Red Flags for Physicians Considering Paid Speaking Engagements

Recently, DOJ announced that pharmaceutical giant Pfizer, on behalf of its subsidiary, Biohaven Pharmaceutical Holding Company Ltd. (“Biohaven”), has agreed to pay nearly $60 million to resolve allegations that Biohaven knowingly caused the submission of false claims to Medicare and other federal health care programs by paying kickbacks to health care providers (“HCPs”) to induce prescriptions of Biohaven’s migraine drug Nurtec ODT before Pfizer acquired the company.

The settlement resolves allegations that Biohaven paid improper remuneration, including speaker honoraria and meals at high-end restaurants, to HCPs to induce them to prescribe the migraine medication from March 1, 2020, through September 30, 2022. The settlement agreement states:

Biohaven paid health care providers (“providers”) honoraria to present to other providers about Nurtec ODT at speaker programs, which were held virtually, in providers’ offices, or at offsite venues, such as high-end restaurants. The United States contends that Biohaven selected certain providers to be part of the Nurtec ODT speaker bureau and/or provided paid speaking opportunities to providers with the intent that the speaker honoraria would induce these providers to prescribe Nurtec ODT. Biohaven paid some providers tens of thousands of dollars and, in some cases, more than a hundred thousand dollars for speaker programs. Speaker programs were also attended by individuals with no educational need to attend, such as the speaker’s spouse or family members, friends, and colleagues from the speaker’s own practice. The United States further contends that certain providers who attended multiple programs on the same topic and received expensive meals and drinks paid for by Biohaven received no educational benefit from attending these programs; rather, Biohaven intended the purchase of meals and drinks to induce these providers to prescribe Nurtec ODT.

The settlement serves as a reminder for life sciences executives and HCPs to thoroughly vet speaker bureau opportunities for any indication of kickbacks or above fair market value compensation.

The concern over sham speaker arrangements is nothing new; the PhRMA Code, a voluntary code of ethics for pharmaceutical companies, emphasizes that speaker programs must be for “bona fide educational needs,” with restrictions on alcohol, venue extravagance, and speaker selection based on past or potential referrals, and encourages modest meals and venues. In November 2020, the HHS-OIG issued a Special Fraud Alert with the following red flags for HCPs who are offered paid speaking opportunities:

 

• The company sponsors speaker programs where little or no substantive information is 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, 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 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 issue);

• 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 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 considers the volume or value of past business generated or potential future business generated by the HCPs.

 

Based on our experience as physician compensation consultants, we would add a few more warning signs for HCPs when they are considering a paid speaking engagement:

• The company representative can’t or won’t explain how speakers are nominated or chosen.

• Speaking engagements seem impromptu or poorly planned.

• The company provides no direction or resources on preparing a slide deck (or they don’t require the speaker to use one).

• The company doesn’t review content or has no comments after reviewing content.

• The speech isn’t going to be recorded.

• The company has no explicit and transparent policy for scheduling and compensating speakers.

• The company seems flexible or readily negotiates compensation with speakers.

• The company wants to pay upfront or offers a retainer fee for unspecified future services.

• The company representatives seem dismissive of organizational policies or compliance concerns.

 

BFMV offers valuation and consulting assistance to HCPs. If you’re considering participation in a speaker program and want an independent review of the compensation offered, please contact us.