[PragmaticPulp]

I deplore the medication rebate racket as much as anyone, but it's not a kick-back.

A kick-back would go to the doctor or pharmacist for pushing the customer toward a medication. The problem in this scenario is the monetary incentive to mislead the customer.

With medication rebates, the customer is getting the drug one way or another. The rebate just discounts the effective price and sends the discount to the customer. The only party not aligned is the insurance companies (who, IMO, probably hate this system more than anyone)

[derefr]

> A kick-back would go to the doctor or pharmacist for pushing the customer toward a medication.

Why is it not a kick-back if the customer’s insurance company is the one being paid to push the customer toward a medication, via differential coverage/co-pays/etc?

[gruez]

AFAIK the illegal part of the kickback is when you're abusing your position to enrich yourself (the agent), when you have a duty to act in the best interests of the principal. You buying a widget, and then the manufacturer sending you a rebate (aka. a "kickback") isn't illegal because there's no conflict of interest. However, if you're in charge of buying widgets for a company, and the manufacturer is paying the rebate directly to you instead of the company[1], then it is illegal.

In the case of the drugs, it's fine because the person ultimately paying for the drugs is the insurance company, which also happens to be the entity receiving the "kickback".

[1] https://www.justice.gov/usao-ndca/pr/former-netflix-executiv...