Physicians and Pharmaceutical Companies: Under Scrutiny?
September 20th, 2006
By Heather Skelton, Healthcare Attorney, www.doctorslawyer.com
The Office of Inspector General (OIG) of the Department of Health and Human Services issued Final Compliance Program Guidance for Pharmaceutical Manufacturers in April of this year, yet there continues to be rampant rumors of pharmaceutical companies offering long weekends for physicians and their wives in exotic places and, in one example, a five figure check in return for “attendance at a lecture” on a particular drug. Physicians work very hard, and such offers are obviously appealing for many reasons. The question that needs to be asked before accepting such a gift is whether it is appropriate according to the OIG, the Food and Drug Administration Office of Criminal Investigations, the Federal Bureau of Investigation, and the Department of Justice.
This summer AstraZeneca Pharmaceuticals learned the hard way that its marketing efforts to physicians were not appropriate. The government alleged that AstraZeneca paid illegal remuneration in the form of free samples, unrestricted educational and other grants, travel and entertainment, and honoraria. The company’s punishment was, among other things, $355 million in criminal fines, civil penalties, and False Claim Act liabilities for improper marketing practices of its prostate cancer drug Zoladex. It is not the only company in trouble or currently under investigation.
Fortunately, there is guidance available to help determine where to draw the line. The American Medical Association (AMA) has maintained guidelines on this subject for many years. In general, the AMA Guidelines advise that cash gifts should not be accepted. Compensation by pharmaceutical companies is permissible as long as it is reasonable and for genuine services rendered by the physician. The AMA discourages subsidies for travel, lodging or other personal expenses of physicians attending conferences, unless the meeting serves a bona fide research purpose. This means there should be a valid study protocol, physicians recruited with the proper expertise, and enough physicians recruited to produce a valid statistical sample.
The Pharmaceutical Research and Manufacturers of America (PhRMA) also adopted guidelines in July 2002. The guidelines are called the Code on Interactions with Healthcare Professionals. Compliance is voluntary, and it has a few different requirements than AMA. For example, it does approve of reimbursement for consulting services (which is not directly addressed by AMA), including travel, lodging and meal expenses. It specifically states that spouses and other guests should not receive any benefits, even if it is only a modest meal. Financial support for CME is acceptable because it can contribute to the improvement of patient care.
Lastly, there is the OIG’s Final Compliance Program Guidance for Pharmaceutical Manufacturers. Since it is the government enforcing the rules, it is a good idea to read the government’s guidance on the rules. The document focuses on the potential risks under the Anti-Kickback Statute for pharmaceutical companies and those with whom they have relationships.
The basic principle is that remuneration from a pharmaceutical manufacturer is illegal if that remuneration is intended to generate any federal healthcare business. Several types of arrangements with physicians that the OIG may find problematic are: inappropriate discounts to physicians, offering substantial inducements for a physician to use or prescribe a particular product, educational grants that may be directly or indirectly conditioned upon the purchase of a product or service, personal service contracts that are not structured to fit within an available “safe harbor” (seek legal assistance for proper documentation), or research funding that is not legitimate.
The analysis of gift or compensation appropriateness is mostly common sense with a little knowledge of the law. Some good questions to ask are:
- What is the nature of the relationship with the pharmaceutical company and what is the degree of the physician’s influence on the success of the product?
- Does the remuneration depend on the volume or value of “referrals” for the manufacturer’s product?
- Is the value of the remuneration substantial?
- Does the remuneration have the potential to negatively impact the costs of a federal healthcare program?
- Would the acceptance of the remuneration affect the physician’s professional judgment?
The bottom line is that physicians should not rely on the pharmaceutical companies to know and follow the rules. Before accepting that free trip, consider the risk of substantial fines, unwanted publicity, civil and criminal liability, and being on a first name basis with government investigators. Is that worth a long weekend at Disneyland?
Entry Filed under: Articles