South Florida Hospital News
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December 2004 - Volume 1 - Issue 5
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Beware of Pharmaceutical Reps Bearing Gifts

Are you a physician who has enjoyed the generosity of a pharmaceutical manufacturer? Maybe you received a drug sample, CME subsidy, consulting payment, stipend, research funding, lavish dinner, Caribbean golf vacation or other courtesy or item of value. If so, be forewarned that some of the foregoing may violate the federal "anti-kickback law" which prohibits anyone from knowingly and willfully offering, paying, soliciting or receiving remuneration to induce referrals or to arrange for or recommend the purchase of items or services that are reimbursable under a federal health care program. Each time you write a prescription for medication marketed by a manufacturer that has provided you with such generosity you might want to examine this issue.

The range for "acceptable" relationships between physicians and pharmaceutical manufacturers has been evolving steadily in recent years with input (including prosecutions) by the government and by industry organizations such as the American Medical Association (AMA) and Pharmaceutical Research Manufacturers of America (PhRMA). On the government side, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) has issued numerous advisory opinions and public communications expressing concern and providing guidance on improper drug marketing practices and manufacturer relationships with physicians. One such publication is the OIG’s Compliance Program Guidance for Pharmaceutical Manufacturers. In particular, the OIG has indicated that product conversion arrangements, frequent flyer reward programs, research grants with minimal record-keeping tasks, payments for "detailing" and certain types of consulting payments are problematic, if not subject to sanction or prosecution. Penalties can include fines, criminal prosecution and exclusion from participation in Medicare and Medicaid. The OIG Guidance stresses that the nature of the relationship between the manufacturer and the physician should be such that the manufacturer does not exert influence on the physician’s choice of product or treatment or impair the practitioner’s judgment. As you would expect, the Guidance states that any remuneration provided should be appropriate and consistent with the law.

The same themes are reflected to one degree or another in the AMA’s ethical guidelines and in the PhRMA’s "Code on Interactions with Healthcare Professionals" published in 2002. The AMA’s guidelines state that gifts should primarily entail a benefit to patients and not be of substantial value. Personal gifts that have minimal value are permitted if they relate to the physician’s work. Legitimate conferences are acceptable if they promote scientific and educational objectives and advance knowledge on the subject. The AMA’s ethical guidance also stresses that CME subsidies should not be paid for travel, lodging or personal expenses, and that no gifts should have strings attached. The PhRMA Code, which was adopted by an executive committee comprised of 14 of the major pharmaceutical companies, has many similarities, but, because it applies to pharmaceutical manufacturers, addresses certain issues which the AMA does not. In either case, PhRMA Code and the AMA guidelines are useful, but voluntary compliance with them will not automatically provide protection from anti-kickback prosecution as a matter of law.

Notwithstanding the problematic or unpermitted arrangements that may exist, it is acceptable for providers to receive fair market value for legitimate services they provide. However, if an arrangement can be viewed as providing payment in return for or as an inducement or incentive for the provider to prescribe, order or recommend the use of the manufacturer’s product, it poses a risk to both the provider and the pharmaceutical company. In short, if a physician receives something of value, directly or indirectly, from a pharmaceutical company that is intended to induce the physician to recommend or order a particular medication, then that arrangement could be subject to prosecution. As such, it is extremely important for providers to scrutinize and re-evaluate their relationships with pharmaceutical manufacturer’s representatives and make sure they remain within the acceptable range.

Rodger L. Hochman is a Florida Bar board certified health law attorney. He practices at Sachs Sax Klein, P.A. in Boca Raton, Florida and can be reached at (561) 237-6817 or at rhochman@ssklawfirm.com.
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