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Do You Offer or Accept Copayment Coupons? OIG says YOU are Responsible for Compliance with Federal Law

Written by: Bridgette A. Wiley

In recent years, copayment coupon programs have become standard promotional practices for both large and small pharmaceutical manufacturers. Co-payment coupons are typically offered to commercially insured patients in order to reduce or eliminate out-of-pocket costs for specific brand name drugs with higher copays.  Since their inception, prescription drug copayment coupon programs have been a source of controversy – favored by brand manufacturers, physicians, and patients, and opposed by generic manufacturers, health insurers, third party payers, and pharmaceutical benefit managers (PBMs).

Last month, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) followed through on its promise in the 2013 and 2014 Work Plans and released a Special Advisory Bulletin directly addressing pharmaceutical manufacturer copayment coupons. The bulletin and its companion report, “Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs” advise that coupon offerors will risk sanctions if they do not take appropriate steps to ensure that their coupons are not inducing the purchase of items or services paid for by Federal health care programs.  This includes, among other things, prescription drugs paid for by Medicare Part D.  Even though this bulletin is directed toward pharmaceutical manufacturers, it is important to note that it applies to any entity offering a copayment coupon, as well as pharmacies that accept such manufacturer coupons.

Theresa Carnegie, Carrie Roll, and I recently published an article on this topic in the Health Care Fraud Report published by Bloomberg BNA. The article, OIG Special Advisory Bulletin Provides Guidance on Application of Federal Anti-Kickback Statute to Pharmaceutical Manufacturer Copayment Coupons, provides an overview of the copayment coupon controversy, examines the OIG Special Advisory Bulletin and companion report, and looks at potential alternatives to copayment coupon programs.

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Theresa advises clients on all aspects of the pharmaceutical supply chain, including counseling industry stakeholders on a range of business, legal, transactional, and compliance matters. She provides clients with strategic counseling and creative business modeling that considers legal restrictions and regulatory risk in light of innovation and business goals.