Investigation highlights risks of collaboration between pharmaceutical manufacturers and telehealth providers

The investigation by Senators Dick Durbin, Bernie Sanders, Elizabeth Warren, and Peter Welch focused on two major pharmaceutical manufacturers, their telehealth platforms, and the telehealth providers to which those platforms linked. It comes in the wake of the U.S. Department of Health and Human Services Office of Inspector General’s (OIG’s) 2022 special fraud alert on telehealth arrangements, which highlighted similar risks even though not directed toward manufacturers.

While acknowledging the benefits of telehealth—including helping “to address barriers to care . . . and identifying providers when there may be workforce shortages,” especially for “under-treated conditions and diseases”—the report identified characteristics of the telehealth programs that, in the senators’ view, could be problematic:

• Some telehealth clinician appointments were brief, did not involve a “real-time video consultation,” or did not require clinicians to review a patient’s underlying medical records.
• Although the manufacturers did “not receive specific data from the telehealth platforms on how many or which specific patients” were prescribed their products, they nonetheless received, according to the report, “significant data about the characteristics of patients who ultimately did receive a prescription.”
• Prescription rates among users of the telehealth platforms were high. In the case of one manufacturer and time period, 74% of patients who received a virtual consultation through the manufacturer’s telehealth platform obtained a prescription, though not necessarily for the manufacturer’s products.
• Some telehealth providers allowed “patients to pre-select which medication” they sought to obtain before seeing a clinician, allegedly “undercut[ting] the notion that a health care provider is independently determining the patient’s appropriate treatment.”
• Although the manufacturers paid “no overt incentives or bonus payments . . . to induce prescribing,” at least one telehealth provider named prescribing clinicians in data provided to the manufacturer and, in general, Open Payments records showed certain telehealth clinicians received payments from manufacturers.
• Certain telehealth providers collaborated exclusively with one manufacturer, which the report said “created a preferential dynamic that may contribute to inappropriate prescribing.”

As we highlighted and as the report itself concludes, arrangements such as these can pose risks under the AKS when a federal health care program pays for resulting prescriptions. The government may view telehealth providers as referral sources for manufacturers and may consequently view payments from manufacturers to telehealth providers as potential kickbacks. The report suggests that may be true even when manufacturers implement established guardrails to mitigate AKS risks in relationships with potential referral sources, such as receiving only aggregate, de-identified patient data and avoiding incentive or bonus-based payment structures.

Identification of appropriate patients for treatment with medications leads to better health outcomes, reduces misuse of medications, and improves adherence. The report indicates that the government may nonetheless hold telehealth arrangements that advance these legitimate goals to a higher standard and that enhanced guardrails may be appropriate.

Authored by Ron Wisor, Eliza Andonova, Laura Hunter, and Mike Dohmann.