Not a kickback: Novartis' Kymriah travel assistance program gets a green light from HHS

shows the backs of two female enforcement officers with Police HHS/OIG insignia
HHS' Office of Inspector General has ruled that Novartis' Kymriah Travel Assistance Program doesn't constitute a kickback. (HHS Office of Inspector General)

Normally, a pharma company paying a patient to take its drug looks suspicious—like a kickback—and it’s considered so under federal law. But HHS has just made a special ruling for a novel therapy.

The federal health agency now allows Novartis to pay for travel, lodging, meals and other out-of-pocket expenses for Medicare and Medicaid patients taking its CAR-T therapy Kymriah, the department’s Office of Inspector General said in an advisory opinion (PDF).

The so-called Kymriah Travel Assistance Program assists “eligible low-income patients” with expenses incurred during their travel to receive the drug—and the ensuing post-infusion monitoring phase—at one of some 100 designated treatment centers across the U.S. under an FDA-required safety program.

HHS issued the ruling at the special request of Novartis because otherwise the scheme could be punishable under anti-kickback statue of the Social Security Act. Generally, federal regulators view that these payments could unfairly steer patients to a particular drug and result in increased costs to the federal health system. But Novartis managed to persuade them.

In making the request, Novartis argued that rural patients living far from a treatment center could suffer from significant health risks or even death if they couldn't afford travel. Because of its potentially dangerous side effects, such as cytokine release syndrome, patients who get Kymirah are monitored for at least a month.

RELATED: Novartis' new cell therapy facility could ease manufacturing squeeze for CAR-T med Kymriah

“Due to the nature of the patient population and the serious safety risks associated with Kymriah therapy, financially needy patients may need enhanced support to access their prescribed treatment,” Novartis said in a statement shared with FiercePharma.

Several limitations have been put on the program. For example, patients must live more than two hours’ driving distance or 100 miles from the nearest available center. In addition, Novartis promises not to advertise the arrangement. Patients will not learn about it until they have been diagnosed with on-label indications and are prescribed Kymriah.

Still, while patients might not be tipped off beforehand, caregivers are aware of the existence of the program. Therefore, they may choose Kymriah over Gilead Sciences’ rival drug Yescarta for some patients.

RELATED: Big Pharma's shelling out big-time to patient organizations. Is there any quid pro quo?

Regulators made it clear that the ruling is meant only for this Kymriah program. Gilead didn’t immediately respond to a FiercePharma request about whether it’s seeking a similar opinion for Yescarta.

Currently, Kymriah is trailing behind Yescarta sales-wise, even though it was the first CAR-T therapy approved. In the third quarter, the Novartis drug sold $79 million, and that number went up in the fourth quarter to $96 million. In comparison, Yescarta generated $118 million in Q3.

It wasn’t so long ago when drugmakers paid up millions of dollars to settle federal allegations that they used donations to patient charities as kickbacks to cover copays for their medicines. These include Astellas coughing up $100 million, Amgen $24.75 million, Jazz Pharma $57 million, Lundbeck $52.6 million and Alexion $13 million, among others. Two charities—Good Days and Patient Access Network Foundation—also recently shelled out a combined $6 million to close U.S. Department of Justice claims.

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