Physicians are required to disclose kickbacks received from pharmaceutical companies to Medicare and Medicaid. Obtaining kickbacks from drug companies can compromise a physician’s medical judgment. Moreover, the receipt of money from these companies may also be illegal. According to the kickbacks statute, violating the law could result in a fine up to $25,000 and up to five years in jail. ProPublica has also investigated whether physicians receive perks from pharmaceutical companies. Their findings suggest that doctors who receive kickbacks from these companies tend to prescribe medications differently than physicians who do not.
This practice violates the Anti-Kickback Statute, which protects American citizens from fraudulent acts. Kickbacks may also disguise more nefarious behavior. Physicians involved in pharmaceutical kickbacks are often prosecuted under the False Claims Act. In its simplest form, a pharmaceutical kickback may involve direct cash payments or material gifts given to physicians. Other forms of kickbacks may include lucrative consulting contracts, speaking fees, or even quotas or flat payments per prescription.
Since 2010, there have been reports of pharmaceutical companies influencing physicians and doctors’ decisions. The Institute of Medicine has called on doctors to end industry conflicts of interest by self-regulation and to disclose industry payments to physicians. Currently, ten of the largest pharmaceutical companies in Canada are voluntarily disclosing the amount of kickbacks they give physicians. As a result, patients are better informed about their physician’s relationships with pharmaceutical companies.