician. So it's not like they're specifically going after specific physicians.

Darshan: What about the risk for future marketing? Is this a type of seating trial, is this a type of seating? And what they're discovering is that it's a onetime treatment, it's potentially curative. So it's not like this causes the patients to come back over and over and over again. And additionally, these patients are not close by, they're actually over 100 miles from the closest center. So it's not like they're just going and bringing someone who lives five miles away. So OIG was actually open to this.

Darshan: Additionally, is there a risk of beneficiary inducements under CMP? And for that you need to generally do up to a three step process of analysis. So is the arrangement likely to influence a beneficiary selection of a particular provider? And the requestor assist eligible Disease A patients or Disease B patients up to two caregivers? These are valuable benefits. Therefore, an additional analysis needs to be done.

Darshan: The next question to ask is, does the remuneration offer improve a beneficiary's ability to obtain items and services payable by Medicare or Medicaid? So there's no existing authority that could pay the Secretary of HHS to pay for the nonmedical items and services such as lodging and travel. The pharmaceutical company certified that it would not authorize lodging to treat patients who would be treated by the center itself.

Darshan: Therefore, the assistance does not duplicate other available charitable assistance from the center. And therefore does the remuneration provided under the arrangement pose a low risk of harm to Medicare and Medicaid beneficiaries? And under the Promotes Access to Care exception to the Beneficiary Inducements Civil Monetary Penalties, it's a low risk of harm if it is unlikely to interfere with or skew clinical decision making, it's unlikely to increase cost to federal healthcare programs or the beneficiaries through over utilization or inappropriate utilization, and does not raise patient safety or quality of care concerns.

Darshan: So in this specific instance, they're actually adhering to the drug's REMS with the elements to assure safe use. And therefore to increase access to care for financially needy patients, this actually presents a low risk of harm and satisfies the Promotes Access to Care exception to the Beneficiary Inducement CMP.

Darshan: So overall, OIG said that in this specific instance they would allow for this type of assistance, this type of financial assistance. So it's interesting, unusual, even though the OIG said that you probably [Inaudible 00:09:58] they will allow it in this specific instance. Stay tuned, listen in, find out more about how this might play out.

Narrator: This is the Darshan Talks Podcast. Regulatory guy, irregular podcast, with host Darshan Kulkarni. You can find the show on Twitter @darshantalks or the show's website

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