Kickbacks and Physician Prescribing Habits

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Historically, healthcare providers have been greatly influenced by payments from the pharmaceutical industry. The results of a study published in 2013 in the Social Science Research Network, confirmed the obvious, that pharmaceutical kickbacks cloud the medical judgment of health care providers. Numerous cases have been brought by whistleblowers exposing such conduct.

The purpose of the study was to assess whether a health care provider who is paid by a specific pharmaceutical firm is more likely to prescribe that pharmaceutical firm’s drugs. To empirically answer this question, the authors used Pro Publica’s “Dollars for Docs” and “Prescriber Checkup” databases to conduct a cross-sectional regression analysis of physician prescribing habits. Because of the availability of prescription-level data, the authors were able to quantify the impact of payments on prescribers.

The authors concluded, “A payment from a pharmaceutical company corresponds to, on average, an additional 29 Medicare prescriptions per year and this number rises to nearly 100 prescriptions if the payment is at least $1000.” As the authors stressed, the payment-for-prescription effect continues to scale with increasing payments. This type of Healthcare Fraud is a violation of the False Claims Act and Anti-Kickback Laws.

While the increase in prescribing is noteworthy, the true impact is likely far greater when the drug involves high-priced pharmaceuticals that are prescribed by a small cadre of health care providers. In such instances, the payments to loyal prescribers are typically far greater than $1,000, and the resulting impact on government health care programs can quickly climb into millions of health care dollars.