A drug manufacturer’s savings card program or discount coupon under which individuals who have Medicare Part D prescription drug coverage receive discounts may violate the Anti-Kickback Statute (“AKS”), unless the drug being purchased is statutorily excluded from Part D coverage. The key here is that the drug must be excluded from Part D coverage for there to be no AKS violations. If the drug is covered by Part D, there is a great possibility that the discount program could generate prohibited remuneration under the AKS if the manufacturer intends to induce or reward referrals of Federal health care program business.
The Anti-Kickback Statute
The AKS makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. See 42 U.S.C. 1320a–7b. The AKS has been interpreted to cover any arrangement where one purpose of the remuneration was to obtain money for the referral of services or to induce further referrals. See, e.g., United States v. Borrasi, 639 F.3d 774 (7th Cir. 2011)
Drug Manufacturer’s Savings Card Program or Discount Coupon May Violate the AKS
Individuals who have prescription drug coverage through Medicare Part D (“Part D Beneficiaries”) may receive a savings card or discount coupon issued by a drug manufacturer to receive discounts when they fill their drug prescriptions.
Part D Beneficiaries present the card or coupon to their pharmacists along with their drug prescriptions to receive discounts on out-of-pocket costs, including copayments and deductibles that they incur when purchasing the drug.
Copayment coupons constitute remuneration that is offered to consumers to induce the purchase of specific items. When the item in question is one for which payment may be made, in whole or in part, under a Federal health care program (including Medicare Part D), the anti-kickback statute is implicated. See Special Advisory Bulletin on Pharmaceutical Manufacturer Copayment Coupons (Sept. 2014), (the “Bulletin”).
Copayment coupons may induce the purchase of federally payable items in two ways.
-First, as described in the Bulletin, copayment coupons may induce the purchase of the specific items that are the subject of the coupons by reducing or eliminating Federal health care program beneficiaries’ out-of-pocket costs for those items.
-Second, copayment coupons may induce the Federal health care program beneficiaries who receive them to purchase other federally payable products manufactured, marketed, or distributed by the manufacturer that issued the coupon.
Purchasing Drugs That are Statutorily Excluded From Part D Coverage
Some drugs are covered by many private insurance plans and by some Federal health care programs, including state Medicaid programs and TRICARE, while being statutorily excluded from coverage under Medicare Part D.
If the drug is statutorily excluded from coverage under Medicare Part D, individuals who are enrolled in Medicare Part D may purchase the drug with a manufacturer’s savings card or discount coupon because such individuals are, in effect, cash-paying customers when filling their drug prescriptions. When this is the case, the Office of Inspector General (“OIG”) will not impose administrative sanctions under the AKS. See OIG Advisory Opinion No. 16-07 (drug for the treatment of erectile dysfunction is statutorily excluded from coverage under Medicare Part D).
This statutory exclusion serves as an effective backstop that prevents the discount card or coupon from inducing the purchase of a drug payable by Medicare Part D.
Furthermore, the risk that the Part D Beneficiaries who use the discount card or coupon will purchase other federally payable products manufactured, marketed, or distributed by the same drug manufacturer is low, especially where the manufacturer certifies that it does not and will not use the discount given on the Part D excluded drug as a vehicle to market other products it manufactures, markets, or distributes to Federal health care program beneficiaries.
 available at: http://oig.hhs.gov/fraud/docs/alertsandbulletins/2014/SAB_Copayment_Coupons.pdf