Costco Pharmacy Kickbacks

business_ethics_highlights_2 This is an interesting case, from both an ethical and regulatory point of view. Costco (as a company) has come under scrutiny because 2 of its pharmacists violated the rules set out by their professional regulatory body. Details here are scarce, so we don’t know for example whose idea it was, or whether the pharmacists in question profited personally (there’s no mention of that). It’s also worth noting that the payments that were made were ones that could “reasonably be regarded as” inappropriate. We note this not to point out the weakness of the case (i.e., that “reasonably” is not the same as “definitely”), but as an opportunity to point out that all kinds of corruption gets labelled as something else. Bribes get labelled “consulting fees.” And so on. In the present case, the pharmacy asked the drug company for money to cover “advertising services.” But a kickback by any other name….

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LINK: Costco pharmacy directors plead guilty to accepting kickbacks (by Jesse Mclean for The Toronto Star)

Two Costco pharmacy directors pleaded guilty to accepting illegal kickbacks from a drug company to get its medications stocked at the retail chain.

Joseph Hanna and Lawrence Varga admitted to soliciting improper payments, known as rebates, from generic drug manufacturer Ranbaxy, according to an agreed statement of facts presented Monday at Ontario College of Pharmacists disciplinary hearing.

Costco received more than $1.2 million in payments from Ranbaxy for advertising services, which could reasonably be regarded as illegal rebates, the disciplinary hearing heard…

What do you think?


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