Regulatory Considerations When Seeking Medical Device Study Recruitment Improvements

Experts detail the hurdles study sponsors encounter when discussing the use of financial incentives to overcome recruitment issues.

Clinical Trial
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Recruiting and retaining study subjects remains a significant challenge for medical device companies that are innovating and sponsoring clinical trials, particularly when designing studies that reflect the diversity of the national population. Difficulties enrolling eligible study subjects can lead to significant study delays and can be costly for trial sponsors, extending the timeline that patients need to wait to obtain access to safe, effective, and important medical technologies.

Below we discuss current recruitment challenges faced by study sponsors, the legal hurdles that need to be navigated to provide financial incentives to overcome those hurdles, and practical strategies to consider when evaluating whether to address recruitment challenges with financial incentives.

Study burden and diversity obligations challenge recruitment efforts

Research has shown that more than 80% of clinical trials face delays related to the recruitment of study subjects, and a 2023 report from the American Center for Cancer Research found that as many as 20% of clinical trials fail due to insufficient patient enrollment. While many factors can adversely impact recruitment efforts, including complex trial designs and narrow eligibility criteria, a recent literature review conducted by the National Institutes of Health found that study burden — cost associated with participating in a clinical trial, such as transportation, childcare, and time away from work — is the most commonly cited barrier to participation.

At the same time, federal regulatory agencies and industry participants have called for increased diversity in clinical trial enrollment, including by implementing new regulatory requirements aimed at ensuring that sponsors take appropriate steps to enroll patients from diverse backgrounds in their trials. For example, in April 2022, the Centers for Medicare and Medicaid Services (CMS) limited coverage for a class of drugs indicated to treat Alzheimer’s disease to clinical trials in which the diversity of the study population represented the national population with similar clinical diagnoses. During that same month, the Food and Drug Administration (FDA) issued draft guidance to industry for developing plans to enroll more trial participants from underrepresented racial and ethnic groups. Most recently, in December 2022, Congress enacted the Food and Drug Omnibus Reform Act of 2022 (known as FDORA), which requires most clinical trial sponsors to submit diversity action plans to FDA.

In addition, the Advanced Medical Technology Association (AdvaMed), a trade association for medical device manufacturers, has also highlighted the need for increased diversity in clinical research within the medtech industry to address health inequities, and launched the Responding To Racial Disparities In Health initiative in 2020, which sets out four principles on health equity, including one specifically focused on promoting research equity.

Despite the growing awareness of the importance of diversity in clinical research and how achieving diversity can reduce health disparities and improve health equity, sponsors continue to encounter significant barriers to recruiting diverse study subjects, due in meaningful part to financial barriers.

To address these financial barriers, many device trial sponsors are, or are considering, providing various types of financial support to potential study subjects to encourage them to enroll, and remain enrolled, in their clinical trials. While providing financial support to potential study subjects can be a valuable tool for recruitment, it can also pose heightened risks under the US healthcare fraud and abuse laws, as discussed further below.

US healthcare fraud and abuse law implications

It is well recognized that providing financial support can be an effective tool to improve recruitment and retention of study subjects, including study subjects from diverse backgrounds. However, clinical trial sponsors must be mindful of a myriad of US healthcare fraud and abuse laws when offering such support. These laws principally include the federal Anti-Kickback Statute (AKS), the federal Beneficiary Inducement Statute (BIS), and the federal False Claims Act (FCA).

The AKS is a criminal law that prohibits the offer or receipt of remuneration to induce referrals for any items or services for which payment may be made, in whole or in part, by a federal healthcare program — such as Medicare or Medicaid — unless the arrangement is designed to fit within a statutory exception or regulatory safe harbor. In the clinical trial recruitment context, the AKS could be implicated if the medical device company’s sponsored clinical trial is a Category B (nonexperimental/investigation) investigational device exemption (IDE) study, where the study device is covered and reimbursed by Medicare, as well as in a scenario where the study device is not covered and reimbursed, but the medical device manufacturer markets and sells other devices that are covered and reimbursed by federal healthcare programs, as it could be alleged that the offer of financial support to the study subject is an inducement to the study subject, site, or investigator to induce such individuals or entities to use, recommend, or order the device manufacturer’s other commercially available devices.

Similarly, the BIS prohibits the provision of free or discounted items or services to Medicare or Medicaid beneficiaries to induce the beneficiary to select “a particular provider, practitioner, or supplier” over another for any item or service for which payment may be made under the programs. Therefore, the BIS can apply in similar scenarios as the AKS. Generally speaking, however, a medical device manufacturer would only be indirectly liable under the BIS, as it is not a “particular provider, practitioner, or supplier” within the meaning of the statute. Even so, a medical device manufacturer would not want to aid or abet a study investigator or study site in potentially violating this law.

Finally, the FCA imposes liability on any person or entity who, among other things, knowingly presents or causes to be presented a false or fraudulent claim for payment to the federal government. Importantly, the government or a whistleblower could pursue a FCA case premised on alleged violations of the AKS and BIS.

Violation of any of the above laws, particularly when brought under the FCA, can result in significant monetary penalties, potential criminal penalties, and potential exclusion from participation in federal healthcare programs.

Government guidance addressing financial support to study subjects

Although the US Department of Health and Human Services, Office of Inspector General (OIG), the agency tasked with enforcing the AKS and the BIS, has so far declined to adopt new regulatory safe harbors to protect arrangements under which clinical trial sponsors may provide compensation to study subjects, it has issued a series of four favorable advisory opinions approving such arrangements under specific circumstances. All four advisory opinions involve financial support in the form of cost-sharing assistance, and three of the four opinions were requested by medical device manufacturers. 

