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In a Special Fraud Alert, the Office of the Inspector General of the Department of Health and Human Services advised pharma companies to stop paying high fees to healthcare professionals for giving presentations on certain drugs or treatments.
Most biopharma companies have dropped in-person promotional activities during the pandemic, and government enforcement officials would like that to continue in the future. In issuing an unusual Special Fraud Alert Nov. 16, 2020, the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) advised pharma companies to stop paying high fees to healthcare professionals (HCPs) for giving presentations on certain drugs or treatments.
Drug and medical device marketers channeled some $2 billion to HCPs for speaker-related services during 2017-2019, according to data filed with the HHS Open Payments program. The OIG complains that many of these events are held at expensive restaurants and repeatedly involve the same attendees. The main legal issue is that speakers often are selected based on high prescribing activity, opening both the marketer and the speaker to charges of violating federal anti-kickback statutes that can carry high fines and criminal charges.
The OIG says it will look more closely at situations where company marketing departments help select speakers, firms offering multiple programs on the same topic, programs that provide little new information on older products, meals that exceed modest costs, and speaker fees well exceeding fair market value for such services.
Most recently, Novartis was involved in such a case, which was finally resolved last July 2020 with the firm signing a Corporate Integrity Agreement (CIA) with the OIG, agreeing to greatly limit speaker events and payments. The company paid a $678 million fine to settle fraud charges stemming from six-figure honorariums to high prescribers and lavish entertainment for selected physicians. Novartis paid additional fines to settle charges brought by the Department of Justice and the Securities & Exchange Commission.
Now the OIG is reminding marketers of its “significant concerns” that paid speaker programs are really a way for firms to induce prescribing of items paid for by federal health care programs, such as Medicare or Medicaid. Although the OIG says it doesn’t want to discourage “meaningful” training and education of health professionals, it remains “skeptical about the educational value of such programs.” The enforcer similarly warns physicians to reconsider the propriety of such relationships with industry, noting that there are risks related to taking such remuneration.