Brand name drugs cost a lot. So to make them more attractive, drug manufacturers issue coupons for discounts on the copayment portion of the price. They work the same as the dollar-off coupons offered by cereal manufacturers.

There’s one big difference, though. If a senior citizen uses a coupon for Rice Krispies, Kellogg’s doesn’t have to worry about the law. But if a senior citizen uses a copayment coupon to fill a prescription, the result could be criminal liability—assuming he’s on Medicare.

How can that be? It’s because the Anti-Kickback Statute (AKS) makes it a felony to pay or receive (or offer or solicit) anything of value to encourage someone to use goods or services paid for by Medicare. Clearly, a copayment coupon is intended to encourage someone to buy a drug. That’s its whole point. So if Medicare pays for the drug, then bingo, the AKS has been violated.

That’s the message in a Special Advisory Bulletin issued last Friday by the Office of Inspector General (OIG) of Health & Human Services.  It warns drug manufacturers that they’re not doing enough to assure that their coupons aren’t used for drugs paid for by Medicare.  And, the report says, if they don’t shape up, they could be liable under both the AKS and the False Claims Act (FCA).  (When an AKS violation results in a Medicare bill, the bill is a false claim.)

But the OIG doesn’t limit its criticism to the drug manufacturers.  It also says that CMS needs to do more to address the issue.  It encourages CMS to work with manufacturers to solve the problem.