In a rare move, the U.S. Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) on Nov. 16, 2020 issued a Special Fraud Alert —which is the first issued since 2014—warning of inherent fraud and abuse risks “associated with the offer, payment, solicitation, or receipt of remuneration relating to speaker programs.”  https://oig.hhs.gov/fraud/docs/alertsandbulletins/2020/SpecialFraudAlertSpeakerPrograms.pdf 

The OIG notes that in the last three years, drug and device companies have reported paying nearly $2 billion to HCPs for speaker-related services, according to HHS-OIG. The OIG warned it’s “skeptical about the educational value of such programs” and cited numerous examples of investigations and fraud cases the OIG and Department of Justice have brought in connection with speaker programs that violated the Anti-Kickback Statute (AKS).

The OIG stressed any party involved in speaker programs “may be subject to increased scrutiny.” This includes “any drug or device company that organizes or pays remuneration associated with the program, any HCP who is paid to speak, and any HCP attendees who receive remuneration from the company (e.g., free food and drink).”

Stopping short of giving the perception of attempting to ban speaker programs, which might trigger First Amendment concerns, the HHS-OIG’s Special Fraud Alert notes that parties involved in speaker programs may be subject to increased scrutiny, expressing longstanding concerns over the practice of drug and device companies providing anything of value to health care professionals in a position to make or influence referrals regarding the company’s offerings.

In particular, the HHS-OIG notes:
1. When a drug or device company engages in “entertainment, recreation, travel, meals or other benefits in association with information or marketing presentations,” such arrangements may potentially implicate the anti-kickback statute; and
2. When physicians consult or undertake a speaking arrangement with a drug or device company, this could be an improper inducement “to prescribe or use [company] products on the basis of . . . loyalty to the company or to get more money from the company, rather than because it is the best treatment for the patient.”

The Special Fraud Alert includes further specificity from the HHS-OIG on what it considers potential characteristics that suggest a speaker program arrangement may violate the AKS, including the following (“risk factors”):

1. The company sponsors speaker programs where little or no substantive information is actually presented;
2. 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);
3. The program is held at a location that is not conducive to the exchange of educational information (g., restaurants or entertainment or sports venues);
4. 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;
5. There has been a significant period of time with no new medical or scientific information or a new FDA-approved or -cleared indication for the product;
6. Health care professionals 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);
7. Attendees include individuals who do not have a legitimate business reason to attend the program, including, for example, friends, significant others, or family members of the speaker or 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;
8. The company’s sales or marketing business units influence the selection of speakers, or the company selects speakers or attendees based on past or expected revenue that the speakers or attendees have generated or will generate by prescribing or ordering the company’s product(s) (g., a return-on-investment analysis in identifying participants); or
9. The company pays 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 health care professionals.

While the Special Fraud Alert primarily deals with in-person speaker compensation, OIG indicates that similar risks still exist with online conferences. For instance, high compensation for speakers at webinars may be even less permissible in OIG’s opinion, as these online events do not involve the travel and time commitment than in-person events require.

Physicians should, at a minimum, require pharmaceutical and medical device companies to include a representation and warranty that the compensation has received a “fair market value” assessment from an independent third-party valuation firm and be aware of the OIG’s “risk factors” mentioned above for both in-person and virtual speaker programs.