OIG Greenlights Manufacturer’s Travel-Related Financial Assistance Offering

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On June 17, 2024, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) posted a favorable Advisory Opinion 24-03 (“AO 24-03”) involving a pharmaceutical manufacturer’s proposed patient assistance program providing travel-related financial support to qualifying patients and caregivers. AO 24-03 is the OIG’s fifth advisory opinion addressing a manufacturer-sponsored patient assistance program since February 2023.1

The Product

The proposed arrangement was submitted by the manufacturer of a gene therapy product approved by FDA to treat two types of blood disorders in patients 12 years and older. The product is created using the patient’s blood stem cells, which are edited and then infused back into the body through a hematopoietic stem cell transplant. The product is administered as a one-time therapy with the goal of curing the condition.

To obtain treatment, the patient must travel to an approved treatment center and undergo one or more consultations with an affiliated physician. If the physician deems the product medically necessary, the patient receives the treatment at the approved center. The prescribing physician manages the patient’s medical care throughout treatment and recovery in consultation with the treatment center’s care team.

The treatment involves multiple patient encounters and treatment center admissions because the product is manufactured using the patient’s own blood stem cells. First, the patient will likely undergo one or more red blood cell transfusions. Second, the patient’s stem cells are collected and stimulated out of the bone marrow and into the bloodstream, a process known as mobilization. Third, the manufacturer creates the product by editing the patient’s blood stem cells. Fourth, the patient must undergo myeloablative conditioning (high-dose chemotherapy), which removes cells from the bone marrow and allows for the subsequent introduction of the edited cells. Lastly, the patient is admitted to the treatment center for recovery and observation for four to six weeks to ensure the patient does not experience any significant complications, including but not limited to neutropenia, thrombocytopenia, leukopenia, anemia, and lymphopenia.

The manufacturer intends to approve 50 treatment centers across the United States over 18 months. Because of the cap on the number of treatment centers, the number of physicians who can administer the treatment will be limited to those affiliated with an approved location. The manufacturer will provide potential patients with a locator on its website that generates a list of treatment centers closest to the patient’s location. The manufacturer’s locator tool will rank treatment centers by geographical proximity to the patient without regard to any prior or future volume or value metric.

The Proposed Arrangement

The manufacturer intends to make financial assistance available for certain travel, lodging, meals, and other related expenses. For patients 26 years of age or older, the assistance program offers financial aid for the patient and one caregiver. The program allows additional assistance for a second caregiver if the patient is under 26 years of age. The program’s inclusion of caregiver assistance is intended to help reduce complications and improve the overall treatment outcome. According to a manufacturer-provided study, a dedicated caregiver improved the patient’s survival rate compared to patients without a caregiver. The program is open to all qualifying patients, including federal healthcare program beneficiaries.

To qualify, the patient must (1) be a U.S. resident, (2) have an income at or below 600% of the federal poverty level, (3) have been prescribed the product for an approved use, and (4) lack coverage for the travel expenditures through their insurer or third-party organization. If a patient obtains partial coverage for the ancillary expenses through an insurer or third party, the party may still seek assistance for any qualifying noncovered expenditure.

The available financial assistance includes (1) airfare for patients living 300 plus miles from the nearest available treatment center; (2) ground transportation for patients living between 100 and 300 miles from the nearest available treatment center; (3) lodging costs for those traveling more than 100 miles; (4) a $50 per person per diem limit for meals; and (5) up to $50 in assistance to cover daily travel expenses related to parking, gasoline, or ride-sharing and taxi services. The manufacturer has contracted with a third-party travel vendor to facilitate the program’s airfare, ground transportation, and lodging components. The manufacturer will administer the program’s meal and local travel component. The financial assistance available for meals and local travel is limited to the actual expenses incurred by the patient and caregiver and requires the submission of receipts to obtain reimbursement.

The manufacturer certified that it would implement several safeguards designed to mitigate the risk of abuses relating to assistance programs. First, the manufacturer will not advertise the availability of the assistance program beyond providing a general overview of available resources and eligibility requirements to the treatment centers, physicians, and patients. Second, the manufacturer will not leverage the assistance program to drive product selection, utilization, or referrals. Third, the manufacturer will not require the treatment centers or physicians to enter into an exclusivity agreement requiring them to use the product to treat the condition.

The OIG’s Analysis

The OIG determined that the proposed arrangement would implicate the federal Anti-Kickback Statute (“AKS”). The proposed arrangement implicates the AKS because the financial assistance includes remuneration that could induce the patient to select the product over a therapeutic alternative. The proposed arrangement also implicates the AKS through the manufacturer’s transfer of indirect remuneration to the treating physicians and treatment centers (through their ability to obtain federal healthcare program reimbursement for administering the treatment) because the program allows a patient to seek treatment at a location that they would not have otherwise selected but for the financial assistance.

