Question

Emmanuel Pharmaceutical Company (EPC) manufactures drugs to treat sleeping disorders in adults. Its newest produce is called SleepyTime, which has been FDA approved. EPC approaches Dr. X, a reputable neurologist at University Hospital, and asks if she would be interested in a research study sponsored by EPC. The study proposes to compare the efficacy of the SleepyTime to another well-known sleep disorder drug: DozeOff. 100 subjects will be enrolled; half will receive SleepyTime and the other half will receive DozeOff.

As part of the study, the subjects’ sleeping patterns will be observed through a two-way mirror for for a total of 8 observations through 8 weeks. EPC will provide the drugs for the study at no charge. It will also build sleep center at University Hospital where the subjects will stay while they are being observed. The projected cost of the lounge is $1 million.

Dr. X and University Hospital agree to the study.

After the study concludes, Dr. X publishes the results in NeuroPharma Journal. She concludes that subjects who took SleepyTime went to sleep faster and experienced less side effects than those that took Doze-Off. Dr. X begins clinically prescribing SleepyTime to her patients diagnosed with sleep disorder. She speaks at conferences around the world about the results of her study, some of which are sponsored by EPC. EPC pays Dr. X and her family to attend several conferences. EPC stock begins to rise primarily based on the success of SleepyTime.

Dr. X approaches EPC for another research study. She would like EPC to sponsor a study that examines the side effects of drugs designed to help adults stay awake, some manufactured by EPC. EPC rejects the proposal. Dr. X becomes furious to the point that she no longer prescribes SleepyTime or any other EPC product.

Did EPC and/or Dr. X violate the federal anti-kickback statue? What other issues are implicated?

Answer 1

Answer:

The federal Anti-Kickback Statute is a healthcare fraud and abuse statute that prohibits the exchange of remuneration, which the statute defines broadly as anything of value, for referrals or for services that are payable by a federal program, which, in the context of healthcare providers, is Medicare.

EPC and Dr. X has violated anti-kickback statue as EPC is paying for the conferences that are being attended by Dr. X and her family and as a courtesy of which Dr. X is prescribing the medicines of EPC to her patient and the audience of the conference.