Physicians’ Relationships with Pharmaceutical Companies and Medical Device Manufacturers

The U.S. Department of Justice ("DOJ") and the Office of Inspector General for the U.S. Department of Health and Human Services ("OIG") have indicated that they intend to begin criminally and civilly prosecuting physicians for maintaining improper financial relationships with pharmaceutical manufacturers and/or medical device manufacturers. DOJ and OIG are particularly concerned about arrangements in which pharmaceutical manufacturers or medical device manufacturers pay physicians' consulting fees, pay for physicians to travel for seminars and pay physicians advanced royalties for the development of medical devices or pharmaceutical products, as well as other ways in which pharmaceutical manufacturers and/or medical device manufacturers can provide remuneration to physicians that may influence prescribing activity or use of medical device products. Lewis Morris, Chief Counsel for OIG, is quoted in The New York Times on the OIG's reasoning: "What we need to do is make examples of a couple of doctors so that their colleagues see that this isn't worth it. We want to send the message to the physician community - particularly surgeons - that you can't do this." Potential penalties include criminal penalties, civil money penalties, exclusion from the Medicare and Medicaid programs and other fines.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.