Bush Administration’s Proposed Physician Gift Guidelines Criticized by Pharmaceutical Industry

The New York Times on Dec. 26 examined opposition to guidelines proposed by the Bush administration to restrict gifts that pharmaceutical companies offer to physicians and health insurers to encourage them to prescribe or recommend certain treatments. The proposed guidelines, issued by HHS in September, state that gifts such as trips, entertainment and expensive meals "looked like illegal kickbacks" that violate federal fraud and abuse laws (Pear, New York Times, 12/26/02). The guidelines also say that "switching arrangements," in which physicians receive gifts to shift patients from one treatment to a different medication, are "suspect under the anti-kickback statute." In addition, the guidelines state that payments to physicians who serve as "consultants, advisers and researchers" for pharmaceutical companies could "pose a substantial risk of fraud and abuse" in cases where the amount paid exceeds "fair market value for services rendered" (California Healthline, 10/01/02). HHS plans to issue final guidelines in the next few months.

According to a coalition of 19 pharmaceutical companies, the proposed guidelines are "not grounded in an understanding of industry practices," which include payments to health insurers to increase the use of certain treatments and to have medications added to prescription drug formularies, as well as gifts to physicians who switch patients to certain treatments. Dr. Michael Maves, executive vice president of the American Medical Association, said that the practices help fund professional education programs for physicians. He added, "Without the financial support from industry, medical societies would most likely be forced to curtail or stop offering these important educational programs." The guidelines could lead to increased prescription drug prices because pharmaceutical companies "may be less willing to offer large discounts if those discounts cannot be tied to movements in the market share," Alissa Fox, policy director for the BlueCross BlueShield Association, said (New York Times, 12/26/02).