What is permitted remuneration for purposes of the “refill reminder” exception to marketing?

Answer:

The Privacy Rule excepts from the definition of “marketing” refill reminders and other communications about a drug or biologic that is currently being prescribed for the individual, provided that financial remuneration received by the covered entity in exchange for making the communication, if any, is reasonably related to the covered entity’s cost of making the communication.  See paragraph (2)(i) of the definition of “marketing” at 45 CFR 164.501.  Financial remuneration means payment to a covered entity (or business associate, if applicable) from or on behalf of a third party whose product or service is being described.  Thus, for these purposes, permitted remuneration in exchange for making a “refill reminder” communication is:

• Non-financial or in-kind remuneration, such as supplies, computers, or other materials.
• Payment from a party other than the third party (or other than on behalf of the third party) whose product or service is being described in the communication, such as payment from a health plan.
• Payments to a covered entity by a pharmaceutical manufacturer or other third party whose product is being described in the communication that cover only the reasonable direct and indirect costs related to the refill reminder or medication adherence program, or other excepted communications, including labor, materials, and supplies, as well as capital and overhead costs.

Where a covered entity enlists the services of a business associate to assist in carrying out a refill reminder or medication adherence program, or to make other excepted communications, the business associate may be paid by the third party (either directly or through the covered entity) only up to the fair market value of its services.

Created 9/19/13