Purdue Pharma and the Anti-Kickback Statute in the Opioid Crisis

Introduction

The court case of US v. Purdue Pharma focuses on the Anti-Kickback Statute, which holds it a felony for an entity to accept kickbacks for providing services or items that are reimbursable by a federal program (Baird, 2021). Part of the problem with this case and others like it is that not everyone agrees on what constitutes a kickback. For example, Illiparambil (2020) writes in the Brooklyn Law Review that pharmaceutical "donations" should not be viewed as kickbacks — even though prosecutors could and have made the case that they function as such. Kickback laws have been in existence for decades, however, with the first going all the way back to 1931 (Raspanti, Roberts & Bosick, 2017).

Today, the Anti-Kickback Statute has led to prosecutions and settlements with pharmaceutical companies like Purdue Pharma for over half a billion dollars (Kraschel & Curfman, 2019). The statute is a costly one to violate, with offenders liable for $100,000 per violation if convicted (Gore, 2020). Part of the problem is that the culture of health care today focuses so heavily on treatments that industries like the pharmaceutical industry thrive because they know there is a market for their drugs. It therefore becomes a matter of getting their drugs into the hands of health care providers who then prescribe them to patients — and to accomplish that requires some form of incentive, such as a rebate or donation.

The Anti-Kickback Statute's Importance

When judged with respect to the Anti-Kickback Statute, this becomes a controversial practice — and one that Purdue Pharma engaged in for years to get OxyContin into the hands of prescribers. The Anti-Kickback Statute makes it illegal for a company to deliberately provide payment in return for the referral of patients or services, such as the prescription of a drug that a company manufactures (Gore, 2020). This statute exists to prevent conflicts of interest from arising in the health care industry. The industry is supposed to put people first — not profit — but when there are for-profit companies like Purdue Pharma with billions invested and billions more on the line, it inevitably becomes about profits. Making the most profit by getting health care providers to prescribe a drug like OxyContin is the primary objective for these companies. They attempt to circumvent the Anti-Kickback Statute by claiming that their rebates or donations are charitable or goodwill actions with no bearing on whether the provider prescribes their drug.

The statute is important because patients have a right to know that they are receiving care that is in their best interest, rather than in the best interests of a for-profit company looking to exploit their illness. In a free market system, the best treatments will naturally be in demand; but because it is a competitive industry, companies attempt to push their products by getting providers to prescribe them — and this is where kickbacks come into play. Purdue Pharma sent its sales representatives to providers and made arrangements with them to push OxyContin onto patients in exchange for kickbacks. Purdue Pharma was just one of many pharmaceutical companies engaging in this practice throughout the 2000s as the opioid epidemic grew (Rios, 2019).

Purdue Pharma's Role in the Opioid Epidemic

For Purdue Pharma, whose case has been working through the courts, it is clear to many observers that the company violated the Anti-Kickback Statute. Numerous journalists have reported on the actions the company took to get its drug to market. The drug itself was so potent that it helped spawn the opioid crisis that ravaged the nation. Purdue Pharma has faced lawsuits in several states for its role in perpetuating that crisis. Its alleged violation of the Anti-Kickback Statute is but one part of a much larger story about the pharmaceutical industry taking advantage of patient illness to market and profit from a drug that many observers consider unnecessarily potent (Rios, 2019).

Purdue Pharma took advantage of the pain that patients were experiencing to sell a powerful drug — that is the allegation and the consensus view of the public, looking back on the opioid crisis (Rios, 2019). As Purdue Pharma faces a host of corruption charges, the Anti-Kickback Statute violation appears to be especially pernicious, yet also all too common given the very nature of the industry today. It is an industry that is too focused on treatment and not focused enough on prevention.

Conclusion

Protecting the health of patients and securing their rights are the reasons health care laws are passed in the first place. The Anti-Kickback Statute was passed to prevent companies from taking advantage of patients by way of providers who might accept payoffs in order to push a drug, service, or device onto a patient even if the patient did not need it. That appears to have been the case with Purdue Pharma, which sought to market the ultra-strong OxyContin by getting providers to prescribe it even to patients who did not require it. The public began to notice when opioid abuse spun out of control and people became addicted to the drug that Purdue Pharma was creating and using kickbacks to bring to market.

Underlying this problem, however, is the deeper problem of culture: health care needs to return to preventive medicine rather than focusing so heavily on treatments. That was one of the goals of the Affordable Care Act, and it is one that hospitals need to embrace so that they do not become ensnared in violations of the Anti-Kickback Statute.