On November 16, 2020, the Office of Inspector General (“OIG”) released a Special Fraud Alert to call attention to fraud and abuse risks associated with the offer, payment, solicitation, or receipt of payment related to speaker programs provided by pharmaceutical and medical device companies. While clinical education from a provider can be beneficial, companies and physicians must be cautious to avoid violating certain regulatory requirements, including the anti-kickback statute (“AKS”), when administering speaker programs. If companies are offering speakers more than fair market value or incentivizing them to sell more product, it could violate the AKS. The OIG 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 the company.”
As part of the Physician Payments Sunshine Act, companies are required to report annual data on payment and transfers of value made to physicians or teaching hospitals to the Centers of Medicare and Medicaid Services (“CMS”) Open Payments disclosure program. The act was created in 2010 to increase transparency around financial transactions between physicians and applicable manufacturers of drugs, medical devices, and biologics. All data is public and easily accessible through CMS’ website. In 2019, approximately 11 million records were published totaling $10.03 billion paid to approximately 615,000 physicians and 1,196 teaching hospitals.
The large sums paid to physicians for participation in speaker programs, in particular, caught the attention of the OIG. Specifically, drug and device companies have reported paying nearly $2 billion to physicians for speaker programs (i.e., serving as faculty or as a speaker at a venue other than a continuing education program) over the last three reportable years combined. Remuneration opportunities under particular scrutiny include, but are not limited to, speaker compensation amounts, speaker prescribing patterns, the number of times a speaker presents on behalf of a company, and audience selection and attendance (i.e., the presentation is given to individuals who have already been exposed to the information or have no business use for the product). The OIG determined physicians often receive generous compensation to speak at programs offered under circumstances that are not conducive to learning or speak to audience members who have no legitimate reason to attend. The OIG is concerned that these situations may alter a physician’s clinical decision-making skills in favor of the drug or device company, instead of focusing on the patient’s best interest, possibly implicating an AKS violation.
If either party knowingly and willfully offers or accepts remuneration for speaker programs without a legitimate and supportable business interest, both the physician and the company may be subject to criminal, civil, and administrative repercussions. These repercussions usually come with hefty price tags. For example:
- In mid-2020, Novartis, a pharmaceutical company based in New Jersey, agreed to pay approximately $591 million to resolve claims for allegedly hosting tens of thousands of speaker programs at expensive restaurants where Novartis drugs were hardly discussed, and that the honoraria paid were in fact intended to induce physicians to prescribe several of the company’s drugs.
- In 2019, opioid manufacturer Insys Therapeutics agreed to pay approximately $195 million to settle allegations of violating the False Claims Act in connection with kickbacks and illegal marketing practices for their drug Subsys, an opioid painkiller approved for adult cancer patients. The lawsuit claimed Insys provided payment for “sham” speaker programs, in addition to “lavish” meals and entertainment, to encourage providers to prescribe Subsys, even for patients without cancer. In fact, the OIG cites an instance where remuneration from Insys for speaker program participation was specifically correlated to a physician assistant’s prescribing patterns post-participation.
- Also in 2019, Avanir, a pharmaceutical manufacturer based in California, agreed to pay approximately $96 million to resolve allegations it paid physicians and other HCPs to encourage them to write prescriptions for Nuedexta. One form of payment was through speaker programs, which were purported to be primarily social in nature and lacking educational value. Further, the speaker was allegedly selected based on his or her willingness to prescribe Nuedexta.
- In 2016, Salix Pharmaceuticals, a specialty pharmaceutical company based in North Carolina, agreed to pay approximately $54 million for allegedly hosting thousands of extravagant dinners at high-end restaurants, disguising the social gatherings as speaker programs. In reality, there was little to no discussion of the product and the honoraria paid were in fact intended to induce physicians to write prescriptions.
Due to the impacts of the COVID-19 pandemic, most speaker programs hosted by pharmaceutical and medical device companies have transitioned to, and will continue to occur virtually; however, the same compliance laws apply. Therefore, it is imperative now and moving forward, that all parties work together to ensure speaker programs are effective and compliant.
To assist organizations with identifying potentially troublesome speaker program arrangements, the OIG included a list of “suspect characteristics” in the fraud alert. The list includes examples such as a company pays an HCP speaker more than fair market value for the speaking service or pays compensation that considers the volume or value of past or future business generated. Another example speaks to the commercial reasonableness of an arrangement, specifying that a company that sponsors a large number of programs on the same or substantially the same topic or product where no recent substantive change in relevant information has occurred, may be problematic.
In an effort to help determine any potential compliance risks with arrangements you are a party to, or your organization has with HCPs, PYA’s CMS Open Payment Registry Review Checklist has been updated to help address the OIG’s identified concerns. For further information, contact a PYA executive at (800) 270-9629.