Summary of article from Arnall Golden Gregory LLP, by David Blank:
On June 20, 2024, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 24-04, favorably evaluating a refund and discount program for a high-cost regenerative therapy for a rare pediatric immunodeficiency disorder. The program, initiated by an international pharmaceutical manufacturer, aims to mitigate financial risks for treatment centers by offering refunds or discounts if insurers reverse coverage decisions or if the drug’s wholesale acquisition cost (WAC) increases. The OIG concluded that the program’s fraud and abuse risks are low due to its narrow scope, lack of therapeutic alternatives, and transparency measures, thus not violating the Anti-Kickback Statute or Beneficiary Inducement CMP. The discount program also meets safe harbor criteria, protecting it from AKS prosecution. This opinion provides a framework for similar programs, emphasizing the need for robust safeguards and compliance with regulatory requirements.