OIG Issues Special Fraud Alert on Remuneration Paid by Pharmaceutical and Medical Device Companies to Health Care Professional Speakers
On November 16, 2020, the Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services issued a Special Fraud Alert on the fraud and abuse risks “associated with the offer, payment, solicitation, or receipt of remuneration relating to speaker programs by pharmaceutical and medical device companies.” In the Special Fraud Alert, OIG defined speaker programs as generally meaning “company-sponsored events at which a physician or other health care professional … makes a speech or presentation to other [health care professionals] about a drug or device product or a disease state on behalf of the company.” The pharmaceutical or medical device company pays the speaker an honorarium and often provides other remuneration to the attendees as well (e.g., free meals).
As stated in the Special Fraud Alert, the OIG believes, based on its investigations and other data, that one purpose of the remuneration paid to health care professional speakers and attendees at certain pharmaceutical and medical device company-sponsored events is to induce or reward referrals. For example, some sponsored events are not conducive to learning (e.g., sponsored events held at wineries, golf courses and sports stadiums) calling into question the purpose of the event. In addition, OIG cited studies that show health care professionals who receive remuneration from a pharmaceutical or medical device company are more likely to prescribe or order that company’s products. The OIG urged pharmaceutical and medical companies to consider whether and under what circumstances to continue holding these sponsored events given the fraud and abuse risks associated with the events.
Potentially Problematic Company-Sponsored Events
The OIG listed in the Special Fraud Alert the following characteristics of a company-sponsored event that when “taken separately or together, potentially indicate a speaker program arrangement that could violate the anti-kickback statute.” Importantly, the characteristics listed below are illustrative and not exhaustive. The OIG noted that “the presence or absence of any one of these factors is not determinative of whether a particular arrangement would be suspect under 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;
- Health care professionals 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 health care professional 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 health care professional 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); and
- The company pays health care professional 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 health care professionals.
Takeaways for Pharmaceutical and Medical Device Companies
Given the Special Fraud Alert and OIG’s scrutiny of these types of events, a pharmaceutical or medical device company should:
- Analyze whether its sponsored events include any of the characteristics listed above and consider restructuring the event to the extent the event does include any of those questionable characteristics;
- Analyze whether any purpose of a company-sponsored event is to induce or reward referrals and consider not holding the event if one of the purposes of the event is to induce or reward referrals given that some courts have interpreted the Anti-Kickback Statute’s intent standard to mean the statue is violated if even one purpose of the remuneration is to induce referrals;
- Consider whether to forego holding company-sponsored events given the OIG’s concerns about and scrutiny over these events; and
- Consider alternative methods of providing information to health care professionals related to the company’s drug and/or device products other than hosting company-sponsored events.
Takeaways for Health Care Professionals
A health care professional who is asked by a pharmaceutical or medical device company to speak at or attend an event sponsored by that company in exchange for remuneration should:
- Evaluate whether one purpose of the remuneration is to induce or reward referrals and consider not agreeing to speak at or attend the event if one purpose of the remuneration is to induce or reward referrals given that some courts have interpreted the Anti-Kickback Statute’s intent standard to mean the statue is violated if even one purpose of the remuneration is to induce referrals; and
- Consider alternative methods of receiving information about drug and device products other than attending an event sponsored by a pharmaceutical or medical device company at which the company provides remuneration to the speakers and attendees, including, without limitation, the following:
- obtaining information about drug and device products using online resources;
- reviewing a drug’s or product’s package insert;
- attending third-party educational conferences; and
- reviewing articles published in medical journals with respect to drug and device products.