Pharmaceutical Research and Manufacturers of America (PhRMA) recently announced revisions to its voluntary " Code on Interactions with Health Care Professionals" (HCPs), which will take effect January 1, 2022. [1] These revisions primarily relate to company-sponsored speaker programs and address many of the concerns raised by the Department of Health and Human Services Office of Inspector General (OIG) in a Special Fraud Alert issued last fall. [2]
The PhRMA Code's (Code) updated guidance on speaker programs reiterates the educational value of these programs, which the OIG called into question in its Special Fraud Alert. To that end, the Code emphasizes that the purpose of speaker programs "should be to present substantive educational information designed to help address a bona fide educational need among attendees." The revised Code also provides new guidance as to how speaker programs should be conducted to mitigate the risks that OIG identified in the Special Fraud Alert.
(1) The Code explains that incidental meals may be offered to attendees provided they are modest "as judged by local standards" and subordinate in focus to the educational component of the program. Incidental meals offered in conjunction with company-sponsored speaker training programs and meetings with HCP consultants should be similarly modest "as judged by local standards."
(2) The Code now includes the directive that companies should not pay for or provide alcohol in connection with speaker programs, in direct alignment with the OIG's view.
(3) The Code clarifies that companies should select modest venues conducive to informational communication, which explicitly excludes "[l]uxury resorts, high-end restaurants, and entertainment, sporting or other recreational venues or events." Unlike the Special Fraud Alert, the revised Code does not go so far as to advise that restaurants are categorically inappropriate venues for speaker programs and specifically reaffirms that a private room at a restaurant is a suitable forum for a speaker program. The Code also includes these parameters for company-sponsored speaker training programs and meetings with HCP consultants.
(4) The Code defines appropriate attendees as those individuals who have a "bona fide educational need to receive the information presented." Repeat attendance at a speaker program on the same or substantially the same topic is generally not appropriate, nor is attendance by speakers as participants at programs after speaking on the same or substantially the same topic. Furthermore, friends, significant others, family members, or other guests of a speaker or invited attendee are not appropriate attendees, unless they have the bona fide educational need to receive the information presented.
(5) Regarding companies' engagements with HCPs as speakers, the Code pulls language directly from the OIG alert that decisions to select and retain speakers should not be based on "past revenue that the speaker has generated or potential future revenue that the speaker could generate by prescribing or ordering a company's products." Relatedly, any compensation provided to a speaker should be reasonable and based on fair market value and should not account for "the volume or value of past business that may have been or potential future business that could be generated for the company" by that speaker. This latter directive also applies to companies' consultant arrangements with HCPs.
PhRMA also updated the Code's principles on "incidental meals" offered to HCPs for informal presentations made by company representatives in an office or hospital setting. The Code advises that these meals can only be provided "where there is a reasonable expectation, and reasonable steps are taken to confirm, that each attendee has a substantive interaction or discussion with the company representative" — in other words, company representatives cannot offer "grab-and-go" meals.
Equally noteworthy are the ways in which the revised PhRMA Code deviates from the OIG Special Fraud Alert. As noted above, PhRMA recognizes the educational import of speaker programs and encourages the continued, appropriate use of such programs — despite the OIG's strong suggestion that companies eliminate them altogether, considering the availability of similar educational information through means that do not involve remuneration to HCPs. Further, the revised Code does not adapt the OIG's novel concerns about the involvement of sales and marketing in speaker selection or a company's return on investment analysis as a basis for attendee selection. Though, as discussed above, the Code does align with the OIG's position that return on investment is not an appropriate consideration for speaker selection.
With less than five months until the revised PhRMA Code takes effect, pharmaceutical companies should carefully evaluate their policies on speaker programs in light of the revisions and the Special Fraud Alert. Company-sponsored speaker programs are not per se illegal kickbacks and, as OIG acknowledges, there is no one factor that is determinative of an Anti-Kickback Statute (AKS) violation. However, the Special Fraud Alert makes clear that speaker programs do present heightened AKS risks and consequently, enforcement focus. Therefore, manufacturers must ensure that they conduct these programs with sufficient controls that demonstrate an intent to educate — not to induce or reward prescriptions.
[1] (PhRMA), Statement on Revisions to the PhRMA Code on Interactions with Health Care Professionals (Aug. 6, 2021); PhRMA, Code on Interactions with Health Care Professionals (published Aug. 6, 2021, effective Jan. 1, 2022).
[2] Troutman Pepper, Anti-Kickback Statute Enforcement Year in Review and Outlook for 2021 (Feb. 1, 2021); HHS-OIG, Special Fraud Alert: Speaker Programs (Nov. 16, 2020).