The first opinion, issued in October 2021, involved a proposed arrangement under which the Requestors, a professional medical society and a non-profit organization, proposed to pay the co-insurance amounts that Medicare beneficiaries participating in a study sponsored by the medical society would otherwise owe for Medicare-reimbursable PET Aβ scans provided during the study. Requestors would use funds donated to the non-profit organization by individuals and foundations with the express purpose of supporting the organization’s research programs, including the study.

In the second opinion, issued in November 2021, the Requestor, a medical device manufacturer sponsoring a clinical trial involving its implantable medical device, proposed to pay the cost-sharing obligations that Medicare beneficiaries participating in the study otherwise would owe for Medicare-reimbursable items and services provided during the randomized, controlled portion of the study. As a result of these subsidies, Medicare beneficiaries would incur no out-of-pocket expenses relating to their participation in that phase of the study.

The third opinion, issued in March 2022, involved a proposed arrangement also requested by a medical device manufacturer, who proposed to pay the cost-sharing obligations of Medicare beneficiaries participating in its clinical trial by making payments directly to the institutions to which the subjects would otherwise owe payment. In the absence of the assistance provided by the Requestor, each Medicare beneficiary enrolled in the study would incur more than $1,300 in cost-sharing obligations for the treatment and several follow-up appointments.

In the most recent opinion on this topic, issued in December 2023, the Requestor, another medical device manufacturer, proposed to pay the cost-sharing obligations that Medicare beneficiaries participating in the study otherwise would owe for study-related Medicare reimbursable items and services provided during the study, up to a maximum of $2,000 per study participant. The Requestor proposed to pay the cost-sharing amounts directly to the site and investigator to which the participant otherwise would owe the amount.

In all four advisory opinions, OIG focused its analysis primarily on the following three principles:

  1. Financial support should be a reasonable means of promoting enrollment. OIG has expressed that financial support offered to study subjects, including cost-sharing subsidies, should be a reasonable means of facilitating clinical trial enrollment, including the enrollment of study subjects from diverse backgrounds, by removing a potential financial barrier to participation in the study. For example, according to OIG, the provision of such subsidies may be more reasonable where the out-of-pocket cost to participate in the study would be cost-prohibitive for many patients who would otherwise participate in the study, and the sponsor has data to support that it would be unable to enroll a sufficient number of participants to complete the study without subsidizing patient cost-sharing obligations.

  2. Financial support should pose a low risk of overutilization or inappropriate utilization of federal healthcare program items and services. OIG emphasized that the financial support offered should not be so great that it incentivizes study subjects to seek out study sites or study investigators to order items and services that are not appropriate for the patient or medically unnecessary, thereby increasing federal healthcare program costs.  

  3. The support should be distinguishable from problematic seeding arrangements. OIG noted that such seeding arrangements include those in which manufacturers offer subsidies initially to lock in future utilization of an item or service that is reimbursable by federal healthcare programs. According to OIG, the study sponsor should not be in a position to benefit financially from the longer-term use of items or services provided during the course of the clinical trial.

Practical strategies to consider

In light of the foregoing, medical device companies sponsoring clinical trials should consider the following when evaluating whether to offer financial incentives to potential study subjects in their sponsored clinical trials:

  1. Ensure any financial support provided to study subjects is reasonably tied to facilitating enrollment and retention. If financial support is provided to study subjects, including subsidies for patient cost-sharing amounts, the manufacturer should ensure the type and amount of support provided is tailored to a legitimate and identified need to increase recruitment and retention in the sponsor’s trial. Providing financial support for other purposes could raise heightened healthcare fraud and abuse risk.

  2. Internally document the rationale for providing financial support to study subjects. Sponsors should maintain internal policies or reasonable assumptions documenting the rationale for providing any type of financial support to study subjects. Such documentation should undergo review by the sponsor’s legal or compliance department to ensure that the rationale is reasonable based on applicable law and company policies and procedures. Additionally, any financial support provided to study subjects should be based on consistent criteria, disclosed in the informed consent forms, and reviewed and approved by an Institutional Review Board (IRB).

  3. Avoid advertising the availability of cost-sharing subsidies to study subjects. To mitigate the risk that the financial support incentivizes overutilization or inappropriate utilization of federal healthcare program items and services, the availability of cost-sharing subsidies should not be advertised to study subjects, sites, or investigators. Further, all study subjects enrolled in the clinical trial should continue to satisfy the enrollment criteria set forth in the study protocol and execute an informed consent document in order to participate in the study. Helpfully, OIG has stated that studies approved by CMS as Category B IDE studies likely have the appropriate patient protections in place and are less likely to result in overutilization or inappropriate utilization of items or services reimbursable by federal healthcare programs.

  4. Ensure legal review of all materials used to encourage patients to enroll in clinical trials. All materials used to recruit patients to enroll or remain enrolled in a sponsor’s trial, including content on websites marketing clinical trials, brochures, and other materials should be reviewed by the sponsor’s legal department to ensure that the content is consistent with the stated rationale for such support and does not raise significant fraud and abuse risk.

  5. Educate clinical trial personnel on healthcare fraud and abuse risks. Sponsors should ensure that all employees involved in clinical trials have a baseline understanding of key healthcare fraud and abuse laws, which will enable them to more readily identify and respond to potential risks as they arise.

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