HHS Issues Standards for Pharmaceutical Industry Marketing Practices
Federal officials yesterday issued new guidelines seeking to curtail the "aggressive marketing" tactics regularly used by the pharmaceutical industry to encourage providers to prescribe or recommend certain medications, the New York Times reports (Pear, New York Times, 10/1). Posted on the HHS Office of Inspector General's Web site, a draft of the guidelines states that incentives, including trips, entertainment and expensive meals, could be seen as illegal kickbacks that violate federal fraud and abuse laws. In the draft, HHS Inspector General Janet Rehnquist expressed concern that drug makers' marketing practices could "improperly inflate" health care costs for Medicare and Medicaid (Gersema, Baltimore Sun, 10/1). The new standards also state that "switching arrangements," in which doctors are offered incentives to shift patients from one drug to another, are "suspect under the anti-kickback statute." In addition, the guidelines state that payments to doctors who serve as "consultants, advisers and researchers" for drug companies could "pose a substantial risk of fraud and abuse" if the amount is more than "fair market value for services rendered." Federal officials said that the standards also apply to hospitals, insurers and purchasing coalitions. Although the guidelines are not legally binding, companies that "flout" the standards are "more likely" to be investigated and prosecuted, the Times reports.
Rehnquist suggested that drug companies appoint a compliance officer, set up a hotline for fraud and abuse complaints and consider offering rewards to employees who report "misconduct," the Times reports. She added that compliance with a "voluntary marketing code" established by the Pharmaceutical Research and Manufacturers of America in April was "desirable" but would not "necessarily protect a manufacturer from prosecution or liability for illegal conduct" (New York Times, 10/1). The PhRMA guidelines, which took effect July 1, place restrictions on meals that drug industry sales representatives may purchase for doctors and limit the price of gifts to doctors to less than $100. In addition, the guidelines prohibit the purchase of entertainment -- such as tickets to sports events and films or golf outings -- as gifts for doctors (American Health Line, 8/20). Rehnquist said, "In today's environment of increased scrutiny of corporate conduct and increasingly large expenditures for prescription drugs, it is imperative for pharmaceutical manufacturers to establish and maintain effective compliance programs." The public will have 60 days to comment on the standards, after which time the agency could revise the guidelines (New York Times, 10/1). The standards are available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.