Washington Supreme Court upholds doctor's right to sell medication

Some attorneys say state anti-kickback laws may come up in the courts more often as the practice of medicine continues to change.

By Amy Lynn Sorrel, AMNews staff. Nov. 20, 2006.

Washington physicians say a state Supreme Court ruling rejecting a unique interpretation of anti-kickback law in a "fen-phen" diet drug case will preserve convenient access to a number of products for patients.

But lawyers in the case say doctors could see more lawsuits trying to use state anti-kickback laws against them.

The Washington high court found that the 1949 Washington anti-kickback statute was meant to forbid illegal referrals or "unearned" profits from a third party, but not to prevent doctors from making money off the goods that they provide directly to patients, whether medications or medical equipment.

Criminalizing such sales would "lead to absurd consequences," including making patients criminally liable for buying drugs from doctors if the physicians profited from it, Judge Tom Chambers wrote in the Oct. 12 opinion.

Doctors praised the court's decisions as a proper interpretation of the Legislature's intent in passing the statute. More than half a dozen medical groups filed friend-of-the-court briefs supporting the doctor in the case. They include the Washington State Medical Assn., the Washington State Hospital Assn. and the Washington Academy of Eye Physicians and Surgeons.

"The Supreme Court wisely saw this as an anti-kickback statute that has to do with referrals and is not meant to regulate the internal workings of a physician practice," said WSMA counsel Andrew K. Dolan.

AMA policy allows doctors to sell health-related products out of their offices with several stipulations aimed at preventing financial and ethical conflicts of interest.