After a four-year investigation, the CRA says that pharmacies across Canada failed to report millions of dollars in benefits they received from drug companies
The Canada Revenue Agency has concluded a four-year investigation in which it assessed more than 1,000 pharmacists it says received unreported benefits they received from generic drug companies.
The companies gave pharmacists the benefits – such as gift cards, travel vouchers and prepaid credit cards – to influence them to substitute the generic product for the name brand when filling prescriptions, according to a Lexology report.
The investigation began when auditors found 15 pharmacies in Newfoundland and Labrador that had failed to report benefits, Lexology reported. Eventually, the investigation expanded across Canada. The CRA even obtained a Federal Court order to compel generic drug companies to disclose information about the incentives they offered pharmacists.
The CRA invited about 22,000 pharmacies to review their tax returns and report any previously unreported benefits. The pharmacies had the opportunity to avoid penalties if they voluntarily amended their returns and paid the tax and interest due, according to Lexology. Ultimately, the CRA said there was more than $58 million in unreported income.
No criminal charges have been brought, but financial penalties were assessed to those who didn’t voluntarily report their benefits, according to Lexology. The penalties and interest, in some cases, can surpass the original tax due.
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The companies gave pharmacists the benefits – such as gift cards, travel vouchers and prepaid credit cards – to influence them to substitute the generic product for the name brand when filling prescriptions, according to a Lexology report.
The investigation began when auditors found 15 pharmacies in Newfoundland and Labrador that had failed to report benefits, Lexology reported. Eventually, the investigation expanded across Canada. The CRA even obtained a Federal Court order to compel generic drug companies to disclose information about the incentives they offered pharmacists.
The CRA invited about 22,000 pharmacies to review their tax returns and report any previously unreported benefits. The pharmacies had the opportunity to avoid penalties if they voluntarily amended their returns and paid the tax and interest due, according to Lexology. Ultimately, the CRA said there was more than $58 million in unreported income.
No criminal charges have been brought, but financial penalties were assessed to those who didn’t voluntarily report their benefits, according to Lexology. The penalties and interest, in some cases, can surpass the original tax due.
Related stories:
Order of pharmacists calls for emergency suspension as member faces drug fraud charges
Doctor fired after accessing female patients’ records
