Tag Archives: Kickbacks

Discounts, rebates and kickbacks

One of the purposes of this blog is to educate readers about basic issues in pharmacy business.  This post will discuss the differences between discounts, rebates, and kickbacks.  Warning – I am not a lawyer and this is not a legal opinion.  It’s a non-lawyer’s attempt to understand and explain some basic pharmacy business concepts.

A headline on the Wall Street Journal Health Blog from earlier this year announced that “AstraZeneca Pays $7.9M to Settle Kickback Charges Paid to a PBM”   The federal government alleged that AstraZeneca made illegal rebate payments to Medco in exchange for preferred formulary position for Nexium (a very popular drug prescribed for ulcers).

Pharmaceutical companies commonly provide rebates to PBMs and specialty pharmacies to increase use of their products, so why was the rebate in this situation a kickback? Continue reading