US Government Warns Drugmakers on Illegal Kickbacks

Wednesday, April 30th 2003

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NEW YORK (Reuters Health) Apr 28 - The Bush administration is warning pharmaceutical manufacturers that they must not offer any financial incentives to doctors, hospitals, insurers or pharmacists that encourage or reward the prescribing of particular drugs, the New York Times reported on Sunday.

Such payments could violate the federal anti-kickback statute, according to a compliance guidance developed by the Health and Human Services Office of Inspector General, the Times said.

Federal law prohibits healthcare providers from making payments or providing anything of value to generate business under Medicare and Medicaid.

A spokesman for the Inspector General's Office told Reuters Health the compliance document had not been completed but that it would be released shortly.

A draft version of the document issued last October warned drug companies against offering cash or other financial incentives for getting a patient's prescription switched from one manufacturer's drug to a rival product. It recommended, at a minimum, that drugmakers comply with the voluntary code of ethics established by the trade group Pharmaceutical Research and Manufacturers of America, which bans drug reps from lavishing doctors with free trips, pricey dinners, tickets to theater events and the like. (See Reuters Health report, Oct. 1, 2002.)

The final version clarifies the government's interpretation of the law and explains why federal officials oppose some drug company practices, such as offering doctors gifts, payments and entertainment, the Times said.

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