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NOVARTIS: Federal Prosecutors Rein in Kickbacks to Doctors
Tuesday, Apr. 30, 2013
Novartis Pharmaceuticals is once again under scrutiny from federal prosecutors over its educational speaking programs, which prosecutors allege are nothing more than kickbacks to doctors for prescribing their products. Prosecutors allege that Novartis’ U.S. business unit essentially bribed doctors in the form of lavish dinners, fishing trips, and speaking fees between $750 and $1500, all under the guise of educational programs. It has been a long-standing practice for drug companies to pay doctors to educate other doctors about new prescriptions, but regulators have struggled to define when payments to doctors for educational purposes become bribery. Are payments by pharmaceutical firms to doctors for educational purposes legitimate?
Kirk: I am happy this lawsuit will finally disrupt what has been “business as usual.” Pharmaceutical and medical device firms have long “bribed” doctors to prescribe the firm’s products. Novartis’ payments, if accurately described, clearly cross the line into bribery. The cost to society is huge as health care costs escalate to cover the payments. Coming disclosures of payments under health care reform will dampen the payments. This lawsuit should help too.
Patrick: It is clear that Novartis took substantial liberties with its “educational programs.” At the same time, Novartis’ claims that such practices are “accepted and customary practice in the industry,” do bear some weight despite not absolving them of wrongdoing. The source of the controversy is the ambiguity between money for educational purposes and bribery for prescribing a firm’s drugs. Let’s face it; companies will continue to use the grey area to their advantage until regulators set clear standards.
NEXT STORY: INNOCENT LOBBYING OR TAX EVASION?