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April 29, 2020

Pharmaceutical Philanthropy or Resisting Regulations?: Why Pharmaceutical Donations Do Not Violate the Anti-Kickback Statute


With health care costs spiraling out of control in recent decades, Americans have been forgoing necessary medical attention. The many federal health care programs instituted to assist patients do not guarantee affordable costs. In an effort to combat this crisis, pharmaceutical companies have taken the initiative to absorb some of these costs through patient assistance programs (PAPs). Pharmaceutical companies attract low-income patients to drug-specific PAPs by offering a deep discount on their medications. This leads to an increase in demand, which ultimately can be used to increase price and thus profits. Consequently, the government has begun to scrutinize PAPs for violations of the Anti-Kickback Statute, which penalizes individuals for paying or receiving kickbacks for health care referrals. Additionally, the government has alleged that Anti-Kickback Statute violations open the door for violations of the False Claims Act, which penalizes individuals who submit fraudulent reimbursement claims to federally funded health care programs. Courts should step in to determine whether the scienter requirements for such alleged violations are truly being met. This note calls for courts to apply a direct causal link test, which shifts the analysis of the Anti-Kickback Statute’s intent requirement from the health care professional to the patient. Thus, courts would determine whether a patient intended to participate in a specific PAP as a direct result of the pharmaceutical manufacturer’s donation to that PAP. This direct causal link test provides a thorough means of determining whether or not a health care professional violated the Anti-Kickback Statute by analyzing why the beneficiary chose the PAP. Without fairly considering the patient’s perspective, the analysis does a disservice to the beneficiary who detrimentally relies on the PAP for support and access to lifesaving medications.

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