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The US Congress passed anti-kickback laws in 1972 to protect patients from unscrupulous healthcare providers and Pharma companies who exchange cash and goodies to promote drugs and devices. Apparently, some people did not get the memo. 

While luxury vacations and payola to physicians from the medical industry leveled off after enactment of laws against the practice, compensating physicians for their opinion and their prescriptive power has not gone away. In a Special Fraud Alert, the Department of Health and Human Services Office of Inspector General reports that “drug and device companies have reported paying nearly $2 billion to healthcare providers for speaker-related services” in the last three years. 

Here is how it works. Pharma and medical device companies offer speaking deals to well-known or high-prescribing physicians. The speaker’s honoraria may require the provider to write a minimum number of prescriptions for a medication or product. Events billed as educational opportunities take place in swank locales and venues, often in the context of a larger entertainment or sporting activity. Other physicians might be paid to attend the presentation in the event their expertise is needed. 

Bottom line, the Pharma and medical device industry pays, in one way or another, certain physicians to help market their product. This includes prescribing products to patients who cannot know their doctor is on the take for marketing a drug that may not be the best on-label or off-label choice for their unique health profile. 

Pay-offs to prescribing physicians can mean big money, while the impact on patients can mean big risk. In one case, Salix Pharmaceuticals wined and dined gastroenterologists to boost their brand and prescribe Xifaxan, an anti-diarrhea drug, for patients with irritable bowel syndrome (IBS), a painful and common condition of the large intestine. Although Xifaxan was not approved for treatment of IBS, Salix sought to boost profits through its off-label use. In the end, the New York US Attorney settled with the successor owner of Salix for $54 million for its practices with Xifaxan and other drugs. 

In 2020, the Manhattan US Attorney settled fraud allegations against Novartis Pharmaceuticals Corporation for its “speaker programs.” The settlement cost the Pharma company $678 million. Said US Attorney Audrey Strauss, “For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs.  Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increases drug costs for everyone.”

In the best case, Big Pharma works closely with the healthcare industry to develop and provide medications and devices to speed human healing and ease suffering. In the worst case, the overweening greed of Pharma companies casts the patient aside in search of a buck—as occurred with the opioid crises instigated by a handful of pharmaceutical companies in the 1990’s. 

Talk to your healthcare provider about the appropriateness and use of drugs you are prescribed. If you are injured through a medication error—speak with our legal team. 

Award winning law firm aggressively pursues compensation for patients injured by medical mistake 

Whether you are in Washington, DC, Baltimore, Maryland or elsewhere in the US, Schochor, Staton, Goldberg, and Cardea, P.A. can help if you or a family member is seriously injured through medical negligence. Contact us today or call 410-234-1000 to schedule a free consultation to answer your questions.