Accounting for Law

Corporate policies no defence to disciplinary proceedings

Health professionals can’t use their employers to shield themselves from regulatory action, Toronto health lawyer Lonny Rosen tells

The Toronto Star recently reported on the case of two pharmacists punished for professional misconduct related to an illegal rebate scheme, even as the company that implemented the policy escaped regulatory action.

Rosen, a partner with Rosen Sunshine LLP, says the case delivers a number of warnings to all pharmacists, physicians, dentists, nurses and other regulated professionals who are employed by or contract to companies.

“First, health professionals working for a corporation or for anyone else are accountable for compliance with the law or policies of their regulatory colleges. It is they who will face the consequences of any breach,” he says. “Second, corporations cannot shield professionals working for them from regulatory action, even if the action arises from a corporate policy.

“And third, following the policy of a corporate employer in contravention of the law or college policy will not excuse a health professional from regulatory proceedings,” Rosen adds.

According to the Star, a drug rep complained to Ontario’s College of Pharmacists and the provincial minister of health after recording a phone call in which he was warned he risked losing business if he failed to pay for the company’s marketing and advertising services, which included prominent placement in its magazine and clinic handouts.  

The rep alleged the services were repackaged “rebates,” the name given to the outlawed practice of kickbacks from drug companies to retailers to incentivize preference for their products over competitors. The Star notes the government takes the position that rebates artificially inflate prices for insurers and patients.    

Although the provincial government has not taken any action against the company, the college proceeded against two pharmacists in charge of the company’s pharmacies. Earlier this year, both admitted to professional misconduct related for soliciting more than $1 million from a drug company that could be regarded as a kickback, despite the company’s stated aim to reduce dispensing fees for its customers. The Star article notes one of the payments went to the pharmacists personally.  

“There was no evidence the pharmacists themselves were behind the advertising program, and while they believed it did not run afoul of the rebate requirements, the college took a different view,” Rosen says.

In addition to a $20,000 fine, the pharmacists were each held liable for $30,000 towards the costs of the disciplinary proceedings against them and agreed to have the college monitor their payments for 12 months.

“The costs are distinct from the fines and are not supposed to be punitive. Instead, they are intended to ensure that the rest of the profession does not bear all of the expense of the investigation and disciplinary procedure,” Rosen explains.

He says any health professional whose employer asks them to engage in conduct that they suspect may run afoul of their professional regulator should “retain a lawyer, rather than trusting an employer not to lead them astray.”


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