Last week, the Office of Inspector General for the Department of Health and Human Services issued a special fraud alert to pharma companies and medical device makers with a stern warning: Consider dropping physician speaker programs because of their potential for kickbacks and corruption.
“OIG is skeptical about the educational value of such programs,” the alert said.
The OIG pointed to a history of fraud enforcement involving physician speaker programs that strongly indicates that the purpose of speaking events is often to induce doctors to prescribe a company’s drugs or medical devices and to reward physicians who do so. Speaker programs can run afoul of the Anti-Kickback Statute, which prohibits a company from offering doctors and other healthcare providers financial incentives to prescribe or use products or services for which Medicare, Medicaid or other federally funded healthcare programs pay.
According to HHS, drug and medical device companies have reported paying nearly $2 billion to physicians for speaker-related services just in the last three years.
The OIG pointed to studies that show that doctors who receive payment or other forms of remuneration from a company are more likely to prescribe or order that company’s products. Not only might this violate the Anti-Kickback Statute, the payments raise concerns that physicians may base patient treatment decisions on their financial interests, rather than the patient’s best interests.
Whistleblowers have been important watchdogs in exposing the illegal kickbacks that are tied to speaker programs.
In a recent high-profile settlement, Swiss drug manufacturer Novartis Pharmaceuticals agreed to pay $678 million to settle a whistleblower’s qui tam lawsuit and government charges that alleged Novartis operated a sham speaker program to induce physicians to prescribe its diabetes and cardiovascular drugs. Federal healthcare programs paid hundreds of millions of dollars in reimbursements for those prescriptions.
Acting U.S. Attorney for the Southern District of New York, Audrey Strauss, said that Novartis’s speaker programs, which paid speakers, and offered lavish meals and top-shelf alcohol to doctors “were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs.”
Speaker programs have also been implicated in the deadly opioid crisis. Insys Therapeutics, the former manufacturer of fentanyl spray Subsys, used speaker programs as part of its corrupt efforts to encourage physicians to over-prescribe the ultra-potent, highly addictive narcotic.
Phillips & Cohen represented the former Insys sales rep who first exposed Insys’s tactics. Her whistleblower lawsuit alleged that Insys used a sham speaker program, cash bribes, lucrative business deals and other inducements to encourage doctors to over-prescribe large doses of Subsys.
Days after Insys agreed to a $225 million settlement of civil and criminal charges, the company filed for bankruptcy. Former Insys CEO and founder John Kapoor and other company executives were convicted of criminal charges and sentenced to prison.
The special fraud alert is the first one that OIG has issued since 2014, according to the news website, Fierce Pharma – an indication of how physician speaker programs are a top OIG enforcement priority.
“Parties involved in speaker programs may be subject to increased scrutiny,” OIG warned, including pharma companies and device makers who sponsor the events, speakers and doctors and other healthcare professional who attend.
Whistleblowers play a key role in uncovering illegitimate speaker programs that violate the Anti-Kickback Statute, Stark Law and federal False Claims Act. Whistleblowers who bring successful qui tam whistleblower cases are entitled to rewards of 15 percent to 30 percent of the government’s recovery, as well as protection from retaliation.
If you are aware of physician speaker programs involving kickbacks and are considering whether to blow the whistle, contact Phillips & Cohen LLP for a free confidential review of your potential case.
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