Proposed Law Will Protect Consumers From Fraudulent Prescribing Practices

Conflicts of interest have served as a catalyst for potentially fraudulent practices amidst practitioners in the medical industry. Subsequently, the money offered by drug manufacturers to doctors may compromise the integrity of the industry. Payments that doctors receive from drug companies for participating in research, consulting, speaking, travel and entertainment may influence their particular prescribing practices. Therefore, the Obama administration has required that future transactions between industry representatives and doctors be disclosed.

According to recent evidence, researchers have acknowledged that payments from drug manufacturers may influence doctors’ treatment decisions and contribute to the already volatile situation plaguing the ambiguous drug industry. Such influential spending may lead doctors to contribute to the already high costs of drugs. By prescribing the drugs they are representing, doctors are perpetuating the growing problem of increasing drug costs.

According to consumer advocates and select member of Congress, the new regulations implemented by the Obama administration will benefit consumers. Under the new health care law, doctors are required to disclose all transactions between themselves and the pharmaceutical industry, therefore fostering an environment more conducive to trustworthy practices. The complete disclosure would force doctors to make decisions in the best interests of their patients, without regard to their financial interests.

Current records suggest that a significant amount of doctors receive some form of payment from drug and device companies in exchange for services pertaining to their expertise. By providing industry manufacturers with lecture material and advice, doctors may receive as much as a million dollars a year. According to an analysis conducted by The New York Times, approximately 25% of doctors receive substantial cash payments from the manufacturers of drugs and medical devices. Subsequently, a similar analysis discovered that nearly two-thirds of all doctors have received routine gifts of food in exchange for their services.

The New York Times analysis of such transactions found a disturbing trend. According to their findings, doctors receiving payments from drug makers were more likely to practice medicine differently than those who did not. As a result, those who took payments were more willing to prescribe drugs for off label uses and similar unsanctioned applications.

According to the new healthcare law, companies covered by Medicare or Medicaid will have to disclose all of their payments to doctors. The subsequent payment data will be posted on a corresponding website for consumers to analyze at their own discretion.

Manufacturers of prescription drugs and devices will be obligated, under federal law, to report any transactions made between them and doctors for their involvement in developing, assessing and promoting new products. The Obama administration estimates that more than 1,100 drug, device and medical supply companies will have to file reports, generating “large amounts of new data.” Federal officials said they would inspect and audit drug company records to make sure the reports were accurate and complete.

In the event that a company fails to report such transactions, significant penalties will be applied. Neglecting to claim doctor payments will result in a $10,000 for each transgression. However, purposefully neglecting to report payments will receive a steeper penalty. Circumstances where companies knowingly fail to report such claims will result in a penalty of up to $100,000 for each violation.

Individuals in charge of the financial reports will also be held personally liable. Accordingly, the chief executive, chief financial officer or chief compliance officer must attest to the accuracy of each report.

While the new healthcare law was supposed to be in effect by October of last year, their implementation is overdue. The public will have until February 17 to comment on the proposals introduced by the Obama administration. After considering the comments, Medicare officials will issue final rules in correspondence with the proposed law. Once put into action, consumer advocates will have finally gotten one step closer to protecting the public from fraudulent practices.

Allan J. Coukell, a pharmacist and consumer advocate at the Pew Charitable Trusts, said: “Patients want to know they are getting treatment based on medical evidence, not a lunch or a financial relationship. They want to know if their doctor has a financial relationship with a pharmaceutical company, but they are often uncomfortable asking the doctor directly.”

Do I Have a Fraudulent Prescription Practice Lawsuit?

The trial lawyers at The Senators (Ret.) Firm, LLP have decades of experience navigating through complex legislative and regulatory issues and litigating high stakes cases all over the nation. Our law firm focuses on the representation of plaintiffs in fraudulent prescription practice lawsuits. We are currently accepting new cases in all 50 states.

If you or a loved one has received an unnecessary prescription, you may be entitled to financial compensation. For a free case review, please click the link below or call toll free 24 hrs/day 1-(949) 557-5800.