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OIG Green Lights Free Genetic Testing Arrangement

by | May 10, 2022 | Articles, News, Open Content

The OIG recently issued an Advisory Opinion approving a proposed arrangement involving the offering of free genetic tests.

Pharmaceutical companies that pay genetic testing companies to provide free genetic tests to patients who may subsequently decide to use pharma companies’ drug products have become a growing concern for the U.S. Department of Health and Human Services Office of Inspector General (OIG) in recent years. However, on April 11, the OIG for the first time issued an Advisory Opinion approving a proposed arrangement involving the offering of free genetic tests (OIG Advisory Opinion, No. 22-06). The new Advisory Opinion suggests that such arrangements will be considered permissible to the extent the marketing risks are controlled and the free screening provided enhances the likelihood of diagnosis and treatment.

The requestor, a biopharma company that manufactures two FDA-approved drugs for treatment of a rare disease that may occur as a result of a hereditary condition, wanted to know if it could offer a free genetic test to screen patients for gene mutations associated with the disease and provide free genetic counseling. The offering would be limited to persons ages 18 and older who’ve been diagnosed with the disease or who haven’t been diagnosed but either have a family member with a confirmed diagnosis of the disease or whose physicians suspects the disease based on clinical evidence.

While acknowledging that the arrangement would raise issues under the Anti-Kickback Statute (AKS) and Civil Monetary Penalty (CMP) law, the OIG concluded that the arrangement posed a low risk of fraud and abuse. Key factors:

  • The requestor certified that it would neither promote use of the medications for patients who haven’t been diagnosed with the disease nor have any financial interest in any other items or services used to treat or diagnose the disorder;
  • The requestor wouldn’t in any way require or incentivize a physician who orders the tests to recommend or prescribe any of its other products;
  • The requestor would contract with and directly pay the vendors that provide the tests and counseling services, while banning the vendors from billing the patients or any third-party payors; and
  • Vendors would also be banned from promoting their other services to the ordering physician, patients, or family members and be required to submit a monthly report to the requestor attesting to their compliance.
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