Fw: Drug Industry Is Told to Stop Gifts to Doctors

[Guest guest]

----- Original Message -----

From: " Kathi " <pureheart@...>

Sent: Tuesday, October 01, 2002 4:00 PM

Subject: Drug Industry Is Told to Stop Gifts to Doctors

> October 1, 2002

>

> Drug Industry Is Told to Stop Gifts to Doctors

>

> By ROBERT PEAR

>

> ASHINGTON, Sept. 30 - The government warned pharmaceutical companies

> today that they must not offer any financial incentives to doctors,

> pharmacists or other health care professionals to prescribe or recommend

> particular drugs, or to switch patients from one medicine to another.

>

> The government informed the industry that many practices commonly used

> in the marketing and sale of prescription drugs could run afoul of

> federal fraud and abuse laws.

>

> Specifically, the government said that drug makers could not offer

> incentive payments or other " tangible benefits " to encourage or reward

> the prescribing or purchase of particular drugs by doctors, health plans

> or companies that manage drug benefits for employers and insurers.

>

> The new standards, the first of their kind, were issued by Janet

> Rehnquist, inspector general of the Department of Health and Human

> Services, as guidance to the pharmaceutical industry.

>

> Aggressive marketing is the norm in the industry. For years, drug makers

> have treated doctors to free Broadway plays, weekend trips, expensive

> meals and other lavish perks. Many companies have rewarded middlemen, or

> pharmacy benefit managers, for putting their products on lists of

> recommended drugs, known as formularies. Some companies have also

> rewarded doctors and drugstores for switching patients from one

> medication to another.

>

> Similarly, doctors in a position to influence the prescribing of drugs

> for large numbers of patients have been retained as advisers and

> consultants to drug manufacturers.

>

> While the new standards do not have the force of law, drug makers that

> flout them are more likely to be investigated and prosecuted for

> violations of federal fraud and kickback statutes.

>

> " In today's environment of increased scrutiny of corporate conduct and

> increasingly large expenditures for prescription drugs, " Ms. Rehnquist

> said, " it is imperative for pharmaceutical manufacturers to establish

> and maintain effective compliance programs. "

>

> The public will have 60 days to comment on the standards. The government

> may revise them in the light of those comments.

>

> The government said it was concerned about the industry's marketing

> practices because they could improperly drive up costs for Medicare and

> Medicaid, the federal health programs for 75 million people who are

> elderly, disabled or poor. The federal government spends $400 billion a

> year on the two programs combined, and the cost is expected to double in

> 10 years.

>

> The new standards say " switching arrangements, " under which drug

> companies offer financial incentives to shift patients from one drug to

> another, " are suspect under the anti-kickback statute. "

>

> Similar arrangements, under which companies pay drugstores or pharmacy

> benefit managers to contact patients or doctors to encourage them to

> change from one drug to another, are also suspect, the government said.

> It warned companies that they would run afoul of the law if they

> rewarded pharmacies and pharmacy benefit managers for " moving market

> share " from one product to another.

>

> The inspector general said that payments to consultants, advisers and

> researchers " pose a substantial risk of fraud and abuse " if the payments

> exceed " fair market value for the services rendered. "

>

> The new guidelines say that drug makers can violate the kickback statute

> when they offer entertainment, recreation, travel, meals or similar

> benefits; when they sponsor " educational conferences " ; and when they

> offer research grants, gifts, gratuities and " other business courtesies "

> to doctors, hospitals and other health care providers who influence the

> prescribing of drugs.

>

> The standards also apply to financial incentives given to purchasing

> coalitions that buy drugs and medical devices for hospitals. The buying

> groups are sometimes paid by manufacturers whose products they are

> supposed to evaluate objectively.

>

> Ms. Rehnquist said that every drug company should appoint a compliance

> officer, establish a hotline to receive complaints of fraud and abuse

> and consider paying rewards to employees who report misconduct.

>

> Under the new standards, companies are responsible not only for their

> own employees, but also for sales agents and contractors who " engage in

> improper marketing and promotional activities " on their behalf.

>

> In April, the Pharmaceutical Research and Manufacturers of America, a

> trade group for brand-name drug companies, adopted a voluntary marketing

> code setting out what sales representatives may do in dealings with

> doctors and other health care professionals.

>

> The code says, for example, that a drug maker cannot give golf balls

> emblazoned with the company's name to doctors, because the products do

> not provide a benefit to patients.

>

> The inspector general said that compliance with the industry code was

> desirable, but " will not necessarily protect a manufacturer from

> prosecution or liability for illegal conduct. "

>

> Employers and health plans hire pharmacy benefit managers to review and

> pay claims for prescription drugs, to help control costs and to

> coordinate care for patients.

>

> Barrett Toan, chairman of Express Scripts, a pharmacy benefit manager in

> St. Louis, said drug makers paid rebates to pharmacy benefit managers

> " to make their products more attractive - to improve their position on

> the formulary, " increasing the likelihood that their drugs will be

> prescribed, in preference to products made by other companies.

>

> M. Rector, senior vice president of the National Community

> Pharmacists Association, said, " Pharmacy benefit managers increasingly

> take payments from drug makers, with the result that patients are

> switched from a product that might be the best prescription drug for

> them to a more expensive brand-name product. "

>

> The new standards say that drug companies may be subject to civil and

> criminal penalties if they report inaccurate or incomplete data on the

> prices or sales of their products. The government uses such information

> to compute reimbursement u

>

> nder Medicare and Medicaid, and the inspector general said the reported

> prices should reflect any discounts or rebates offered to buyers.

>

> Ms. Rehnquist said that if drug makers found " credible evidence " of

> violations of federal law or regulations, they should notify the

> government within 60 days, or sooner if beneficiaries could be harmed.

>

> In recent years, the government has issued guidance to other segments of

> the health care industry on how to prevent fraud and abuse. Those

> guidelines were addressed to doctors, hospitals, nursing homes,

> laboratories, home care agencies and suppliers of medical equipment.

>

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[Guest guest]

It's about time. I hope this nonsense stops!

LM