The proposed arrangement was unable to satisfy any AKS safe harbor. However, the OIG concluded that the risk of fraud and abuse generated by the proposed arrangement under the AKS was sufficiently low based on a combination of four reasons, including:

  1. The assistance program improves access to care by subsidizing travel expenses for patients who could not obtain the potentially curative treatment because travel to one of the 50 approved treatment locations was unaffordable.
  2. The assistance program facilitates compliance with FDA label instructions requiring a four- to six-week hospital stay, and constant caregiver attendance was warranted because it would likely improve the overall success of the treatment.
  3. The assistance program is distinguishable from problematic seeding arrangements because the product is a one-time, potentially curative treatment. The risk that the assistance program would result in an increase in future federal healthcare program expenditures is significantly reduced because the patient is not required to continue medication therapy or obtain additional treatments after receiving the financial assistance.
  4. The assistance program includes safeguards that ensure no exclusivity requirement; limit the ability to market the program to drive product selection, utilization, or referrals; and limit access to assistance if the patient obtains coverage for travel-related expenses from an insurer or third party.

The OIG next analyzed the proposed arrangement under the Civil Monetary Penalties Law beneficiary inducement prohibition (“Beneficiary Inducement CMP”). The Beneficiary Inducement CMP is designed to prevent the distortion of the healthcare system that occurs when federally reimbursed patients are directed to providers for reasons other than legitimate reasons, such as quality or cost. While pharmaceutical manufacturers are not typically subject to the Beneficiary Inducement CMP (because they are not providers, practitioners, or suppliers), a manufacturer may nonetheless implicate the prohibition where the arrangement includes remuneration that would induce the beneficiary to obtain an item or service from a particular provider, practitioner, or supplier paid for, in whole or in part, by Medicare or state healthcare program.

The OIG determined that the proposed arrangement could generate prohibited remuneration because the manufacturer would know that the financial assistance would induce a beneficiary to select one of the approved treatment centers and affiliated physicians over other providers or suppliers not participating in the arrangement. Unless an exception applies, arrangements that generate prohibited remuneration are potentially subject to administrative sanctions. Exceptions include certain waivers of coinsurance and deductible amounts, remuneration covered by an AKS exception or safe harbor, incentives given to individuals to promote preventive care services, and remuneration that promotes access to care and poses a low risk of harm.

The OIG then analyzed the proposed arrangement to determine whether the remuneration was protected under an exception because it promotes access to care and presents a low risk of harm to patients and the federal healthcare programs. OIG has interpreted promoting access to care as remuneration that improves a patient’s ability to obtain medically necessary items or services, including encouraging patients to access care, supporting or helping patients access care, or making access to care more convenient. The OIG concluded that the travel subsidies would improve a beneficiary’s ability to obtain medically necessary items or services by removing or reducing the potential financial and geographic barriers to receiving the treatment.

The second prong of the exception required the OIG to analyze whether the remuneration in the proposed arrangement presented a low risk of harm to patients and the federal healthcare programs. OIG has interpreted low risk of harm to mean the remuneration (1) is unlikely to interfere with, or skew, clinical decision-making; (2) is unlikely to increase program costs or utilization; and (3) does not raise patient safety or quality-of-care concerns.

The OIG concluded the proposed arrangement was low risk because:

  1. The assistance program was unlikely to interfere with or skew clinical decision-making because the remuneration would allow the prescribing physician and treatment center care team to continuously monitor the patient’s recovery and adhere to the FDA’s labeling instructions.
  2. The assistance program was unlikely to increase program costs or service utilization because the product is administered as a one-time, potentially curative treatment, and the remuneration is unlikely to result in future referrals or the ordering of additional medications or treatments.
  3. The assistance program was unlikely to raise patient safety or quality-of-care concerns because the financial assistance is designed to increase patient safety by facilitating compliance with the product’s FDA labeling instructions and safety protocols.

Based on the analysis above, the OIG concluded that the remuneration offered by the manufacturer under the proposed arrangement satisfied the access-to-care exception and would not result in administrative sanctions under the Beneficiary Inducement CMP.


AO 24-03 builds upon prior OIG guidance addressing the risk profile and appropriate safeguards for manufacturer-sponsored patient assistance offerings under the AKS and Beneficiary Inducement CMP. While the totality of the guidance offers a valuable roadmap, it’s important to remember that the favorable opinion is only applicable to the specific facts presented. Manufacturers looking to implement a similar patient assistance program must exercise caution when establishing the specific eligibility, frequency, duration, and marketing criteria regarding a beneficiary’s ability to obtain financial support. Additional consideration must be given to the safeguards necessary to maintain a low-risk compliance profile sufficient to withstand regulatory scrutiny.

For questions about AO 24-03 or any similar arrangement, please contact AGG Healthcare partner David Blank or your regular AGG attorney.


[1] See AO 23-01 (Feb. 23, 2023); AO 23-02 (Feb. 28, 2023); AO 23-08 (Oct. 25, 2023); AO 24-02 (April 11, 2024).