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Drug company giveaways could be fraud, feds warn. (Voluntary Draft Guidelines).

WASHINGTON -- Tread cautiously when accepting a speaking engagement or dinner invitation from a pharmaceutical representative.

New voluntary guidelines proposed by the federal government say that such actions--depending on how they're carried out--may be suspect under the False Claims Act, the federal antikickback law.

The Department of Health and Human Services' Office of the Inspector General is seeking comment on the draft guidelines, which advise pharmaceutical manufacturers on what to consider when developing a compliance program for doing business with federal health care programs, including Medicare.

The relationships that drug companies have with physicians and other health care professionals warrant careful examination, the inspector general's office said.

The False Claims Act prohibits payment or soliciting anything of value to induce referral or purchase of a product or service that's reimbursable by any federal health care program.

The guidelines listed several activities that are suspect under the False Claims Act.

One risky practice is the "switching arrangement." Under this arrangement, pharmaceutical manufacturers offer cash payments or other benefits to physicians, pharmacies, PBMs (pharmacy benefit management companies), or other parties each time a patient's prescription is switched to the manufacturer's product from a competing product.

Drug manufacturers were advised by the inspector general's office to carefully review any marketing practices that use these product-conversion arrangements.

Another area of concern is when pharmaceutical manufacturers engage physicians to act as consultants, advisers, or investigators in connection with various types of marketing and research activities, the guidelines note.

"While there may be legitimate purposes to these arrangements, they pose a substantial risk of fraud and abuse," the guidelines continue.

According to the guidelines, manufacturers should ensure that they compensate physicians and other health care professionals only for "actual, reasonable, and necessary services, and that the arrangements aren't just a front for otherwise improper payments.

Without the proper safeguards, such activities could result in payments to physicians for drug referrals to patients.

For example, a high-prescribing physician who receives a $10,000 grant from a pharmaceutical company to do research should carry out the research, instead of being paid "to do nothing," a spokesman with the inspector general's office told this newspaper.

In addition, the payment should not exceed the value of the service provided.

Scholarships and educational funds, grants for research and education, and sponsorship or other financing related to third-party educational conferences attended or taught by physician, are examples of other arrangements that might fall under the proposed antikickback statute.

Physicians tend to have a lower risk for unlawful intent in activities such as those, the spokesman said.

If fraudulent behavior occurs, "it most likely comes from the pharmaceutical side."

When physicians do find themselves in trouble, it tends to because they demanded money or other rewards for being high prescribers of a certain drug.

"That's illegal," the spokesman said.
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Author:Silverman, Jennifer
Publication:Clinical Psychiatry News
Date:Nov 1, 2002
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