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What is a pharmaceutical kickback?

On Behalf of | Feb 20, 2020 | Medical Licensing

As a medical professional in Pennsylvania, you need to stay up-to-date on medications and treatments that could help your patients. This means you may often meet with representatives from pharmaceutical manufacturers who want to advertise new medications and encourage you to write prescriptions for them. Even though many forms of pharmaceutical marketing are legal, kickback schemes are not. Becoming involved in a pharmaceutical kickback scheme could lead to severe penalties, including the loss of your license.

Pharmaceutical kickbacks are illegal under federal law. According to the U.S. Inspector General’s Office, the Anti-Kickback Statute prohibits the use of payments and rewards to induce patient referrals or business transactions. This means it is illegal for pharmaceutical companies to offer you incentives, payments or rewards to encourage you to prescribe their drugs to your patients. The IG Office states that this legal statute applies to both parties in a pharmaceutical kickback scheme. As such, there could be penalties for a pharmaceutical company that offers kickbacks and for you if you receive a kickback.

Further information on the AKS from the Inspector General’s Office indicates that the law may apply even to medications or services that are medically necessary. For example, if you receive a kickback for prescribing a new drug, you may not avoid penalties even if you claim you would have prescribed the drug without the additional reward or payment. Being involved in a kickback scheme may lead to fines as well as the loss of your license.

This general information on pharmaceutical kickbacks is intended to be educational; it should not be interpreted as legal advice.