HHS-OIG Special Fraud Alert Addresses Speaker Program Suspect Factors

In a Special Fraud Alert¹ published on November 16, the Department of Health and Human Services, Office of Inspector General (HHS-OIG) cautions pharmaceutical and medical device companies against conducting speaker programs² given the “inherent risks” it believes to be associated with these activities. Noting that there have been numerous enforcement actions that have been brought by the Department of Justice against manufacturers under the Anti-Kickback Statute (AKS) and False Claims Act related to speaker program arrangements, as well as Sunshine Act payment records reflecting significant payments for such programs in recent years, HHS-OIG is encouraging companies to assess the need for re-starting in-person speaker programs that have been paused during the COVID-19 pandemic. In doing so, HHS-OIG lays out the “suspect” characteristics of a speaker program that may provoke an enforcement action, if coupled with the requisite intent to violate the AKS:

• No Substantive Content Presented. There is little or no substantive information actually presented at the program.
• Excessive Value of Food, Alcohol Available. Alcohol is available (risk heightened if alcohol is free) or a meal exceeding “modest value” is provided to program attendees.
• Restaurant or Entertainment Venue. Programs held in a location that is not conducive to the exchange of educational information, including restaurants or entertainment venues.
• Number of Programs. Company sponsors a large number of programs on the same or substantially the same topic or product, especially if there have been no recent substantive change in relevant information.
• Program Does Not Follow New Product or Indication. Programs conducted where there has been a “significant period of time” with no new medical or scientific information nor new-FDA approval of a product or indication.
• Repeat Attendance. Programs where the attendees have attended other programs on the same or substantially the same topics more than once (as either a repeat attendee or as an attendee after serving as a speaker).
• Attendance by Friends, Family, and Staff. Program attendees include individuals who do not have a legitimate business reason to attend the program. OIG provides as examples friends, significant others, family members, practice employees and other staff, and “other individuals with no use for the information.”
• Sales Involvement. Sales representatives or marketing personnel involved in the selection of speakers or the company selects HCP speakers or attendees based on past or potential revenue generated by prescriptions (e.g., a return on investment analysis).
• Payment Exceeds FMV. Payment to HCP speakers exceeds fair market value for the speaking service or compensation takes into account the volume of business generated by the HCPs.

Many of these suspect characteristics echo HHS-OIG’s perspective on appropriate compliance guardrails for promotional speaker programs recently set forth in the Novartis CIA.

This Special Fraud Alert signals HHS-OIG’s continued concern that, absent appropriate safeguards, speaker programs funded by drug and device manufacturers may be used to induce speakers to recommend the companies’ products. In describing these suspect characteristics, OIG does acknowledge “that the lawfulness of any remunerative arrangement, including speaker program arrangements, under the anti-kickback statute depends on the facts and circumstances and intent of the parties.” Moreover, we note that HHS-OIG Special Fraud Alerts are non-binding guidance for purposes of bringing enforcement actions. That said, the Special Fraud Alert does signal that there will be continued whistleblower activity and scrutiny by DOJ and HHS-OIG of promotional speaker programs going forward.

¹HHS-OIG Special Fraud Alerts are non-binding guidance used by the Agency to notify the industry of certain practices of which it plans to pursue, or bring enforcement action, as appropriate. These alerts are fairly infrequent; the Agency has released only four Special Fraud Alerts in the last decade, with the last Alert released in June 2014.

²For purposes of this Special Fraud Alert, speaker programs are defined as “company-sponsored events at which a physician or healthcare professional (HCP) makes a speech or presentation to other HCPs about a drug or device product or a disease state” on the company’s behalf.