The Department of Health and Human Services Office of Inspector General (OIG) has issued an advisory opinion, concluding that it would not impose monetary sanctions on a pharmaceutical manufacturer’s program to cover travel, lodging, and related expenses for families seeking a one-time stem-cell-based gene therapy.  

According to the OIG opinion, the arrangement could implicate, both the federal Anti-Kickback Statute (AKS) and the Civil Monetary Penalty Law (CMPL) but it poses a sufficiently low risk of fraud and abuse.

Assistance available for children in gene therapy

The arrangement involves children diagnosed with an ultra-rare disease for which the approved gene therapy—priced at more than $4 million—offers the only FDA-cleared treatment option. There are also a limited number of treatment centers and thus only a limited number of physicians who can administer the therapy. Eligible patients may live hundreds of miles away and could require an extended inpatient stay after infusion.

To remove these geographic and financial barriers, the manufacturer will offer (1) coach airfare or train fare (for patients who live more than 300 miles from the closest treatment center) or reimbursement for ground transportation (for distances greater than 100 miles or 2 hours of driving time); (2) a modest hotel room for patients and caregivers living more than 100 miles or 2 hours driving distance from the closest treatment center; and (3) a daily meals-and-incidentals stipend pegged to the General Services Administration per-diem rate. Assistance is limited to families with household income below 600 percent of the Federal Poverty Level and is available only when comparable support is not provided by insurers, the hospital, or a charity.

OIG found program safeguards mitigate risk

OIG acknowledged that the travel package would constitute “remuneration” capable of influencing both patients and the treatment centers that bill for administering the therapy—thus triggering AKS concerns. The agency nevertheless emphasized several safeguards that mitigate risk:

• The program is needs-based and narrowly tailored, available only to families who would otherwise struggle to reach a treatment center.
• Clinical decision-making remains independent; physicians must already have prescribed the drug on-label before any assistance is discussed.
• The drug is a one-time therapy, eliminating the “seeding” danger that free services could generate future, reimbursable refills.
• The manufacturer verifies insurance coverage and income, prohibits double-dipping, and bars caregivers from billing any federal program for the subsidized costs.
• Field representatives disseminate non-promotional, pre-approved information and do not tout the travel benefit as a reason to prescribe.

OIG also found that the arrangement satisfies the “Promotes Access to Care” exception to the CMPL because it enhances patients’ ability to obtain a medically necessary, federally reimbursable treatment without skewing utilization, inflating costs, or compromising quality of care.

Why this opinion matters

The advisory opinion provides a practical roadmap for life-science companies designing patient-support initiatives around high-cost, site-restricted therapies. Key compliance lessons include: ground the assistance in demonstrable patient need; cap benefits at reasonable, objective thresholds; coordinate with insurers and charitable foundations to avoid duplicate payment; and maintain a clear firewall between clinical decision-making and financial support. Companies that replicate these safeguards can expand access to breakthrough treatments while minimizing enforcement risk.

OIG’s favorable view confirms that thoughtfully structured, means-tested travel programs can survive AKS and CMPL scrutiny, even when tied to ultra-expensive products. As precision-medicine and cell and gene therapies proliferate, stakeholders should expect—and plan for—continued regulatory emphasis on balancing patient access with fraud-and-abuse safeguards.

Reed Smith will continue to follow developments with regard to fraud and abuse enforcement. If you have any questions about this advisory opinion or would like to seek an advisory opinion of your own, please do not hesitate to contact the author or your health care attorneys at Reed Smith.