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The government warned drug companies in a compliance guide
for the drug industry that many of the techniques they use
to sell their drugs risk violating federal fraud and abuse
laws.
The guide tells drug manufacturers
that they must not offer any financial incentives to doctors,
hospitals, insurers or pharmacists to encourage or reward
the prescribing of particular drugs, as these types
of incentives have a high potential for fraud and abuse.
Additionally, federal officials oppose the practice of some
drug companies of offering gifts and entertainment to doctors.
A federal law, known as the antikickback statute, prohibits
such payments under Medicare or Medicaid, which
combined spend more than $30 billion a year on prescription
drugs. However, the practice remains a part of other
industries.
Marketing practices that increase federal costs, interfere
with clinical decisions and lead to the overuse or misuse
of drugs were of particular concern, according to the guide.
Drug companies did not agree with many of the provisions
of the compliance guide, which also states that that drug
companies could face prosecution for making payments to health
plans or benefit managers, the companies that manage drug
benefits, to encourage the use of their drugs.
Many health plans and benefit managers compose lists of recommended
drugs known as formularies, and sales of drugs on such lists
often increase rapidly. Some drug manufacturers therefore
offer payments to the people who make up the lists, a practice
which may be unlawful.
Additionally, the guide warns drug companies that their research
and education grants must be separate from their marketing.
For example, if a drug company has
any influence over the content of a professional education
program or the choice of speakers, "there is a risk that
the program may be used for inappropriate marketing purposes,"
according to the guide.
Another practice condemned by the guide is when drug companies
pay doctors to listen to their sales pitches. This practice
is also susceptible to fraud and abuse.
Moreover, according to the guide drug manufacturers that
give their sales agents excessive bonuses and expense accounts
may be intentionally motivating their sales employees to use
entertainment or other rewards to promote drug sales.
NY
Times April 28, 2003
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