Charity drug programs get tentative go-ahead

Pharmaceutical firms can help Medicare drug plan enrollees with medication costs, says a federal advisory opinion.

By David Glendinning, AMNews staff. May 8, 2006.

Washington -- Some low-income patients who were facing a difficult choice between signing up for Medicare's drug benefit and continuing to receive charity medications were granted a reprieve last month.

The Dept. of Health and Human Services Office of Inspector General issued an advisory opinion April 18 that clarifies the ways in which drugmakers can use patient assistance programs to keep offering free or discounted medications to low-income seniors and disabled people -- even if the beneficiaries decide to opt for drug coverage through Medicare Part D.

Last year, the OIG issued an advisory bulletin that effectively prohibited companies from offering most kinds of patient assistance to drug benefit enrollees. The action resulted from concerns that drug firms could implement kickback schemes by offering free drugs to seniors during gaps in Medicare's coverage and then benefit from federal payments for these medicines once the coverage started up again.

In its more recent opinion, issued in response to a specific request by the drugmaker Schering-Plough, the OIG said two assistance programs offered by the firm would not be subject to administrative sanctions. While the possibility for kickbacks still exists under the arrangements, the programs would appropriately minimize this risk by operating completely outside of the Medicare benefit, wrote Lewis Morris, OIG's chief counsel. The programs neither would involve the use of any federal funds nor base medication support on beneficiaries choosing a particular Medicare drug plan, he wrote.