Articles
Application of the Anti-Kickback Statute to Direct-to-Consumer Prescription Drug Sales
Purpose and Scope of the Bulletin
Pharmaceutical manufacturers have new guidance for selling prescription drugs directly to consumers. On January 27, 2026, Health and Human Services, Office of Inspector General (HHS-OIG) issued a Special Advisory Bulletin addressing how the federal Anti-Kickback Statute applies when pharmaceutical manufacturers sell prescription drugs directly to consumers -- including cash-paying patients who are enrolled in federal health care programs such as Medicare or Medicaid. The Bulletin was issued in response to the Trump Administration’s “TrumpRx” platform which connects patients seeking lower cost prescription drugs with direct-to-consumer (DTC) programs offered by manufacturers and other private companies to cash-paying patients.
Clarity regarding when a pharmaceutical manufacturer’s offer and sale of lower cost prescription drugs to federal health care program enrollees through a DTC program present a low risk of fraud and abuse under the Anti-Kickback Statute is the purpose of this Bulletin. While the Anti-Kickback Statute remains a criminal statute enforced on a case-by-case basis, the Bulletin provides meaningful enforcement guidance for manufacturers designing DTC programs. Importantly, the Bulletin does not change the Anti-Kickback Statute itself (, nor does it address other financial relationships (e.g., with pharmacies, telemedicine vendors, physicians or pharmacy benefit managers). Rather, it focuses on the manufacturer-to-patient commercial relationship in a DTC context.
Anti-Kickback Statute Framework and DTC Sales
The Anti-Kickback Statute prohibits knowingly and willfully offering or paying “remuneration” to induce or reward referrals or generate business reimbursable by a federal health care program. In the DTC context, HHS-OIG recognizes that a manufacturer’s sale of its own drug at a discounted cash price to a federal health care program beneficiary could implicate the Anti-Kickback Statute if structured in a way that:
- induces the purchase of other federally reimbursable products or services;
- functions as a disguised subsidy tied to future federal program business; or
- otherwise influences utilization of items reimbursable by federal programs.
The Bulletin clarifies that direct sales to patients for cash, including those who are Medicare or Medicaid enrollees, can be structured in a low-risk manner — meaning that HHS-OIG does not expect to pursue enforcement – so long as specific conditions and characteristics are present.
Roadmap for Structuring Low-Risk DTC Programs
The Bulletin provides the following key conditions and safeguards that, taken together, create a low-risk environment under the Anti-Kickback Statute:
1. No Billing to Federal Programs
- The prescription drugs, for which the patient has a valid prescription, sold through the DTC program must not be billed to Medicare, Medicaid or any other federal health care program.
- This means the cash purchase must be purely commercial and not seek reimbursement from government payors.
2. No Tying to Other Federally Reimbursable Goods or Services
- The drug sale must not be conditioned on the patient’s current or future order, purchase or use of any other item, service or program benefit that could be reimbursable under a federal health care program.
- In other words, there must be no explicit or implicit bundle that could be interpreted as inducing use of reimbursable products.
3. Cash-Pay Focus
- The arrangement should center on cash-paying patients choosing to purchase at a lower price in the open market.
- It should not create incentives that “steer” patients toward other services that trigger federal payment.
4. Alignment With Other Program Characteristics
Although the Bulletin does not list an exhaustive set of requirements, it notes that programs exhibiting the following traits are more likely to be viewed as low risk:
- Transparent pricing and terms.
- No inducements (financial or otherwise) tied to future business or referrals.
- Independent patient choice — the patient elects to buy on a cash basis.
- Safeguards against misuse, inappropriate steering or marketing of other federally reimbursable products.
Key Policy Signals
The Bulletin reflects HHS-OIG’s recognition that DTC models may reduce patient out-of-pocket costs and improve access. At the same time, HHS-OIG emphasizes the Anti-Kickback Statute remains highly fact-specific and enforcement discretion will depend on the totality of the arrangement. HHS-OIG also indicates interest in potential future regulatory action (including possible safe harbor development), signaling this area remains under active policy consideration.
Practical Takeaways
The January 27, 2026, Special Advisory Bulletin provides a practical roadmap for structuring direct-to-consumer prescription drug programs in a way that minimizes Anti-Kickback Statute enforcement risk, particularly when:
- The transaction is cash-based and not billed to federal programs.
- There is no conditioning on other federally reimbursable products or services.
- The program includes appropriate transparency and safeguards
While not a formal safe harbor, the Bulletin offers a clear roadmap for manufacturers seeking to structure DTC prescription drug programs in a manner consistent with federal fraud-and-abuse laws.
Should you have any questions on Anti-Kickback Statute, please contact Ms. Rubin.
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Disclaimer: This alert has been prepared by Eastman & Smith Ltd. for informational purposes only and should not be considered legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney/client relationship.