OIG Issues Rare Special Fraud Alert Targeting Pharmaceutical and Medical Device Speaker Programs

The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) issued a Special Fraud Alert on fraud and abuse risks “associated with the offer, payment, solicitation, or receipt of remuneration relating to speaker programs by pharmaceutical and medical device companies.” The OIG generally defines speaker programs as company-sponsored events at which a physician or other health care professional (HCP) “makes a speech or presentation to other HCPs about a drug or device product or a disease state” on behalf of a manufacturer. The manufacturer generally pays the speaker HCP an honorarium, and often pays remuneration (e.g., free meals) to the attendees. The OIG notes that pharmaceutical and medical device manufacturers have reported paying nearly $2 billion to HCPs for speaker program-related services in the last three years.

The OIG has scrutinized speaker programs for decades and continues to hold the opinion that speaker programs have limited educational value. The OIG warns manufacturers that it believes many speaker programs violate the federal anti-kickback statute by inducing or rewarding referrals. The anti-kickback statute makes it a criminal offense to knowingly and willfully solicit, receive, offer, or pay any remuneration to induce or reward, as well as accept referrals for or orders of items or services reimbursable by a federal health care program. When remuneration is paid purposefully to induce or reward referrals of items or services payable by a federal health care program, the anti-kickback statute is violated. Violation of the statute is a felony punishable by a maximum fine of $100,000 and imprisonment up to 10 years, or both. Criminal conviction will also lead to mandatory exclusion from federal health care programs, including Medicare and Medicaid.

The Special Fraud Alert lists characteristics when “taken separately or together, potentially indicate a speaker program arrangement that could violate the anti-kickback statute.” The OIG notes that the following list of suspect characteristics is illustrative, not exhaustive, and “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
  • 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 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 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

The OIG Special Fraud Alert concludes by recognizing that many in-person speaker programs are presently curtailed due to the COVID-19 pandemic and states that “the risks associated with speaker programs will become more pronounced if companies resume in-person speaker programs or increase speaker program-related remuneration to HCPs.” Accordingly, manufacturers should assess the need for in-person programs as social distancing protocols are relaxed and consider alternative less-risky means for conveying information to HCPs.

If you need assistance understanding speaker programs or the OIG Special Fraud Alert, please contact me.

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