On November 16, 2020, OIG issued a significant Special Fraud Alert that warns about certain “inherent” fraud and abuse risks raised by speaker programs sponsored by pharmaceutical and medical device companies. OIG expressed deep skepticism about the educational value of such programs, cautioned that parties involved in speaker programs may be subject to increased scrutiny, and provided a list of suspect characteristics that may indicate a speaker program arrangement could violate the Federal Anti-Kickback Statute (the AKS). OIG also urged companies to reassess the need to resume in-person programs following the COVID-19 pandemic.

Pharmaceutical and medical device companies frequently sponsor speaker programs to educate health care providers (HCPs) about products and related disease states. At a typical event, a physician or other HCP who is not an employee of the sponsoring company makes a speech or presentation to an audience of other HCPs. The sponsoring company generally pays the speaker an honorarium and attendees receive remuneration in the form of meals and beverages. Information reported to CMS’s Open Payments website indicates drug and device companies have paid nearly $2 billion to HCPs for speaker-related services in the last three years.

In recent years, OIG and DOJ have investigated and resolved many cases involving allegations that remuneration offered and paid through speaker programs violated the AKS. In these cases, the government has alleged that the companies sponsored speaker programs with the intent to induce HCPs to recommend, prescribe, or order the company’s products. The companies are often alleged to have rewarded high-prescribers with speaking engagements, conditioned remuneration on meeting sales targets, held programs in a manner or place not conducive to the presentation of educational information, provided lavish meals and alcohol, and/or invited HCPs who had previously attended the same program or others who lacked a legitimate reason for attending.

OIG is skeptical about the educational value of speaker programs and believes there are many alternative ways for HCPs to obtain information about products and disease states that do not involve receiving remuneration from companies. For example, the agency believes HCPs can access the same or similar information through online resources, package inserts, third-party educational conferences, and medical journals. From the agency’s perspective, the availability of this information through alternative channels that do not involve remuneration to HCPs suggests that at least one purpose of speaker program remuneration is to induce or reward ordering or prescribing items paid for by Federal health care programs.

OIG cautioned that any party involved in speaker programs may be subject to increased scrutiny. The agency directed this warning not only to drug and device companies but also to HCPs who either speak at or attend such programs and who receive remuneration from the companies, such as in the form of an honorarium or free food and drink.

Recognizing the lawfulness of any arrangement under the AKS will depend on the facts, circumstances, and intent of the parties, OIG provided a non-exhaustive list of suspect characteristics, the presence of which may indicate a speaker program arrangement violates the AKS:

• Little or no substantive information is presented at the speaker programs.
• Alcohol is available or a meal exceeding modest value is provided to attendees (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).
• Large numbers of programs on the same or substantially the same topic or product, especially where there is 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 persons who lack a legitimate business reason to attend the program (e.g., friends, significant others, or family members of the speaker or HCP attendee; employees or professionals from the speaker’s medical practice; staff of facilities for which the speaker is a medical director).
• 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 individuals have or will generate by prescribing or ordering the company’s product(s) (e.g., participants are chosen based on an ROI analysis).
• The company pays HCP speakers more than FMV for the speaking service or pays compensation that takes into account the volume or value of past—or potential future—business generated by the HCPs.

Social distancing requirements relating to the COVID-19 pandemic have reduced many in-person activities, including speaker programs. However, OIG cautioned that risks remain whenever companies offer or provide remuneration to HCPs who generate Federal health care program business. During the pandemic, many companies have pivoted to online educational platforms, and OIG’s commentary suggests that even remote speaker programs that involve remuneration may attract government scrutiny. OIG also urged companies to reassess the need for in-person programs following the pandemic, warning that the risks of such programs “will become more pronounced if companies resume in-person speaker programs or increase speaker program-related remuneration to HCPs.”

Although OIG emphasized that it does not intend to “discourage meaningful training and education,” the Special Fraud Alert places the drug and device industry on notice that sponsors of speaker programs may face intense government scrutiny.

The Special Fraud Alert is available here.