Healthy Skepticism Library item: 1082

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Richwine L.
US warns drug makers about doctor payments, gifts
Reuters 2003 Apr 28

Full text:

WASHINGTON (Reuters) – U.S. officials Monday issued final guidelines warning drug makers that some sales and marketing practices, including gifts or payments to doctors, may run afoul of anti-kickback laws.

Federal law prohibits payments to generate business under government health care programs such as Medicare and Medicaid. The guidelines point to various practices that risk violating the law.

The voluntary guidance was “designed to help companies prevent health care fraud and abuse by promoting a high level of ethical and lawful corporate conduct,” Janet Rehnquist, inspector general for the Department of Health and Human Services, said in a statement.

Two “suspect” practices identified were payments from a company to physicians or pharmacists to switch patients to the manufacturer’s drug, and payments to doctors to listen to a pitch from a drug company sales representative.

The guidance also warns against excessive payments for physician consulting and research services, and offering inappropriate entertainment, recreation, travel, meals or gifts to prescribers.

“Any time a pharmaceutical manufacturer provides anything of value to a physician who might prescribe the manufacturer’s product, the manufacturer should examine whether it is providing a valuable tangible benefit to the physician with the intent to induce or reward referrals,” the guidelines said.

Wining and dining doctors and offering other perks has been commonplace in the competitive drug industry, prompting criticism that doctors were prescribing medicines based on rewards rather than scientific merit.

The Pharmaceutical Research and Manufacturers of America, or PhRMA, set voluntary ethical guidelines, which took effect last July, prohibiting drug company sales representatives from lavishing doctors with entertainment and recreational gifts.

While following the PhRMA code “will not protect a manufacturer as a matter of law … it will substantially reduce the risk of fraud and abuse and help demonstrate a good faith effort to comply with the applicable federal health-care program requirements,” the HHS guidelines said.

The guidelines, which finalize a proposal made in October, also stress that sales and price data provided to the government must be complete and accurate, and, when appropriate, take into account discounts, rebates or similar benefits offered to other purchasers. The government uses the data to set reimbursement rates.

Jeff Trewhitt, a spokesman for PhRMA, said the industry group had no immediate comment.