Kickbacks

OIG Issues Fraud Alert on Pharmaceutical Company In-Person Speaker Programs

Before the pandemic put the chill on live conference events, it was fairly common for pharmaceutical companies, device makers and diagnostics companies to offer healthcare professionals fees for in-person speaking appearances. Such practices raise red flags under the federal Anti-Kickback Statute (AKS) when those speakers recommend the products of those companies to their patients. So, on Nov. 16, the OIG issued a Special Fraud Alert warning companies about restarting in-person paid healthcare professional speaker programs when COVID-19 restrictions lift.

OIG Skepticism of Speaker Fees Program

Federal government suspicion of paid speaker programs, especially by pharmaceutical companies, is nothing new. For example, Novartis recently agreed to pay $678 million to settle a seven-year-long legal battle with the OIG over allegations of using its speaker programs as a way to disguise bribes to doctors from 2002 to 2011. As part of the deal, Novartis agreed to cut back its future speaker programs.

Salix Pharmaceuticals also ran afoul of the OIG and settled a civil fraud lawsuit settlement for $54 million in 2016, under which it had to admit that it paid doctors as speakers for programs that were mostly social events where little or no time was spent discussing drugs.

So, Why Now?

While the OIG’s AKS concerns over company payments is nothing new, as the agency acknowledges, the timing of issuing a Fraud Alert about the issue in the middle of a pandemic when no such events are being held is rather curious. “We are issuing this Fraud Alert [now],” the OIG explains, to give companies the opportunity to use this time to “assess the need for in-person programs given the risks associated with offering or paying related remuneration.”

The OIG specifically called out pharmaceutical industry trade group PhRMA, saying it was “skeptical about the educational value” of programs such as those outlined in PhRMA guidelines for healthcare professionals. The OIG pointed to its own investigations that reveal these professionals often “receive generous compensation to speak at programs offered under circumstances that are not conducive to learning or to speak to audience members who have no legitimate reason to attend.”

Of course, the warning is also targeted to the healthcare professionals (HCPs) on the receiving end of these fees, with the Fraud Alert asking HCPs to “consider the risks of soliciting or receiving remuneration related to speaker programs given other available means to gather information relevant to providing appropriate treatment for patients.”

The Kickback Red Flags

In the Fraud Alert, OIG states that it’s “skeptical about the educational value of such programs.” It then cites examples of troublesome practices, including:

  • Selecting high-prescribing HCPs as speakers and rewarding them with lucrative speaker deals;
  • Conditioning speaker remuneration on sales targets, such as requiring speaker HCPs to write a minimum number of prescriptions;
  • Holding speaker programs at entertainment venues or during recreational events or otherwise in a manner not conducive to an educational presentation, such as wineries, sports stadiums, fishing trips, golf clubs, and adult entertainment facilities;
  • Holding programs at high-end restaurants where expensive meals and alcohol are served;
  • Inviting HCP attendees who previously attended the same program; and
  • Inviting friends, significant others, and family members of the HCP who do not have a legitimate business reason to attend the program.

OIG further warns that all parties who participate in speaker programs are subject to scrutiny. This includes pharmaceutical and medical device companies that offer or pay remuneration to HCP speakers and provide free meals to program attendees, as well as HCP speakers who receive honoraria payments and HCP attendees who receive free meals at speaker programs.

Evidence of Intent

The Fraud Alert lists factors it uses to determine whether a speaker’s fee arrangement is legitimate or evident of an intent to violate the AKS. The latter include:

  • Speaker programs with little or no substantive information actually presented;
  • Availability of alcohol;
  • Meals exceeding modest value provided to program attendees;
  • Programs held at locations that aren’t conducive to the exchange of educational information, including restaurants or entertainment or sports venues;
  • Sponsoring a large number of programs on the same or substantially the same topic or product, especially in situations involving no recent substantive change in relevant information;
  • Significant passage of time with no new medical or scientific information nor a new FDA-approved or cleared indication for the product;
  • Repeat attendance by HCPs on the same or substantially the same topics or being an attendee after being a speaker on substantially the same topic;
  • Attendees who don’t have a legitimate business reason to attend the program;
  • Influence of commercial employees over the selection of speakers or attendees based on past or expected revenue the speakers or attendees have or will generate by prescribing or ordering the company’s products; and
  • HCP speakers paid more than fair market value for the speaking service or compensation takes into account the volume or value of past or potential future business generated by the HCP.

 

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