Numerous Foreign Corrupt Practices Act enforcement actions have involved the enforcement theory that various foreign health care professionals (HCP’s) are “foreign officials” and thus occupy a status similar to a President, Prime Minister, or other traditional bona fide government official.
Several of these enforcement actions have included allegations that HCP’s received speaker fees or honoraria from pharmaceutical or medical device companies.
For instance, the Sanofi enforcement action included allegations that an HCP was provided “with consulting, speaking, and clinical trial fees over a period of years despite the lack of documentation or other support to demonstrate the services had been provided.”
The Bristol-Myers enforcement action included allegations that the company, through the actions of certain China subsidiary employees, violated the FCPA’s books and records provisions “by falsely recording, as advertising and promotional expenses, cash payments and expenses for gifts, meals, travel, entertainment, speaker fees, and sponsorships for conferences and meetings provided to foreign officials, such as HCPs at state-owned and state-controlled hospitals as well as employees of state-owned pharmacies in China, to secure prescription sales.”
The Micrus enforcement action included allegations that “in connection with sales to public and private medical facilities … Micrus entered into several types of arrangements with doctors, pursuant to which the doctors used or promoted Micrus products in exchange for payments, commissions or honoraria.”
The Stryker enforcement action included allegations that “Stryker’s wholly-owned subsidiary in Argentina made 392 commission payments, or “honoraria,” to physicians employed in the public healthcare system in order to obtain or retain business with affiliated public hospitals.”
The AstraZeneca enforcement action involved allegations that the company’s China subsidiary “paid speaker fees to HCPs despite AZ China service contracts that were incomplete, containing no meeting date, venue, subject or fees associated with the particular speaker event.”
Against this backdrop, the Department of Health and Human Services – Office of Inspector General recently released this Special Fraud Alert regarding Speaker Programs, generally defined as “company-sponsored events at which a physician or other health-care professional makes a speech or presentation to other HCP’s about a drug or device product or a disease state on behalf of the company.”
Although the Fraud Alert is specific to the anti-kickback statute, the Fraud Alert describes various characteristics which could potentially indicate a speaker program arrangement may violate the anti-kickback statute.
Many of the same characteristics could also be used by compliance professionals at pharmaceutical and other healthcare related companies to minimize FCPA risk given the enforcement theories and actions referenced above.
The illustrative list of suspect characteristics are as follows.
“The company sponsors speaker programs where little or no substantive information is actually presented;
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);
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);
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;
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 individuals who don’t have a legitimate business reason to attend the program, including, for example, friends, significant others, or family members of the speaker or HCP 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;
The company’s sales or marketing business units influence the selection of speakers or the company selects HCP speakers or attendees based on past or expected revenue that the speakers or attendees have or will generate by prescribing or ordering the company’s product(s) (e.g., a return on investment analysis is considered in identifying participants);
The company pays HCP 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 HCPs.”
In the Alert, the OIG recognizes that it is being released “during the pandemic emergency, which is necessarily curtailing many in-person activities.” However, the Alert states that the “risks associated with speaker programs will become more pronounced if companies resume in-person speaker programs or increase speaker program-related remuneration to HCPs.”
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