Skip to main content Back to Top


Pharmacists Should Heed Antikickback Law, Experts Advise

Donna Young

Health-system pharmacists must take steps to ensure that they are in compliance with the federal antikickback law when accepting anything of value from a pharmaceutical company, said Vicki Robinson, chief of the industry guidance branch at the Department of Health and Human Services Office of Inspector General (OIG).

Pharmacists and other health care providers who knowingly and willfully solicit or receive remuneration from a drug company in exchange for federal health care program business are in violation of the law, she said.

Health-system pharmacists must also ensure that they are not caught in a scheme in which a pharmaceutical company offers to give off-contract or hidden price reductions in the form of educational and research grants, free drug products, or payments for consulting or speaking services in an attempt to avoid meeting Medicaid's best price requirements, said Kevin McAnaney, a Washington, D.C., attorney who practices health care fraud and abuse law and is a former chief of OIG's industry guidance branch.

Under the Medicaid rebate law, manufacturers that give large discounts to private-sector purchasers must give the same discounts to Medicaid and 340B-covered entities.

Even if an educational or research program is legitimate, McAnaney said, if funding provided by a pharmaceutical company is tied in any way, or conditioned in whole or in part, to the purchase of the company's product, the persons offering or accepting the funding are breaching the law.

"It's OK to get a grant, but that has to be done totally separately from whatever negotiations you have about a price or placement [of a product] on a formulary," he said.

Pharmaceutical sales representatives should not be negotiating prices of drugs or formulary placement using grants of any kind as an inducement, McAnaney said.

Offers of grants should be made separately from any other financial relationship a firm has with a health system, he added.

Pharmacists would be well advised to review OIG's Compliance Program Guidance for Pharmaceutical Manufacturers (PDF), Robinson said.

OIG published its final guidance for drug makers last year in the May 5, 2003, Federal Register, she noted.

"I think it offers very good guidance for pharmacy personnel and other people in the industry," Robinson said.

The document is accessible online at OIG's Fraud Prevention & Detection Web site at

The agency issued its Compliance Program Guidance for Hospitals (PDF) in February 1998 but is in the process of updating (PDF) that document and plans to issue a draft this spring, which will be open for public comment, Robinson said.

"It's a project that is very, very actively moving right now," she said. "We are trying to get it out soon because there's been a lot of interest in it and because we'd really like to get the public's feedback. We are very interested in hearing from the public once we put the draft out as to [whether] we've covered the issues they want to see or haven't covered some issues that they would like."

As OIG's chief of industry guidance, Robinson said, she is "always open to hearing from people even if there's not a formal comment period open when people have issues of interest. I tell people, and I do read everything that comes in, that they are always welcome to write in and let me know what they are thinking about things."

The compliance guidance documents, she counseled, are a "good first place" to start for hospitals, pharmacists, and other health care providers and industry personnel when determining if they are complying with the antikickback statute.

"I particularly would suggest that people look at the risk area section" of the guidance document for pharmaceutical makers, she advised. "That's the section where we have laid out a number of the key risk areas under the kickback statute. We did this in an attempt to really educate the provider community and to try to make folks aware of the areas that they need to be particularly paying attention to. And certainly education and research grants [and] consulting and advisory payments are areas that we have highlighted because they can be subject to risk."

Health care providers should be careful about taking money where there are no bona fide services that are going to be provided, Robinson said.

"People should be very suspicious if they are offered money and it doesn't appear that they have to do anything to earn it; that would be a very suspicious arrangement," she warned. "The old adage 'If it seems too good to be true'" should be applied when a drug company is offering money to a health system for anything.

Robinson suggested that pharmacists who make arrangements with pharmaceutical firms for any consulting or advisory services should structure the agreement to concur with the federal government's "safe harbor" provisions.

The Medicare and Medicaid Patient and Program Protection Act of 1987 provides safe harbors designed to specify various payment and business practices that would not be treated as criminal offenses under the antikickback statute.

Pharmacists who are unsure whether a contract arrangement offered by a drug company is in violation of the antikickback law should seek an OIG advisory opiniona legal opinion issued about the application of OIG's fraud and abuse enforcement powers regarding the existing or proposed business arrangement.

An OIG advisory opinion is legally binding on HHS and those who request it.

Anyone who receives a favorable advisory opinion is protected from OIG administrative sanctions so long as the arrangement at issue is conducted in accordance with the facts submitted to the agency, according to OIG. However, no person or entity can rely on an advisory opinion issued to someone else, the agency warned.

OIG posts all advisory opinions on its fraud prevention Web site.

"We often work with the parties to clarify their arrangements or to understand better what they're doing, and so it tends to be a fairly interactive process," Robinson said.

OIG also offers an e-mail service that alerts subscribers when new advisory opinions are posted or when the agency issues new compliance guidance documents, she added.

"It's a great way for hospitals to keep up to speed with what we are doing," Robinson said.

OIG's guidance for drug companies also suggests that the Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals (PDF) provides "useful and practical advice for reviewing and structuring" contract relationships among pharmaceutical firms and product purchasers.

PhRMA issued the code in 2002 and released an updated version this past January, according to a spokesperson for the association.

Although compliance with PhRMA's code will "not protect a manufacturer as a matter of law" under the antikickback statute, it will "substantially reduce the risk of fraud and abuse and help demonstrate a good-faith effort to comply with the applicable federal health care program requirements," OIG's guidance states.