PhRMA code, OIG initiative expected to change doctor-industry relationship

WASHINGTON — Recent initiatives by the drug industry and federal regulators are expected to change the relationship between drug companies and doctors, said an expert in health law speaking here.

Scrutiny of the pharmaceutical industry by regulatory agencies led to the recent publication of guidelines for self-regulation by the Pharmaceutical Research and Manufacturers of America (PhRMA). That, along with a draft compliance programs generated by the Office of the Inspector General, is expected to change the relationship between industry and physicians, said Paul Kalb, MD, JD, here at a National Congress on Health Care Compliance.

The PhRMA guidelines are voluntary, but they result from the intense scrutiny recently given to industry-physician relationships, Dr. Kalb said.

As an example, he cited the landmark case against TAP Pharmaceuticals in September 2001. The company was fined $875 million for abuse of sample distribution, grants and kickbacks. The lawsuit alleged that physicians “knowingly received kickbacks from the company,” Dr. Kalb said.

Industry is being criticized for abusing the average wholesale price (AWP), Medicaid rebates, kickbacks and samples, he said. The PhRMA code, which is voluntary for industry, prohibits those practices.

Dr. Kalb said key issues for the Office of the Inspector General include disclosure or lack of disclosure between the parties and whether the parties involved are being truthful or deceptive.