Kickbacks to Providers from Pharmaceutical Companies Still Going Strong

Kickbacks from pharmaceutical companies cloud the medical judgment of health care providers and run afoul of federal and state anti-kickback laws. Most prominently, the federal Anti-kickback Act (AKS) was specifically designed to ensure that physicians prescribe drugs based on patient need, not personal greed.

In recent years, however, pharma companies have become increasingly clever in disguising illegal kickbacks. Most prominent are massive speaker bureaus, speaker programs, and advisory boards, all in an attempt to disguise excessive payments as fees for “speaking engagements,” “consulting services” or “training sessions.” Typically, instead of recruiting speakers and consultants based on their experience or credentials, dishonest companies will target physicians based on their potential prescription-writing volume. Furthermore, once physicians are accepted into their programs, the companies will unofficially require speakers to meet minimum prescription levels.  Payment for “Research” and the collection of data are other techniques still used by wayward pharmaceutical companies.

The AKA is violated when a person or entity makes or accepts payment for referring, recommending or arranging for federally-funded medical items or services, including items or services provided under the Medicare, Medicaid, and TRICARE programs. Violations of the AKA are per se violations of the federal False Claims Act, the government’s primary pharmaceutical fraud-fighting weapon.

Pharmaceutical companies conduct extensive return-on-investment analysis in devising and implementing sophisticated marketing schemes and programs. Dishonest pharmaceutical companies will skirt the AKA, knowing their bribes will influence prescribing habits and, in turn, result in the provision of goods and services that are more expensive and/or medically unnecessary or even harmful to a vulnerable patient population.  Over the last fifteen years, dozens of pharmaceutical companies have shelled out multimillion dollar settlement checks to quiet allegations that they showered doctors with illegal kickbacks. Up to several years ago many kickbacks were blatant bribes, including outright “grants,” tickets to sporting events, and other gifts and benefits.

Most illegal kickbacks to doctors are thinly-veiled incentives for off-label prescriptions, for uses that do not work. These business practices cause federal and state government health care programs to pay millions of dollars for prescriptions which are ineligible for payment. Notably, while a physician may prescribe a drug off-label, the law prohibits the provider from inking a kickback-tainted prescription for a Government Health Care Program beneficiary.

The government simply doesn’t have the resources to unravel these schemes, unless pharmaceutical employees and health care providers courageously provide the necessary inside information. For those who do take this stand, the rewards are potentially worth millions.

For more information about qui tam law and pharmaceutical fraud, contact Nolan and Auerbach, P.A.