Physicians and Pharmaceuticals: What are the Rules?

prescription medicine kickbacks

The relationship between pharmaceutical companies and medical providers has been a long and complicated one. Not so long ago, physicians were being treated to lavish trips, tickets to expensive concerts, and fancy meals in the name of education. Representatives from drug companies were given seemingly endless money to convince doctors that their drug was the best on the market. The idea was that the more gifts and freebies, the more prescriptions were written. While it seemed to be a mutually beneficial relationship, concern began to grow that one part of the equation was losing out: the patient. Public perception was that when it came to choosing medicines, doctors were not doing what was best for their patients; they were doing what was best for their pockets. Public opinions of big pharmaceutical companies soured. In an effort to right the problems in the industry and restore the public’s faith, in 2009 The Pharmaceutical Research and Manufacturers of America (PhRMA) updated its code of ethics to include banning all kickbacks.

Many physicians deny that gifts and meals influence their prescription writing. Studies show differently. In 2000, the Journal of the American Medical Association showed a direct correlation between receiving gifts and writing prescriptions. This applies even to small gifts like pens and stethoscopes. Doctors are more apt to write scripts for meds that come from companies that give them things, even though it is subconscious. It is part of the human nature to want to reciprocate when a gift is given.

The focus of the pharmaceutical industry has shifted its focus to pure education. All interactions with doctors and healthcare workers must be of educational or scientific value. Companies can provide “modest” meals for medical offices, as long as there is an educational component. The rep must use the time to teach about their product. Gone are the days that lunch could be dropped off with a stack of brochures and a bunch of pens. Also, all “lunch and learn” sessions must be held in-office. The code has banned any meals provided outside the office.

It is important for any items provided to the office be 100% educational. There can be no personal use or possible personal use of any gift. For example, a heart diagram poster for the exam room is acceptable, because it provides useful information and can assist with patient education. A small DVD player that shows an educational video about the heart is not, because the provider could use it outside of the office for personal use. Even small items such as pens, notepads, and clipboards are no longer deemed acceptable gifts, despite the fact that they are of little value. Any educational gifts that are provided should be sporadic and have a value of no more than $100.

Pharmaceutical companies are permitted to sponsor CME courses. There are several criteria that must be followed closely. The class should not be in support of a single medicine and the company may not have any part in planning the course. Also, any financial aid is to be given to the organizer to disburse among all participants. If a company pays for a particular physician, that is considered a cash gift. Also permissible is financial support for a conference of a meeting. These follow the same rules as CME. Donations to defray cost to the physicians must be disbursed evenly and education must be the main focus of the gathering.

One way the pharmaceutical companies have continued trying to focus attention on the top producers is to make them a paid speaker. Reps target the top 20% of their doctors because studies show that this group writes as many prescriptions as the rest of the 80%. The best way they can court the top tier is to make them what the industry calls “thought leaders.” The doctors are paid for their time and knowledge and are educated on a certain drug and then sent out to speak to other doctors. The code indicates that training must take place in an appropriate venue and specifically names resorts and vacation spots as inappropriate. The 2009 ethics code allows for speakers as they are seen as a “valuable part of the industry.” It permits that they be paid for their time, lodging, travel, and meals. It is imperative that in turn the doctor provides a “valuable service to the company” as well as makes it clear that they are being paid for their endorsement. Physicians who do take on this role have the responsibility to ensure that is more than just being a “token consultant” and that actual appropriate education is being provided.

Understanding what is and is not appropriate in the pharmaceutical rep /doctor relationship is important for both medical offices and patients. Physicians’ number one concern should always by the patient. Maintaining a professional and ethical relationship with their reps ensures that they are always putting their patients’ needs above anything else.

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The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.


Wazana, Ashley. (January 19, 2000). Physicians and the Pharmaceutical Industry: Is a Gift ever just a Gift? The Journal of the American Medical Association. Retrieved December 6, 2012 from

Spiegel, Alix. (October 21, 2010). How to Win Doctors and Influence Prescriptions. NPR. org Retrieved December 6, 2012 from

Code on Interactions with Healthcare Professionals. (July 2008). Retrieved December 6,2012 from