If an offer to a health care provider to speak at or attend a pharmaceutical or medical device company’s event seems too good to be true – it probably is, and it could lead to civil, criminal and federal administrative penalties.  

On November 16, 2020, the Office of Inspector General (OIG) issued a Special Fraud Alert relating to offers, payments, solicitation or receipt of remuneration for “speaker programs” sponsored by pharmaceutical and medical device companies. The OIG defines “speaker programs” as these companies’ “sponsored events at which a physician or other health care professional (collectively, HCP) makes a speech or presentation to other HCPs about a drug or device product or a disease state on behalf of such Companies.” The company pays the speaker HCP an honorarium, and often pays remuneration (for example, free meals) to the attendees. The OIG found that in the past three years, such companies “have reported paying nearly $2 billion to HCPs for speaker-related services.”

The OIG and the Department of Justice (DOJ) investigated and resolved multiple such cases involving violations of the anti-kickback statute. Notably, the government filed civil and criminal charges against both the HCP and the company. For these cases, the government alleged that drug and device companies:  

  • selected high-prescribing HCPs to be speakers and rewarded them with lucrative speaker deals (e.g., some HCPs received hundreds of thousands of dollars for speaking);
  • conditioned speaker remuneration on sales targets (e.g., required speaker HCPs to write a minimum number of prescriptions in order to receive the speaker honoraria);
  • held speaker programs at entertainment venues or during recreational events or otherwise in a manner not conducive to an educational presentation (e.g., wineries, sports stadiums, fishing trips, golf clubs, and adult entertainment facilities);
  • held programs at high-end restaurants where expensive meals and alcohol were served (e.g., in one case, the average food and alcohol cost per attendee was over $500); and
  • invited an audience of HCP attendees who had previously attended the same program or HCPs’ friends, significant others or family members who did not have a legitimate business reason to attend the program.

These cases implicated the federal anti-kickback statute (AKS), which 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 health care program.” When intent is present for the remuneration to induce or reward referrals of items or services payable by a federal health care program, the AKS is violated. 

The OIG is skeptical about these “speaking arrangements” for violations of the AKS because

“HCPs 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.” The OIG noted that such circumstances “strongly suggest that one purpose of the remuneration to the HCP speaker and attendees is to induce or reward referrals.” The OIG has also found that “HCPs who receive remuneration from a company are more likely to prescribe or order that company’s products,” which may most likely “skew” HCPs’ clinical decision-making that may not be in the patients’ best interests.

In this Special Fraud Alert, the OIG cautioned that it will closely scrutinize such arrangements and reminded HCPs that this is not a new policy change, as the OIG has previously expressed concerns relating to these arrangements. Whether a speaking arrangement will pass muster under the OIG’s lens will depend on the facts and circumstances of each case and intent of the parties. According to the OIG, such intent may be evidenced by the speaker program’s characteristics and the actual conduct of the parties involved. The OIG also provided certain “illustrative and not exhaustive indicators,” which “taken separately or together may potentially indicate” an arrangement that could violate the AKS. Those are:  

  • 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.

In conclusion, the OIG is again cautioning provider of its concerns about companies offering or paying remuneration (and HCPs soliciting or receiving remuneration) for speaker programs. If the circumstances are suspicious, as outlined above, and requisite intent to induce referrals is present, both the company and the HCP may be subject to civil, criminal and administrative enforcement actions. HCPs should also ensure that they do not violate any applicable state anti-kickback rules.  

We recommend our clients review and, if necessary, revise, their compliance programs and/or policies involving HCPs attending and receiving remuneration for speaker programs offered by these companies. Any such compensation should be carefully analyzed in light of this Special Alert, which can be found at https://oig.hhs.gov/fraud/docs/alertsandbulletins/2020/SpecialFraudAlertSpeakerPrograms.pdf. 

For any questions or assistance with arranging speaker programs in compliance with federal and state law, please contact Kathy Butler or Sanja Ord in Greensfelder’s Health Care group.