Industry Payments to Physicians Are Kickbacks. How Should Stakeholders Respond?

Abstract

Payments from the pharmaceutical industry to US physicians are common. In determining which payments rise to the level of an illegal kickback under the Anti-Kickback Statute (AKS), the Department of Health and Human Services' Office of Inspector General (OIG) has stated in nonbinding guidance that influencing or "swaying" physician prescribing is key. OIG has highlighted as a compliance standard the Pharmaceutical Research and Manufacturers of America Code on Interactions with Health Professions, which stipulates that permissible payments are those that do not interfere with prescribing. However, recent evidence has shown that most payments influence physician prescribing, driving higher prescription drug costs by increasing use of brand-name and low-value drugs. This evidence implies that many payments that are currently commonplace could be subject to prosecution under AKS. Given that these payments increase costs to patients and the health care system, there is a public interest in curtailing them. This article proposes a range of actions available to stakeholders-including industry, providers, regulators, and payers-to mitigate the cost-increasing effect of industry payments to physicians.