Kickbacks and Fraud: Renewed Scrutiny of Health Care Speaker Programs

The Alert targets company-sponsored speaker programs where a health care professional gives a presentation to other health care professionals about a drug or medical device on behalf of the company. Under these speaker arrangements, the company pays the speaker an honorarium and typically provides some benefit to the attendees, like free meals and drinks. Many life sciences companies view these programs as vital elements of their sales and marketing strategy — educating health care professionals about the utility or new developments of a product and staying ahead of the competition.

But the OIG remains “skeptical about the educational value of such programs,” noting that health care professionals with power over purchasing or prescribing decisions may be induced improperly by the speaker remuneration or benefits afforded to attendees, particularly if the same professionals are repeatedly receiving these benefits over the course of a year.

Ultimately, these risks implicate the anti-kickback statute, which makes it a criminal offense to knowingly and willfully solicit, receive, offer, or pay any remuneration to induce referrals for products reimbursable by a federal health care program.¹ The Alert warns that speaker programs could face increased scrutiny, with potential criminal liability for the companies and health care professionals involved.² Beyond the anti-kickback statute, speaker programs could also implicate the Foreign Corrupt Practices Act or other global anti-corruption laws if the health care professionals are considered “foreign officials.”³

Red Flags and Increased Scrutiny

The OIG recognizes that the lawfulness (under the anti-kickback statute) of remunerative speaker arrangements depends on the facts, circumstances, and intent of the parties — much like other forms of travel and entertainment that companies consider bona fide and reasonable in the demonstration of their productions or the promotion of their businesses. But intent may be evidenced by a program’s characteristics and the conduct of the parties involved. The Alert lists several characteristics derived from past investigations and enforcement actions by the OIG as examples of programs that violate applicable laws:⁴

• selecting high-prescribing health care professionals as speakers and rewarding them with lucrative deals (e.g., hundreds of thousands of dollars for speaking);
• conditioning speaker compensation on past or future revenue from the product;
• holding speaker programs at entertainment venues (e.g., wineries, sports stadiums, and golf clubs) that are not conducive to an educational lecture or presentation;
• serving expensive meals and providing expensive alcohol, especially if free; and
• inviting friends, significant others, and family members of health care professionals who lack a legitimate business reason to attend the program.

In addition to the examples from past investigations, the Alert lists other “suspect characteristics” that could bring increased scrutiny:

• little or no substantive information presented in the program;
• the company sponsors a large number of programs on the same topic, especially without recent substantive developments on that topic;
• repeat attendees or speakers at programs on the same topic; and
• the company’s sales or marketing teams influence the selection of speakers.

Planning a Compliant Speaker Program

Many practical tips for avoiding scrutiny and potential liability under the anti-kickback statute follow naturally from the red flags listed above. But the primary guidance for companies sponsoring speaker programs is to emphasize the educational, medical, and scientific elements of the programs, while downplaying the entertainment and marketing features.

Venue Selection. Companies should select venues conducive to training and education — consistent with the OIG’s Alert — while recognizing the practical reality that if the program does not offer relevant substantive information in an interesting or exclusive venue, it may not draw attendees.

Speaker Selection. When choosing a speaker, companies should focus on the speaker’s qualifications, experience, and other relevant criteria that demonstrate the speaker’s authority on the topic (e.g., practice specialty and relevant publications authored). Physicians or research and development personnel should play a larger role than marketing teams in selecting speakers and creating the program’s content. Avoid past high-volume prescriptions as the driver of speaker or attendee selection.

Speaker Compensation. Companies should ensure that speaker compensation represents fair market value. The agreements should avoid extravagant rates and any implication that rates are tied to business generation, whether past or future. Paying for the professional’s time at his or her standard rate may be an effective measure in many locations.

Educational Value. Stale programs should be avoided. Absent recent developments in a company’s drug or device utility or a new promotional campaign for an old product, it may be unlikely that a speaker program provides meaningful informative value to attendees. Such a program may be scrutinized more closely if the substance is stale and the venue is considered extravagant.

Compliance Risk. Legal or compliance departments should approve speaker programs that meet certain “red flag” criteria (e.g., high cost, attendees who are government officials, entertainment venues or expensive restaurants). Companies should maintain clear policies, procedures, and training materials to ensure that the personnel responsible for planning speaker programs are aware of the risks and controls and obtain pre-approvals for the programs.

Documentation. For every speaker program, companies should maintain records that reflect the substantive and legitimate objectives of the program, the attendees, and the length of the educational portion of the program. Records can include meeting notes, written speeches, presentation slides, and comparisons of the merits of potential speakers. By documenting the planning and decision-making process behind a speaker program, including the selection of attendees, companies can ensure the program’s objectivity and stay on top of the risk factors surrounding such events.

Going Forward

The Alert emphasizes that there are many other ways for health care professionals to obtain information about drug and device products that do not involve remuneration to those professionals (e.g., online resources, product packaging, third-party educational conferences, and medical journals). According to the OIG, these non-remunerative alternatives cast doubt on the legitimacy of speaker programs.

But in-person programs are likely to remain popular events in the industry, particularly as society emerges from the pandemic era and can once again gather in groups. Given that speaker programs are likely to continue, and even increase in the coming months, the Alert serves as a reminder for the industry to ensure that it maintains and implements robust controls over speaker programs, while frequently reevaluating the need for certain programs if alternatives prove equally valuable from an educational perspective.

View original article on Anti-Corruption Report (subscription required).

¹ See section 1128B(b)(1)–(2) of the Social Security Act; 42 U.S.C. § 1320a–7b(b)(1)–(2). Rewards for past purchasing or prescribing behavior are also prohibited.

² This is not the OIG’s first warning regarding kickbacks by drug and device companies. See Notice, OIG Compliance Program Guidance for Pharmaceutical Manufacturers, 68 Fed. Reg. 23,731 (May 5, 2003), available at https://oig.hhs.gov/authorities/docs/03/050503FRCPGPharmac.pdf. The Alert notes that the 2003 guidance was not limited to pharmaceutical manufacturers and may apply to other products like “medical devices and infant nutritional products.” Id. at 23,742, n.5.

³ See 15 U.S.C. § 78dd–1. For additional background, Anti-Corruption Report subscribers can read more here.

⁴ Other reliable sources of red flags are the corporate integrity agreements annexed to many settlement agreements entered into by pharmaceutical companies as part of their resolutions with the DOJ and SEC.