The US OIG's latest compliance guidance on manufacturer-funded patient assistance foundations

The Office of Inspector General (OIG) of the US Department of Health and Human Services recently issued an advisory opinion supporting the operation of 12 disease-specific foundations funded by pharmaceutical manufacturers. These foundations exist to help patients cover steep drug copays. The OIG's new position underscores a recognition of how important Patient Assistance Programs are in easing the burden of rising drug costs.

Each of these disease-specific foundations is a nonprofit funded by a single pharmaceutical manufacturer, and each funder also manufactures or markets drugs that treat the same disease. The foundations operate as nonprofits with broad community outreach, and patients can apply to them for financial assistance for specific treatments. The foundations do not restrict assistance to patients of particular physicians or pharmacies, nor do they ask which drug or treatment a patient needs; they simply pay for out-of-pocket medicines for the designated disease.

The US Anti-kickback Statute prohibits anyone from offering, paying, soliciting, or receiving any remuneration in exchange for patient referrals. Where a violation is found, the OIG can impose civil monetary penalties. In particular, if an investigation shows that a violator offered, transferred, or received remuneration to influence a beneficiary's choice of a particular physician or drug supplier, it may be deemed unlawful even if no money was paid directly to the beneficiary.

Anti-kickback Statute: Prohibits anyone from knowingly offering, paying, soliciting, or accepting remuneration to induce, or in return for, referrals of individuals for services covered by federal healthcare programs. This includes conduct that influences a beneficiary's choice of a particular provider, practitioner, or supplier.

Civil monetary penalties (CMPs): Fines may be imposed on anyone who offers or transfers remuneration to Medicare or state healthcare program beneficiaries — regardless of whether the beneficiary's choice was actually influenced — as long as the violator knew or should have known it was likely to influence that choice.

As the OIG notes, such arrangements could implicate the Anti-kickback Statute, since drug manufacturers are indirectly providing benefits, through nonprofits, to prospective patients of their own products. However, as long as the arrangement does not influence patients' choice of physician or pharmacy, it will not trigger civil monetary penalties.

The OIG highlighted the following features that reduce legal risk:

Funds based on established disease definitions: ensuring the money is used for appropriate disease treatment.
Assistance regardless of the specific treatment regimen: avoiding favoritism toward particular drugs or therapies.
Limits on information sharing with donors: reducing potential conflicts of interest.
Financial eligibility screening: ensuring assistance is need-based and auditable.

These safeguards help ensure such foundations operate transparently and lawfully, providing essential funding to patients in need without improper influence or conflicts of interest.

The OIG noted that these foundations provide financial assistance only for rare diseases, and that part of the funding goes to non-drug copay items and services that can meaningfully improve patients' lives. However, the OIG's advisory opinion is valid only through December 31, 2026, because the US Congress recently passed legislation revisiting copay obligations under Medicare Part D, which may change how fraud and abuse risks are assessed. The OIG therefore set a two-year term for the opinion, giving the nonprofits enough time to gather the data needed to support these foundations.

This OIG administrative guidance offers useful lessons for Taiwan's National Health Insurance as it faces mounting pressure to reimburse new drugs — a reference point for improving system efficiency and meeting the cost challenges of new therapies.

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