On Nov. 16, 2020, the Department of Health and Human Services Office of the Inspector General (OIG) issued a Special Fraud Alert related to speaker programs sponsored by pharmaceutical and medical device companies. All such companies, as well as physicians and other health care professionals (HCPs), should take note of OIG’s renewed focus in this area.

The new Special Fraud Alert highlights 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. “Speaker programs” are generally defined as company-sponsored events at which an HCP makes a speech or presentation on behalf of the sponsor to other HCPs about a product or a disease state. The company generally pays the speaker an honorarium, and often provides free meals to the attendees. According to the Centers for Medicare & Medicaid Services’ Open Payments website, which tracks payments made to HCPs, drug and device companies have reported paying nearly $2 billion to HCPs for speaker-related services in the last three years.

The Special Fraud Alert emphasizes that OIG believes many speaker programs violate the federal anti-kickback statute. The anti-kickback statute makes it a felony 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. Violation of the statute is a felony punishable by a maximum fine of $100,000, imprisonment up to 10 years, or both. A criminal conviction will also lead to mandatory exclusion from federal health care programs, including Medicare and Medicaid. The offer, payment, solicitation, or receipt of “remuneration” includes the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind. By its terms, the statute ascribes criminal liability to all parties to an impermissible “kickback” transaction (i.e., those who solicit or receive prohibited remuneration as well as those who offer or pay the prohibited remuneration).

Speaker programs typically involve an HCP who is not an employee of the company speaking in person to other HCPs about a company product or disease state using a presentation developed and approved by the company. Drug and device companies sponsor speaker programs to help educate and inform HCPs about the benefits, risks, and appropriate uses of company products. However, numerous investigations have involved allegations that drug and device companies organize and pay for speaker programs with the intent to induce HCPs to prescribe or order — or recommend the prescription or ordering of — products.

In the Special Fraud Alert, OIG states that it, “is skeptical about the educational value of such programs.” OIG believes that, often, 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. Such cases strongly suggest that one purpose of the remuneration to the HCP speaker and attendees is to induce or reward referrals. OIG also cites studies that indicate that HCPs who receive remuneration from a company are more likely to prescribe or order that company’s products. This remuneration, in OIG’s view, may skew clinical decision making in favor of the HCP’s own and the sponsor’s financial interests, rather than the patient’s best interests.

The Special Fraud Alert states that parties involved in speaker programs may be subject to increased scrutiny. This includes program sponsors, paid speakers, and any attendees who receives “remuneration” — including free food and drink. This position is in keeping with concerns OIG has expressed for many years over the practice of drug and device companies providing anything of value to HCPs in a position to make or influence referrals to such companies’ products, and that such arrangements may implicate the anti-kickback statute both for the companies involved and the speakers.

The Special Fraud Alert contains a non-exhaustive list of what OIG refers to as “suspect characteristics” which, taken separately or together, potentially indicate a speaker program arrangement 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); and
  • 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.

OIG notes that while the pandemic emergency has resulted in the curtailment of many in-person activities, 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. The issuance of this Special Fraud Alert indicates that speaker programs may be a special enforcement focus in the coming months. Companies should assess the need for in-person programs given the risks associated with offering or paying related remuneration and consider alternative less-risky means for conveying information to HCPs. HCPs should likewise consider the risks of soliciting or receiving remuneration related to speaker programs.