Is the Discount Safe Harbor No Longer “Safe?”

In a ruling that could, if adopted by other courts, expose all pharmaceutical discount and rebate arrangements to anti-kickback liability, on August 23, 2016, Judge Rya Zobel in the United States District Court for the District of Massachusetts denied Omnicare, Inc.’s motion for summary judgment in United States ex rel. Banigan v. Organon USA, Inc., et al. (Case 1:07-cv-12153-RWZ). The ruling in this qui tam action is at odds with long-standing Department of Health and Human Services Office of Inspector General (OIG) interpretation of the Discount Safe Harbor requirements and seemingly would make virtually all discount or rebate arrangements a per se violation of the Anti-Kickback Statute (AKS). Of note, while the case was brought on behalf of the United States and 28 states, all have declined to intervene in the case. 

*This alert was originally posted on Arent Fox's Health Care Counsel blog. To read this alert in its entirety, please click here.