HHS-OIG Issues Special Advisory Bulletin on Manufacturer Direct-to-Consumer Programs for Prescription Drugs

For decades, the federal government has taken a cynical view of the various offers of monetary and other forms of assistance made by drug manufacturers to patients. The government’s principal concern has remained unchanged: if (i) a manufacturer offers a federal health care program (FHCP) beneficiary something of value—a gift card, a rebate, copay assistance—to induce the beneficiary to use the manufacturer’s drug and (ii) an FHCP pays for that drug, then all the usual AKS risks come into play, including, among others, the potential for product overutilization, increased program costs, improper patient steering, and unfair competition.

Indeed, even where the manufacturer and beneficiary have agreed that no reimbursement will be sought from an FHCP with respect to the drug at issue, HHS-OIG has remained skeptical, often referring to these as potential “seeding” arrangements—i.e., arrangements “in which a manufacturer might offer a drug for free or at a greatly reduced cost to induce a patient onto that drug and for the patient to obtain subsequent supplies that would be billed to [FHCPs].”¹

Although AKS (and associated FCA) scrutiny from DOJ and HHS-OIG has become commonplace within the industry, pharmaceutical manufacturers have recently experienced a different kind of pressure from the federal government in the form of the Trump Administration’s push to reduce prescription drug costs. Over the last few months, the Trump Administration has announced several agreements with major pharmaceutical companies to make prescription drugs more affordable in the United States. Among other things, these agreements require manufactures to sell prescription drugs directly to consumers at deeply discounted prices through the TrumpRx platform.

As a result of these competing government priorities, manufacturers have found themselves in an uneasy position between the Scylla of the Trump Administration’s policy objectives and the Charybdis of longstanding AKS and FCA enforcement. Simply put, if a manufacturer offers an FHCP beneficiary a steep discount on its drugs (as would be the case under TrumpRx), it might potentially run the risk of violating the AKS, which in turn could serve as a predicate for an alleged violation of the FCA.

In an effort to help manufacturers (and beneficiaries) navigate this straight, and consistent with an executive order calling on HHS to “facilitate” pharmaceutical manufacturer DTC programs “to the extent consistent with law,” HHS-OIG issued a Special Advisory Bulletin on January 27, 2026 concerning the “Application of the Federal Anti-Kickback Statute to Direct-to-Consumer Prescription Drug Sales by Manufacturers to Patients With Federal Health Care Program Coverage” (DTC Bulletin).

DTC Bulletin

After acknowledging, at least indirectly, the above history and tension, the DTC Bulletin states that if the offer and sale of a prescription drug by a manufacturer to an FHCP beneficiary “aligns” with certain “characteristics”—i.e., if the arrangement includes certain safeguards—there “is a low risk that a manufacturer would violate” the AKS. These characteristics are as follows:

1. “The individual has a valid prescription from an independent, third-party prescriber.”
2. “When an individual purchases prescription drugs through a pharmaceutical manufacturer’s DTC program, no claims for these drugs are submitted to any insurer, including any [FHCP]. This means that individuals obtain the drugs without using their Medicare outpatient prescription drug benefit or any other [FHCP] benefit. As such, the DTC program price that a Medicare Part D enrollee pays does not count toward their Medicare Part D true-out-of-pocket or total Medicare Part D spending for any purpose.”
3. “The pharmaceutical manufacturer does not use the DTC program for one product as a vehicle to market other federally reimbursable products it manufactures or services it provides.”
4. “The pharmaceutical manufacturer does not condition the DTC program price for any drugs offered through its DTC program on any future purchases (of that drug or any other items or services).”
5. “The pharmaceutical manufacturer makes the prescription drug available to the [FHCP] enrollee through its DTC program for at least one full plan year.”
6. “The prescription drugs offered by the pharmaceutical manufacturer through the DTC program do not include controlled substances.”

The DTC Bulletin also states that, “[t]o protect patient safety and reduce the risk of contraindicated or duplicative prescriptions,” it would be “prudent” for manufacturers “to establish mechanisms to communicate” with any Medicare Part D, Medicare Advantage, or Medicaid plan in which the beneficiary is enrolled “to facilitate appropriate drug utilization review and medication therapy management by insurers.”

Take-Aways

In many respects, the DTC Bulletin reiterates (albeit in the context of a single Special Advisory Bulletin) safeguards it previously has identified in other sub-regulatory guidance (e.g., in numerous HHS-OIG advisory opinions).² That said, from an AKS defense perspective, adopting the full suite of safeguards set forth in the DTC Bulletin—which is specifically directed to the industry at large—should provide somewhat greater protection than relying on the adoption of safeguards set forth in multiple advisory opinions in which the relevant manufacturer was not a requesting party.

It would be even better, of course, if Congress or HHS-OIG would memorialize the safeguards set forth in the DTC Bulletin in a new statutory exception or regulatory safe harbor. This is particularly so given the position taken by the Attorney General in her February 5, 2025 memorandum “Restating the Prohibition on Improper Guidance Documents,” which states that “Guidance documents violate the law when they are issued without undergoing the rulemaking process established by law yet purport to have a direct effect on the rights and obligations of private parties governed by the agency or otherwise act as a substitute for rulemaking.”

Separate and apart from the uncertainty created by the Attorney General’s memo, the DTC Bulletin itself contains myriad caveats and disclaimers that may limit its usefulness. For example, while the agency states that the adoption of its safeguards will “minimize” the risk of violating the AKS, the DTC Bulletin does not guarantee protection from AKS enforcement. Further, the agency states that “this Bulletin cannot, and is not intended to, be an exhaustive or definitive discussion of relevant risks of DTC programs” and because the AKS “is a criminal statute, any determination as to whether a particular arrangement violates the statute can be made only through a case-by-case assessment of all relevant facts and circumstances, including the intent of the parties.”

