In honor of Rare Disease Day on February 28, 2025, Morgan Lewis is publishing a series of posts on As Prescribed and Health Law Scan throughout the month of February on issues impacting the rare disease community.
Challenges for stakeholders in the rare disease space are well known. Indeed, the “rare” moniker applies to and affects every aspect of the treatment lifecycle. Limited patient populations make for challenging clinical trials, especially given the financial burden these disease states often have on patients and their families. Moreover, it is difficult to identify patients that may need therapies without genetic testing.
As such, it’s unsurprising that stakeholders, like pharmaceutical manufacturers, have attempted to design arrangements that facilitate and improve patient care. The US Department of Health and Human Services Office of Inspector General (HHS OIG) has recently focused on such programs and arrangements, issuing multiple Advisory Opinions (AOs) in 2024 that provided more clear regulatory guardrails for stakeholders as they consider the design of similar programs in the future.
The programs analyzed by HHS OIG in these AOs—programs involving financial assistance and/or free genetic testing services for patients—are important for stakeholders to consider as they consider implementing similar programs in the future or ensuring compliance with current operations.
Genetic Testing – AOs 22-06 & 24-12
AO 22-06 marked one of the first HHS OIG ventures into the evaluation of arrangements between pharmaceutical manufacturers, healthcare providers (HCPs), and beneficiaries that suffer from rare disorders. And its analysis provides helpful context for the AOs that followed in 2024. In AO 22-06, HHS OIG evaluated an arrangement submitted by a pharmaceutical manufacturer that produces a drug designed to treat a rare hereditary form of a disorder that affects the heart and can lead to heart failure. Under the arrangement, the manufacturer would provide free genetic screening and counseling services, specific to the single disorder, to eligible patients.
Notably, while the arrangement did provide for the manufacturer’s sales representatives to distribute materials about the genetic testing, the manufacturer explicitly represented that it would not provide its sales representatives with materials that included any HCPs’ utilization of the arrangement or HCPs’ prescribing history.
HHS OIG found the arrangement presented a low risk of fraud and abuse, noting that it did not present a sufficient “nexus” between the genetic testing and counseling and the ultimate prescribing of the requestor’s drug. The opinion highlighted the safeguards in place to prevent the manufacturer from using the arrangement as a marketing or sales tool to induce the order of its products and/or medications. HHS OIG issued a similarly favorable analysis of a genetic testing arrangement in late 2024. In AO 24-12, the requestor was a pharmaceutical manufacturer of a drug designed to treat an ultra-rare genetic condition that causes the overproduction and accumulation of oxalate, resulting in recurrent kidney stones and chronic kidney disease. The condition is caused by genetic mutations and manifests in three subtypes of the disease.
Genetic testing for the disease could come in three forms, each progressively narrower and more tailored to identifying potential mutations. Under the arrangement, the manufacturer would provide one of the three types of genetic tests, provided by a third-party testing laboratory, to patients that met certain clinical criteria free of charge. The genetic testing would be in conjunction with general, unbranded, disease state awareness educational materials as well as genetic counseling.
Like the program addressed in AO 22-06, the requestor also expressly represented that it would not receive identifiable patient data or any information identifying the HCPs that order the tests from the genetic testing lab. The manufacturer went further by certifying “it does not, will not, and could not use the Arrangement to target specific health care professionals who might prescribe the Drug.”
As with AO 22-06, HHS OIG concluded that it would not pursue administrative sanctions against the manufacturer in connection with the arrangement. The AO supported this conclusion by referencing similar factors that made the arrangement low risk for fraud and abuse, specifically with respect to potential overutilization of the arrangement and clinical decision-making. Importantly, HHS OIG explicitly cautioned that it would have likely reached a different conclusion if “there were any sharing of data with Requestor that would allow it to target marketing of the Drug based on the arrangement.”
Financial Assistance – Advisory Opinions 24-03, 05, 06 & 13
HHS OIG addressed four arrangements submitted by pharmaceutical manufacturers that involved forms of financial assistance for patients with rare disorders. Three AOs—03, 05, and 06—involved the manufacturer of a one-time, potentially curative gene therapy designed to treat a severe disorder that typically required patients to undergo regular blood transfusions. The gene therapy requires patients to stay in a designated treatment center for four to six weeks after infusion.
AO 24-13 addressed an arrangement submitted by a manufacturer of a similar one-time, potentially curative T-cell immunotherapy. This treatment also required patients to stay at a designated treatment center between one and five days to collect cells from a tumor sample to create the immunotherapy product and an additional seven days for chemotherapy and infusion of the treatment.
Each arrangement HHS OIG analyzed involved financial assistance in the form of lodging, transportation, and other costs associated with the treatment center stay, which are more typical forms of support provided by manufacturers to patients. In AOs 24-03, 05, and 06, the manufacturer’s program also involved costs associated with fertility treatments and services. The manufacturer-requestor certified to HHS OIG that the gene therapy presented a risk of infertility and patients may otherwise not take the treatment because of their inability to afford fertility treatments.
HHS OIG stated that it would not impose sanctions on the first form of financial support. In each AO, HHS OIG found that the proposed arrangement was sufficiently low risk because of factors associated with the gene/immunotherapy treatments. These factors not only included factors typical of HHS OIG’s past guidance, such as eligibility determinations for low-income patients and that the gene therapy was a one-time treatment less susceptible to abuse, but also an explicit recognition that the support removed a barrier for patients to medically necessary care.
The fertility treatments did not receive such favorable treatment. HHS OIG ultimately found that there was simply not enough data to determine whether covering the costs of those treatments presented a sufficiently low risk of fraud and abuse. AOs made clear, however, that HHS OIG could change its position based on continued analysis of data including costs, benefits, and outcomes of fertility treatments. This included an express suggestion that the Centers for Medicare and Medicaid Services could test a model of including fertility services through the agency’s “Innovation Center.”
Key Takeaways
At bottom, the recent AOs demonstrate that HHS OIG has found arrangements where pharmaceutical manufacturers provide certain forms of financial assistance and cover costs of genetic testing and counseling to present low risk of fraud and abuse, with the appropriate guardrails.
Stakeholders should ask the following important questions about any arrangement that has similar goals:
- What data is produced by the arrangement? Who has access to the data, and how is it utilized?
- How are third parties (e.g., laboratory testing companies) compensated by the manufacturer for services?
- What services and/or expenses are being covered by the manufacturer?
HHS OIG’s foray into rare disease is undoubtedly helpful to stakeholders as more and more begin to design programs to help patients. But this guidance should not lull stakeholders into a false sense of security. Check back in to Health Law Scan next week to read about the potential enforcement risks presented by assistance programs.