On November 16, 2020, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a Special Fraud Alert addressing speaker programs presented by pharmaceutical and medical device companies. Such programs, at which companies may pay physicians or other health care professionals (HCPs) for speeches or presentations about drugs and devices in addition to providing remuneration to attendees, are frequently sponsored by pharmaceutical and device companies seeking to provide education regarding their products. Highlighting what it called "inherent fraud and abuse risks," OIG's Special Fraud Alert expressed concerns surrounding the offer or payment of remuneration from pharmaceutical and device companies to physicians or other HCPs associated with such programs.

In issuing the Special Fraud Alert, OIG referenced several fraud cases investigated and resolved in partnership with the Department of Justice (DOJ). These cases targeted companies and individual HCPs through civil and criminal cases alleging inappropriate offers or payment of remuneration. For example, OIG highlighted cases in which drug and device companies were alleged to have conditioned a speaker's payment on hitting certain sales targets such as a minimum number of prescriptions, rewarded high-prescribing HCPs through highly lucrative speaking arrangements and engaged in other inappropriate conduct. Noting that drug and device companies have reported spending nearly $2 billion in speaker-related payments in the past three years, OIG highlighted what it views as significant fraud and abuse risks in such arrangements.

Specifically, the Special Fraud Alert detailed OIG's concerns that remuneration paid or offered in connection with speaker programs could violate the federal Anti-Kickback Statute (AKS), which prohibits knowingly and willfully soliciting, receiving, offering or paying any remuneration in order to induce or reward referrals for items or services reimbursable under a federal health care program. As justification for these concerns, OIG expressed skepticism about the educational value of speaker programs. Alleging that HCPs are often highly compensated in exchange for programs "not conducive to learning," and that attendees to such programs could obtain similar information from resources that do not involve payment to HCPs, OIG suggested that one purpose of remuneration to HCP speakers and attendees is to induce or reward referrals.

The Special Fraud Alert cited previous publications through which OIG expressed similar concerns surrounding payment of remuneration to HCPs by drug and device companies, including the 2003 OIG Compliance Program Guidance for Pharmaceutical Manufacturers and the 2010 guidance to new physicians regarding avoiding Medicaid and Medicaid fraud and abuse.  Additionally, OIG indicated that parties involved in speaker programs "may be subject to increased scrutiny," and emphasized that companies and HCPs could face liability under the AKS for inappropriate payments in connection with such programs.

OIG stated that the intent of the Special Fraud Alert was not to "discourage meaningful HCP training and education," but instead to highlight the "inherent risks" of speaker programs.  Moreover, OIG recognized that the lawfulness of any particular arrangement depends on the specific facts and circumstances, including the intent of the parties involved. Noting that many in-person activities are currently suspended during the ongoing public health emergency, OIG indicated that associated risks could become more pronounced if such activities resume.

In line with OIG's advice, device and pharmaceutical companies should fully consider the risks associated with in-person speaker programs and remuneration paid to presenters and attendees. Although such events frequently provide meaningful opportunities for HCP education regarding the benefits and risks of certain drugs and devices, companies interested in sponsoring speaker programs should consider other possible avenues for providing such information that do not involve payments to HCPs. OIG rarely issues Special Fraud Alerts, and its decision to do so here, in conjunction with recent enforcement actions, is good cause for device and pharmaceutical companies to take note. 

For More Information

If you have any questions about this Alert, please contact Frederick R. Ball, Erin M. Duffy, Kristine Murphy Gallagher, any of the attorneys in our Life Sciences and Medical Technologies Industry Group

Originally Published by Duane Morris, November 2020

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