On a more positive note for the industry, a notable exclusion from the list of safeguards in the DTC Bulletin is any requirement of “financial need” on the part of participating FHCP beneficiaries. This is a departure from the many HHS-OIG advisory opinions over the years that have been favorable, at least in part, because the discount program at issue was available only to patients who demonstrated financial need.³

One condition that may require clarification is the requirement that the drug at issue be made “available to the [FHCP] enrollee through [the manufacturer’s] DTC program for at least one full plan year.” Assume that a manufacturer, through its DTC program, offers Drug A to Patient Smith, a Medicare Part D enrollee, for $20 at the beginning of the plan year. Does this “availability” requirement mean that the manufacturer must then offer a discount on every unit of Drug A that Patient Smith wishes to purchase through the DTC program for the remainder of the plan year? And must that discount be identical to the $20 pricing that the manufacturer offered to Patient Smith at the beginning of the plan year? And does the manufacturer need to offer that same $20 discount to other Medicare Part D enrollees during the same plan year? The answers may be “yes,” “yes,” and “yes,” but that is not clear from the text of the DTC Bulletin. And what if the manufacturer needs to end its DTC program mid-year for financial reasons. Is that permissible? 

On the same day the DTC Bulletin was published, HHS-OIG published a companion “Request for Information: Application of the Anti-Kickback Statute and Beneficiary Inducements CMP to Direct-to-Consumer Prescription Drug Sales” (DTC RFI). Among other things, the DTC RFI asks commenters to explain whether the DTC Bulletin “adequately addresses the concerns of industry stakeholders in connection with DTC sales to people covered by [FHCPs] or if additional guidance, safe harbors, exceptions, or some combination of the three are necessary to promote beneficial DTC arrangements.” For the reasons set forth above, affected industry stakeholders would be strongly advised to discuss these issues with their counsel and consider responding to the DTC RFI with, at a minimum, (i) a request for a regulatory safe harbor for the arrangements contemplated in the DTC Bulletin and (ii) answers to the open questions highlighted above. Responses to the DTC RFI are due by March 30, 2026.

1. HHS-OIG Advisory Opinion No. 15-11 (Aug. 5, 2015) (emphasis added). See also HHS-OIG Advisory Opinion No. 18-02 (Apr. 30, 2018) (noting that an example of a “problematic ‘seeding’ program” would be one in which “a manufacturer offers a patient a free drug—which might be more expensive than competing drugs or which might be dangerous for the patient to cease using—with the goal of having the patient obtain subsequent supplies that would be billed to [FHCPs]”).
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2. See, e.g., HHS-OIG Advisory Opinion No. 14-05, at 3 (Jul. 21, 2014) (approves manufacturer’s arrangement because “[n]either the Pharmacy nor any Participant files any claims for payment for the Product with Medicare or any other [FHCP], and the price Part D Participants pay does not count toward their TrOOP [true out of pocket] or total Part D spending for any purpose.”); HHS-OIG Advisory Opinion No. 17-05, at 7 (Dec. 4, 2017) (approves arrangement that “does not include any features to specifically steer beneficiaries to Requestor’s retail pharmacies or Clinics to purchase federally reimbursable items or services.”); and HHS-OIG Advisory Opinion No. 06-03, at 4 (Apr. 18, 2006) (“Once an enrollee begins receiving a drug for free from PAP A or PAP B, such assistance continues for the remainder of that year and neither Medicare, nor any Part D plan or enrollee, is charged for provision of that drug to the enrollee for the remainder of the coverage year.”).
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3. See, e.g., HHS-OIG Advisory Opinion No. 06-03, at 3-4 (Apr.  18, 2006) (describing manufacturer PAPs that “provide free outpatient prescription medications” to Part D enrollees who “demonstrate financial need” based on “income below 325% of the [f]ederal poverty level” and who “must have already spent at least three percent (3%) of their household income on outpatient prescription drugs”); HHS-OIG Advisory Opinion No. 06-14, at 3-4 (Oct. 19, 2006) (manufacturer PAP providing drugs to Part D enrollees with “qualifying financial need” defined as “income less than or equal to 200% of the [f]ederal poverty level”); HHS-OIG Advisory Opinion No. 06-19, at 3-4 (Oct. 26, 2006) (manufacturer PAPs requiring applicants to demonstrate financial need through “an income below 350% of the [f]ederal poverty level and expenditure of at least $600 on outpatient prescription drugs”); HHS-OIG Advisory Opinion No. 06-21, at 3-4 (Nov. 2, 2006) (manufacturer PAP requiring “household income below a set multiple of the [f]ederal poverty level” and “the patient already having spent a substantial portion of that income on outpatient prescription drugs”); HHS-OIG Advisory Opinion No. 07-04, at 3-4 (Mar. 30, 2007) (manufacturer PAPs requiring “household income levels below set multiples of the [f]ederal poverty level” plus a spending test requiring enrollees to have “incurred outpatient prescription drug costs equal to 4% of household income during the coverage year”); HHS-OIG Advisory Opinion No. 20-05, at 5 (Sept. 28, 2020) (manufacturer subsidy program for Medicare beneficiaries with “household income between 500 percent and 800 percent of the [f]ederal Poverty Level”). ↩︎