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In-Office Sale of Products okay?

May 15, 2012
Question:

Hello Jennifer,

Can physicians profit from in office product sales (i.e. vitamins, nasal washes, skin care products etc).  The AMA seems to frown upon this but I know many physicians that do this.  Is it legal or are there any other issues that one need to be concerned with?
 
Many thanks,

Dr. S.
 
Answer:

No rule exists prohibiting you from selling products in your office - generally.  However, there are prohibitions and regulations regarding specific products (and devices).  For example, clearly if a product is not FDA approved, you should not be advertising sale or selling in your office.  Of course, this is a very general question and to opine on a specific product we would need to know what product you intend to sell.  Depending the type of product, our review would vary.  Prescription drug sales is highly regulated, moreso than other the counter beauty products, and therefore may require a more stringent review - checking with more government agencies, etc. 
 
Assuming that the products being offered for sale by your office are permissible, you do need to be aware of other regulations.  For example, New York Education Law 6530 considers it professional misconduct to exercise “undue influence on the patient, including the promotion of the sale of services, goods, appliances, or drugs in such manner as to exploit the patient for the financial gain of the licensee or of a third party.”  Therefore, you need to take action to alleviate any potential for undue influence.  As an example, you should notify the patient of the availability of the product elsewhere. 
 
Of note, the American Medical Association is not supportive of selling products and states so in Ethics Opinion 8.062 available here: http://www.ama-assn.org/ama/pub/physician-resources/medical-ethics/code-medical-ethics/opinion8062.page, which states:
 
“The sale of non-health-related goods by physicians presents a conflict of interest and threatens to erode the primary obligation of physicians to serve the interests of their patients before their own. Furthermore, this activity risks placing undue pressure on the patient and risks demeaning the practice of medicine.”
 
The opinion goes on to state that with limited exception, physicians “should not sell non-health-related goods from their offices or other treatment settings.” 
 
A related opinion 8.063 available here: http://www.ama-assn.org/ama/pub/physician-resources/medical-ethics/code-medical-ethics/opinion8063.page addresses the sale of health related products from physicians’ offices.  Of note, the opinion specifically states that selling includes endorsing products patients purchase elsewhere that result in direct remuneration for the physician and:

“In-office sale of health-related products by physicians presents a financial conflict of interest, risks placing undue pressure on the patient, and threatens to erode patient trust and undermine the primary obligation of physicians to serve the interests of their patients before their own.”

Further, guidelines are introduced should you elect to sell products in your practice (or on your website), as follows:

(1) Physicians who choose to sell health-related products from their offices should not sell any health-related products whose claims of benefit lack scientific validity. When judging the efficacy of a product, physicians should rely on peer-reviewed literature and other unbiased scientific sources that review evidence in a sound, systematic, and reliable fashion.

(2) Because of the risk of patient exploitation and the potential to demean the profession of medicine, physicians who choose to sell health-related products from their offices must take steps to minimize their financial conflicts of interest. The following guidelines apply:

(a) In general, physicians should limit sales to products that serve the immediate and pressing needs of their patients. For example, if traveling to the closest pharmacy would in some way jeopardize the welfare of the patient (eg, forcing a patient with a broken leg to travel to a local pharmacy for crutches), then it may be appropriate to provide the product from the physician’s office. These conditions are explained in more detail in the Council’s Opinion 8.06, "Prescribing and Dispensing Drugs and Devices," and are analogous to situations that constitute exceptions to the permissibility of self-referral.

(b) Physicians may distribute other health-related products to their patients free of charge or at cost, in order to make useful products readily available to their patients. When health-related products are offered free or at cost, it helps to ensure removal of the elements of personal gain and financial conflicts of interest that may interfere, or appear to interfere, with the physician’s independent medical judgment.

(3) Physicians must disclose fully the nature of their financial arrangement with a manufacturer or supplier to sell health-related products. Disclosure includes informing patients of financial interests as well as about the availability of the product or other equivalent products elsewhere. Disclosure can be accomplished through face-to-face communication or by posting an easily understandable written notification in a prominent location that is accessible by all patients in the office. In addition, physicians should, upon request, provide patients with understandable literature that relies on scientific standards in addressing the risks, benefits, and limits of knowledge regarding the health-related product.

(4) Physicians should not participate in exclusive distributorships of health-related products which are available only through physicians’ offices. Physicians should encourage manufacturers to make products of established benefit more fairly and more widely accessible to patients than exclusive distribution mechanisms allow.


If you are selling products, I recommend you review the above referenced opinions (and opinions referenced within those opinions) in greater detail, and/or contact our office for a review to ensure compliance. 

K&K associate Erica Youngerman, Esq. assisted in the preparation of this newsletter.

Copyright © 2012 by Kirschenbaum & Kirschenbaum, P.C.

All Rights Reserved. This email is provided for news and information purposes only and does not constitute legal advice or an invitation to an attorney-client relationship. While every effort has been made to ensure the accuracy of the information contained herein, Kirschenbaum & Kirschenbaum PC does not guarantee such accuracy and cannot be held liable for any errors in, any reliance upon this, or losses caused by the information. Under New York’s Code of Professional Responsibility, this material may constitute attorney advertising. Prior results do not guarantee a similar outcome.


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