The reason for your prescription lies in a secret. Physicians receive kickbacks from pharmaceutical companies. Pharmaceutical companies and medical device manufacturers made payments to doctors in the United States of $14.67 billion in 2025. This was revealed by the CMS’s Open Payments program. Not one of them will be mentioned in your visit. The doctor is not obligated to tell you about the speaker payment, consultant fee, or the sponsored dinner organized by the pharmaceutical company related to the drug they have just prescribed to you. Numerous studies have already proved this trend: when the physician starts receiving payments from the company, he prescribes more of their drugs. Even when another, cheaper medicine would provide the same results.
How Drug-Maker Kickbacks Influence Physicians
A recent ProPublica analysis found that physicians who receive cash payments and other perks from drug manufacturers prescribe drugs differently on average than doctors who do not receive payouts. According to the study, the more doctors receive, the more their actions are influenced.
Pharmaceutical companies provide kickbacks to doctors with such gifts as:
- Cash
- Discounts and rebates
- Travel payments
- Fancy restaurant meals
- Tickets to concerts or sporting events
- Alcohol
In exchange for these kickbacks, doctors often prescribe their benefactor’s drugs to their patients. In some instances, the drugs may cost more than other drugs on the market that are equally, or even more effective in treating patients’ conditions.
In some cases, doctors’ prescribing behaviors can drastically change in correlation to the kickback he or she is receiving. A doctor may choose to prescribe a manufacturer’s drug until kickbacks end or a better offer comes along. At that point, the doctor may begin prescribing another company’s medications as soon as they start paying kickbacks.
In 2017, doctors in Indiana received $28.9 million in kickbacks from pharmaceutical and medical device companies. Overall, $8.31 billion was received by doctors throughout the entire United States.
When are Kickbacks Illegal?
Under the Anti-Kickback statute, a doctor can be charged with a felony if he or she receives kickbacks from a pharmaceutical or device company that offers, pays, solicits, or receives remuneration to produce referral items or services that are paid for by Medicare, Medicaid, or other federally-funded programs. According to the Department of Justice, “Schemes such as this one undermine the health care system and take advantage of elderly patients who are among the most vulnerable health care recipients.”
Kickbacks from drug-makers may entice doctors to file false claims that could lead to violating the federal False Claims Act as well as state laws. Doctors who are found guilty of violating these statutes could be subject to substantial fines and jail time. They may also be subject to disciplinary action by the state’s Board of Medical Examiners.
If you or a loved one was harmed due to unethical prescribing practices, speaking with prescription misfill attorneys or prescription errors lawyers could be a critical first step in protecting your rights.
Government Efforts to Keep the Public Informed
In 2010, Congress passed the Physician Payment Sunshine Act that requires drug makers to post information whenever they provide a payment or gift to a physician with a value of more than $10. Before this law went into effect, major drug companies, including Eli Lilly, GlaxoSmithKline, and Pfizer began to go public about the payments they made to doctors. In 2002, the Pharmaceutical Research and Manufacturers of America issued guidelines that addressed how drug representatives should interact with doctors. This led to the U.S. Department of Health and Human Services issuing similar guidelines along with strict penalties for drug makers and physicians who violate them.
Since 2015, the federal government has been releasing data online to the public that shows the financial relationships between drug and device makers and doctors. The Open Payments database provides the transparency patients need to make informed decisions regarding their medical care. This database was created under the Affordable Care Act with the intent of reducing the influence of drug companies over doctors’ decisions. People using the database are encouraged to use the information to have open discussions with their medical providers about whether they are on the best medications to treat their conditions or whether the doctor is swayed to prescribe less effective or riskier ones.
There are questions about whether the database will remain in operation if the Affordable Care Act is repealed. Meanwhile, the American Medical Association has criticized it for not being entirely accurate and prejudicial against doctors. Some medical professionals claim that a large chunk of these payments goes toward research and educating the medical community making them a necessity to the medical community.
Resource for Patients Affected by Drug Kickbacks
When kickbacks influence a doctor’s clinical decisions, it can damage public trust and harms the patient-doctor relationship that is crucial to involving patients in their own care. Most importantly, it can put patients’ health at risk. In some circumstances, a patient may be able to file a malpractice claim if harm was caused as a result of the physician’s breach of duty.
If you or a loved one was harmed due to unethical prescribing practices and are wondering about your legal options if a doctor makes an error, consulting with prescription misfill attorneys or prescription errors lawyers could be a critical first step in protecting your rights.
