The U.S. Department of Health and Human Services Office of Inspector General (OIG) earlier this month issued a fraud alert targeting speaker programs hosted by pharmaceutical and medical device companies.
The watchdog agency’s alert points to fraud and abuse risks associated with the payment, solicitation or receipt of renumeration relating to these programs. These programs pay healthcare providers to educate others in the medical community about a company’s drugs or medical devices. However, as we have seen over the years, these programs have given rise to violations of the federal Anti-Kickback Statute (AKS) and False Claims Act (FCA) if they are used to incentivize providers to prescribe.
Both the OIG, as well as the U.S. Department of Justice, have investigated numerous fraud cases associated with these speaker programs. For example, in December 2019, Teva Pharmaceuticals settled a whistleblower lawsuit for $54 million. It was brought by two former sales reps who alleged that Teva paid speaker fees to neurologists for participation in “sham” speaker programs in exchange for their prescribing a drug for multiple sclerosis.
Another example: Pharma giant Novartis, which in July of this year agreed to pay more than $591 million to resolve FCA claims that it paid kickbacks to doctors to induce them to prescribe a number of its drugs. It was alleged that Novartis hosted tens of thousands of speaker programs and related events under the guise of providing educational content, when in fact the events served as a way to pay doctors in exchange for prescribing their drugs.
The AKS makes it a criminal offense to knowingly and willfully solicit, receive, offer, or pay any remuneration to induce or reward, among other things, referrals for, or orders of, items or services reimbursable by a federal healthcare program. Violation of the statute is a felony punishable by a maximum fine of $100,000, imprisonment up to 10 years, or both. Criminal conviction will also lead to mandatory exclusion from federal healthcare programs.
While companies that sponsor these programs argue that they are designed to inform and educate other healthcare professionals about the benefits of a drug or medical device, OIG said it is “skeptical about the educational value of such programs.”
“Our investigations have revealed that, often, [healthcare professionals] 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. Such cases strongly suggest that one purpose of the remuneration to the HCP speaker and attendees is to induce or reward referrals. Furthermore, studies have shown that HCPs who receive remuneration from a company are more likely to prescribe or order that company’s products,” OIG noted in the alert.
OIG points out that there are numerous other ways that providers can obtain information about a drug or device without the risk of violating the AKS or FCA.
OIG offered some characteristics, which, taken separately or together, potentially indicate a speaker program arrangement that could violate the Anti-Kickback Statute:
- The company sponsors speaker programs where little or no substantive information is actually presented.
- Alcohol is available or a meal exceeding modest value is provided to the attendees of the program (the concern is heightened when the alcohol is free).
- The program is held at a location that is not conducive to the exchange of educational information (e.g., restaurants or entertainment or sports venues).
- The company sponsors 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.
- There has been a significant period of time with no new medical or scientific information nor a new FDA-approved or cleared indication for the product.
- HCPs attend programs on the same or substantially the same topics more than once (as either a repeat attendee or as an attendee after being a speaker on the same or substantially the same topic).
- Attendees include individuals who don’t have a legitimate business reason to attend the program, including, for example, friends, significant others, or family members of the speaker or HCP attendee; employees or medical professionals who are members of the speaker’s own medical practice; staff of facilities for which the speaker is a medical director; and other individuals with no use for the information.
- The company’s sales or marketing business units influence the selection of speakers or the company selects HCP speakers or attendees based on past or expected revenue that the speakers or attendees have or will generate by prescribing or ordering the company’s product(s) (e.g., a return on investment analysis is considered in identifying participants).
- The company pays HCP speakers more than fair market value for the speaking service or pays compensation that takes into account the volume or value of past business generated or potential future business generated by the HCPs.
While the pandemic has reduced the number of in-person speaker programs, there are still inherent risks when a company offers payment to a healthcare professional who generates business for the company. OIG urged companies considering the creation of a speaker program arrangement that involves renumeration to request an Advisory Opinion.
The Advisory Opinion process is very specific and must be in writing. The Health Law Offices of Anthony C. Vitale can assist you with seeking an Advisory Opinion. Should you become the target of an investigation, our team will aggressively defend you. For more information, give us a call at 305-358-4500 or email [email protected]