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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 104033
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Hi! I am a licensed and practicing pediatrician in Michigan.

Resolved Question:

I am a licensed and practicing pediatrician in Michigan. I have some ideas about starting an online business distributing alternative remedies like homeopathic, Ayurvedic, and Chinese remedies. These would be specifically geared towards children and would be branded under my name. Note that I would not be distributing Allopathic or over the counter drugs. I will also not be providing advice on medical conditions online. The online business will be an LLC. I have the following questions:
1. Is there restriction on doctors setting up businesses other than their own practice?
2. Can I sell my own brand of remedies that would not require prescription?
3. If there is a restriction, what alternatives do I have?
4. I may sell them in my office; however, I would not force the patients to buy them, giving them choices like a local Natural Health store or a Wholefoods store...

Thanks in advance.
Submitted: 4 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 4 years ago.
No there is no restriction from a doctor having their own business outside of their own practice as long as they are not referring patients to their business and receiving compensation, which would be prohibited by the Stark Laws. However, having holistic products for sale under the doctor's name as long as the doctor is not prescribing them to patients.

The AMA Council on Ethical and Judicial Affairs in Sale of non health-related goods from physicians' offices. JAMA. 1998;280:563. Opinion 8.063.:

In-office sale of health-related products by physicians presents a financial conflict of interest, risks placing undue pressure on the patient, and threatens to erode patient trust and the primary obligation of physicians to serve the interest of their patients before their own. When these items offer some health-related benefits the physician's influence over the sale is amplified and makes it even more necessary to place limits on such activities.

1. Physicians who do sell health related products from their offices should not sell any health-related good whose claims of benefit lack scientific validity. Physicians should rely on peer-reviewed literature and other unbiased scientific sources that review evidence in a sound, systematic fashion when judging the efficaciousness of the product.

2. Physicians who sell health-related products from their offices should follow these guidelines to limit their conflicts of interest minimize the risk of brand endorsement, and ensure a focus on benefits to patients.

a). Physicians may distribute health-related products to their patients free of charge or at cost, in order to make useful products readily available to their patients. When health-related products are offered free or at cost, it removes the elements of personal gain and financial conflicts of interest that may interfere, or appear to interfere, with the physician's independent medical judgment.

b). Except under certain circumstances, such as those described in Opinion 8.032, “Conflict of Interest: Physician Ownership of Medical Facilities,” physicians should not sell a health-related good when patients can obtain a product that offers the same medical benefit at a local pharmacy or health-products store.

3. Physicians should not participate in exclusive distributorship of health-related products, in which the products are available only through physicians' offices and for which product there is no comparable alternative available at a local pharmacy or health-products store. Physicians should manufacturers to make their products more widely accessible to patients.

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Customer: replied 4 years ago.
Thank you for your answer. It was very helpful. If I do proceed with my own business of manufacturing and selling holistic medication within GMP guidelines, Will the brand carrying my name be more of a liability than a business which is not branded as "Dr Jon Doe" Secondly, Will the brand be more likely to be sued because of having a "doctor" name implying I have approved it even if the labeling has the FDA requirements for holistic medicationss. Are there any precedents. If so,may I have references?

The point 2 b describes 8.032. what is that exception?
Expert:  Law Educator, Esq. replied 4 years ago.
No, using your name on a product is not really any greater liability than not using your name. See: Opinion 8.032 and it pretty much explains the Stark Act regarding doctors referring patients to other business that the doctor has a financial interest in.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 104033
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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