- A new legal challenge has emerged to the OIG over the ability of Medicare beneficiaries to receive co-pay assistance.
- The Supreme Court has been asked to review HHS’s ban on co-pay assistance programs under the Anti-Kickback Statute.
- Litigation by patient advocacy groups challenging the 2020 HHS final rule allowing co-pay accumulator adjustment programs continues to progress.
Stakeholders continue the legal battle to expand the use of co-pay assistance programs. More recently, there have been three key litigation updates detailed below:
New legal challenge to OIG over ability of Medicare beneficiaries to legally receive co-pay relief from charitable organizations:
On November 9, 2022, Pharmaceutical Coalition for Patient Access (PCPA) archived Suit in the United States District Court for the Eastern District of Virginia for declaratory judgment and injunctive relief against the United States Department of Health and Human Services (HHS), the Secretary of HHS, the Office of Inspector General (OIG) and the Inspector General.
PCPA, a charitable organization, “developed a program that would allow low-income Medicare cancer patients to secure access to Medicare Part D drugs and other health care services they desperately need, using funding provided by drug makers who have developed breakthrough and innovative drug therapies in the fight against cancer”.1
PCPA Challenge a Advisory opinion of the OIGwhich concluded that the PCPA program “if undertaken, would generate prohibited remuneration if the requisite intent were present, which would constitute grounds for the imposition of penalties under sections 1128A(a)(7) and 1128(b) (7) of [Social Security Act].”2 Conversely, the OIG concluded that the proposal “would not constitute grounds for the imposition of sanctions under the Beneficiary Incentives CMP”.3
Specifically, the proposed PCPA program, as characterized by OIG:
“[E]establish a pathway for each funding manufacturer to subsidize cost sharing amounts owed only for its own drugs, not any other funding manufacturer’s drugs.4
This program design would appear to be directly contrary to the 2nd Circuit decision supporting HHS’s denial of a generally similar program proposed by Pfizer, which is also a single-vendor-per-drug program. That case is now under appeal to the US Supreme Court (see below). Of course, we still don’t know if the Court will uphold the 2nd Circuit decision in Pfizer v. HHS, but the new PCPA filing sets the stage for a potential circuit split should the PCPA prevail up to the 4th Circuit.
Among other claims invoking constitutional and administrative law, the PCPA argues that their program does not violate the Federal Anti-Kickback Statute (AKS), pointing to the OIG’s own opinion which noted that “the PCPA program is ‘agnostic ‘ compared to treatments independently selected by the patient’s independent medical provider” and therefore cannot meet the requirements under the AKS.
Co-Pay Litigation Update for Medicare Beneficiaries:
Like us previously reported, the 2nd Circuit issued an opinion in July 2022 to support the findings of the United States District Court for the Southern District of New York that Pfizer’s proposed co-pay assistance program to financially assist Medicare beneficiaries for the his cardiac treatment would violate the AKS. Pfizer filed a motion to summon certiorari on October 7, 2022, following the decision of the 2nd Circuit.
Pfizer argues in its petition that “HHS’s excessive interpretation of [the AKS] outlaws a broad range of routine and beneficial behaviors in connection with federally funded health care,” explaining that “the proposed program would not induce misuse” of its breakthrough therapy. Amicus briefs filed in support of Pfizer underline concerns over excessive criminalization of healthcare professionals and pharmaceutical companies,5 and the importance of being able to provide patients with affordable life-saving treatments.6
The government has until 14 December 2022 to respond.
HIV+ Hepatitis Institute Litigation Update:
As we noted in our previous customer alert, The HIV+ Hepatitis Institute and two other patient organizations filed a lawsuit seeking declaratory and injunctive relief against the 2021 Notice of Benefit and Payment Parameters (“2021 NBPP”) rule, which allows individual insurers and benefit managers pharmaceutical companies to use co-pay accumulators that exclude manufacturer-provided co-pay assistance from the statutory annual cost-sharing limit. On October 28, 2022, HHS moved to dismiss the plaintiffs suit challenging the 2021 NBPP for lack of standing.7 In their filing, the defendants argue that the plaintiffs have not alleged that the 2021 NBPP causes any material, non-speculative harm to their organizational activities sufficient to entitle them to sue on their own behalf. Further, the defendants allege that two of the plaintiffs, the Diabetes Patient Advocacy Coalition and the Diabetes Leadership Council, both did not make sufficient claims that they have identifiable members who have suffered concrete and particular harm from the 2021 NBPP and would therefore have individual standing.8 The motion challenging the position is notable in part because of media reports that the plaintiffs in the lawsuit are funded by pharmaceutical companies.9
On November 14, 2022, the plaintiffs appealed the defendant’s motion to dismiss and subsequently filed an amended complaint on November 18, 2022.10 The amended complaint alleges that the individual plaintiffs suffered direct financial damages from the copay hoarders, specifically that they were forced to pay additional funds out of their own pockets.11
The outcome of the Pfizer, HIV+ Hepatitis Institute and PCPA litigation against HHS could have a significant impact on programs designed to help patients afford their drugs, including charity care, co-pay cards and co-pay assistance programs. Of note, the newly passed Medicare Part D redesign as part of the Inflation Reduction Act will serve to significantly shift financial accountability between Medicare, plans, and manufacturers between now and 2025. This new cost-sharing environment will itself be impacted from decisions made in co-pay care and battery litigation, as manufacturers continue to explore ways to increase patient access and affordability and payers seek to minimize costs.
1 Complaint, Pharmaceutical Coalition for Patient Access v. US et al., (ED Va. filed Nov. 9, 2022) (#3:22-cv-00714).
2 US Dep’t of Health and Hum Servs., Office of Inspector Gen., OIG Advisory Opinion No. 22-19, 12 (issued Sept. 30, 2022).
3 id. at 10pm; See also section 1128A(a)(5) of the Social Security Act.
4 id. at 3.
5 See short for Amicus Curiae Pharmaceutical Research and Manufacturers of America in support of Plaintiff at 2, Pfizer Inc., v. US Dep’t. of Health and Hum. Servs., et al., No. 22-339 (USA November 14, 2022 ).
6 See Short of Amicus Curiae TrialCard Inc. in support of plaintiff at 2, Pfizer Inc., v. US Dep’t. of Health and Hum. Servs., et al., No. 22-339 (USA November 14, 2022 ).
7 Motion to dismiss, Institute for HIV and Hepatitis Policy. et al., v. US Dept. of Health and Human Services, et.al., (DDC filed Oct. 28, 2022) (#1:22-cv-02604).
8 See id.
9 See https://www.statnews.com/2022/08/30/in-a-new-lawsuit-pharma-backed-patient-groups-fight-federal-rule-around-copay-coupons/.
10 See, for instance, Plaintiffs’ Opp’n, HIV and Hepatitis Policy Inst. et.al., v. US Dept. of Health and Human Services, et.al., (DDC filed Nov. 14, 2022) (No. 1:22-cv-02604); Amended Complaint, HIV and Hepatitis Policy Inst. et al., v. US Dept. of Health and Human Services, et.al., (DDC filed Nov. 18, 2022) (#1:22-cv-02604).
11 Amended Complaint, HIV and Hepatitis Policy Inst. et al., v. US Dept. of Health and Human Services, et.al., (DDC filed Nov. 18, 2022) (#1:22-cv-02604).