TORONTO – A major producer of medical marijuana says doctors and specialized clinics are receiving kickbacks from some licensed pot producers in exchange for sending them patients, a practice the company calls unethical and a violation of professional medical standards.
Greg Engel, CEO of Nanaimo, B.C.-based Tilray, said his company recently resigned from the Canadian Medical Cannabis Industry Association (CMCIA) after unsuccessfully pushing for the organization to adopt a code of ethics that would outlaw the practice.
The dozen members of the CMCIA were unwilling to sanction such a code because “many were currently participating” in such kickback schemes, he said. Tilray is starting a new industry group, the Canadian Medical Cannabis Council, which will insist on strict adherence to ethical conduct.
In a statement from the CMCIA, executive director Neil Belot said the organization agrees on the need for a high level of ethical conduct among producers, but more agreement had not been reached on the wording of such a code.
The CMCIA said Tilray’s proposal was not accepted by its board because it could “have had the inadvertent effect of prohibiting members from conducting meaningful research and data collection initiatives,” for which they receive specific compensation from doctors and clinics.
The group’s lawyers also advised the board to exercise caution in developing guidelines, due to potential risks associated with Canadian competition law.
“Tilray resigned from the association before the matter was fully discussed or resolved,” Belot said. “Instead of continuing to work together on an important issue, Tilray chose to exit the association.”
Engel said his company has never and will never compensate a physician for a referral or for writing a prescription for medical cannabis.
Yet the company provided copies of invoices it had received from two doctors, three clinics and two patient aggregator groups that work with health practitioners. The unsolicited bills seek direct payment, most for $50 each, or a percentage of cannabis sales.
“Even though we don’t have agreements in place with any physicians, they’ve actually submitted invoices to us for payment,” Engel said from Nanaimo.
“Some of these clinics are also asking for fees, anywhere from $150 to $400, for a patient referral to the licensed producer,” he said of the practice that’s begun permeating the fledgling industry.
“And then there are a number of patient aggregator groups that are looking to either payments or a percentage of sales for referring patients to them.”
A number of provincial colleges of physicians and surgeons that regulate doctors’ conduct — including those in Ontario and B.C. — have strict rules prohibiting the acceptance of any fee from pharmaceutical companies or licensed cannabis producers linked to the writing of prescriptions.
Kathryn Clarke, a spokeswoman for the Ontario college, said the regulatory body has a policy that’s specific to medical marijuana, which was recently updated to reflect changes made in April 2014 to federal regulations governing medicinal cannabis.
Under the new rules, a doctor provides a document — in effect, a prescription — which allows a patient to purchase a certain amount of cannabis from a licensed producer of their choice.
“The policy sets out the expectations of physicians when they’re contemplating prescribing medical marijuana, and the college has taken the position that completing the medical document is akin to writing a prescription, and as such physicians are not permitted to charge a fee for doing so,” Clarke said Tuesday.
As well, under the Ontario Medicine Act’s conflict of interest rules, doctors are prohibited from receiving any benefit for referring patients.
A doctor who contravenes the college policy or provincial legislation by taking a kickback could be investigated by the college and potentially referred for discipline, she said.
“No one has been prosecuted for this type of conduct to date, but we would certainly investigate if we were to receive information to suggest a physician or physicians were participating in this kind of conduct.”
Health Canada said it is concerned about reports that some physicians and patient aggregator groups may be charging fees as a part of the process for registering new patients seeking to access marijuana for medical purposes.
“We are actively looking into this issue to determine if any LPs (licensed producers) are involved in situations where there may be a conflict of interest,” the federal department said by email.
“We would encourage anyone who is aware of these practices to contact … provincial regulatory bodies and make a formal complaint.”
Engel said Tilray has lost a number of patients who had been purchasing its cannabis products for the last year after they were told that their doctors would not renew their prescription document with his company but would “have to go to company X.”
“So this is the case where a specific producer of medical cannabis is being chosen over another company because of a payment that has exchanged hands, either a fee directly to the physician or indirectly through a clinic or patient aggregator group,” he said.
Engel believes that’s not how Health Canada envisioned the process when it changed its regulations, which left patients free to choose the producer and certain marijuana strains that would work best to alleviate pain and other symptoms related to their specific health conditions.
“But that is not the case that we’re seeing with many of these groups that are asking for kickbacks. So they’re actually restricting patients from making the choice themselves and they’re directing them only to certain licensed producers.”
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