Just Say “No” to Vendor Perks

Money, free travel, grants, honoraria, and other valuable goods and services sound nice but when they’re offered by drug makers and other vendors to physicians, they’re called illegal kickbacks. Kos Pharmaceuticals, a subsidiary of Abbott Laboratories, found that out the hard way. The Delaware-based company agreed, Dec. 7, to pay more than $38 million to settle criminal and civil allegations under the False Claims Act.

The civil settlement resolves allegations that Kos offered and paid doctors, other medical professionals, physician groups and managed care organizations, illegal kickbacks in violation of the Anti-Kickback Statute to get them to prescribe or recommend Niaspan and Advicor.

Specifically, two doctors proposed that they would endorse the use of Kos products, including Advicor, for the treatment of cholesterol in exchange for a series of payments. Between January 2002 and June 2006, one of the doctors wrote 4,130 prescriptions for Kos products. According to the court documents, some of those prescriptions were paid for by Medicare and Medicaid. From 2002 to 2004, Kos made a series of payments to the two doctors or a third-party intermediary in the form of “sponsorship” of continuing medical education classes conducted by the doctors and purported speakers’ fees.

The U.S. Department of Justice (DOJ) contends that Kos promoted the sale and use of Advicor for first-line therapy for management of mixed dyslipidemias (a disruption of the lipids in the blood). Such an off-label use was not approved by the U.S. Food and Drug Administration (FDA) nor was it a medically-accepted indication for which the government and state Medicaid programs provided coverage for Advicor.

“Paying kickbacks to doctors and marketing drugs for off-label purposes will simply not be tolerated,” said Daniel R. Levinson, inspector general of the U.S. Department of Health and Human Services (HHS). “Kos, which currently does not sell any products that are reimbursed by federal health care programs, has agreed that, should it seek to sell such products anytime in the next five years, the company will enter into a formal compliance program with OIG.”

Legal experts caution that such arrangements with medical equipment vendors carry similar risks and fines.

Source: DOJ press release

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4 Responses to “Just Say “No” to Vendor Perks”

  1. Ted Kalota says:

    Aye, I’ll stop allowing drug Reps. to feed my staff lunch as soon as Congressmen and Senators outlaw earmarks, lobbyists and bribes. Get real. Do you think for one-minute any Physician is basing medical decisions on if there is a slice of pizza in the break room?

  2. Dale says:

    I totally agree with Ted. I do not know a physician who is basing their medical decision making on whether or not lunch is being served. Drug reps provide a tremendous service to the physician and more importantly to the patient by providing samples. With the cost of drugs being what they are, many patients would not otherwise be able to obtain them. Also it provides an opportunity for the physician and the patient to determine if it is the right drug for the patient. So keep the meals coming. We’ll sit and discuss and ask questions about what your drug will do for my patients.

  3. Maria Teresa W. says:

    That tremendous service extends to us Reimbursement Specialist Coders. If a office does not have one (me) then it falls on the physician and staff to understand how to fill out that encounter for Jcode, drug infusion, administration etc. not knowing this process can delay payment.

  4. Infinity says:

    That’s not just logic. That’s raelly sensible.

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