The government’s FCA enforcement efforts have continued to focus on key areas concerning the pharmaceutical and medical device industries. In fact, drug and device manufacturers accounted for nearly half of the enforcement recoveries from the healthcare industry last year. Manufacturers also saw enforcement agencies focus on product promotion and speaker program practices, as well as alleged violations of Current Good Manufacturing Practices (cGMP).
Speaker Programs Closely Scrutinized
Speaker Programs are an industry norm because prescribers prefer to be educated about a product by their peers rather than a sales representative. These programs have received significant attention from enforcement agencies and relators because companies typically provide their speakers, who are also prescribers of the companies’ products, with honoraria for their involvement. If the programs are not carefully implemented and executed, companies may open themselves up to AKS and FCA liability. Last year, there were mixed outcomes for pharmaceutical and medical device companies that had to defend their speaker program practices.
In U.S. ex rel. Booker v. Pfizer, Inc., 2016 WL 3017381 (D. Mass. May 23, 2016), after six years and five amended complaints, Pfizer was awarded summary judgment in connection with allegations that it paid kickbacks to physicians through a sham speaker series in order to induce additional prescriptions. The relators, two former sales representatives, suggested, in part, that the series was a sham because the company did not use “nationally known opinion leaders,” the programs were conducted with one-on-two lunches instead of large groups and the company tracked the return on investment from its series. The district court concluded that Pfizer’s series was organized under written contracts that met the requirement the AKS Personal Services safe harbor and that none of the evidence provided by the relators was sufficient to take it out of the safe harbor. The district court explained that having speakers present to small groups may not be the “best, most cost efficient” way to run a speaker series, but it does not “suggest that the program necessarily had a ‘universal and improper purpose’ of inducing the speaker to prescribe Gedeon.” Likewise, the district court found it “unremarkable” that Pfizer tracked its return on investment from a series because as a for-profit company that is to be expected and only the attendees – not the speakers – were tracked. An appeal is pending for this matter in the First Circuit.
In U.S. ex rel. Kroening v. Forest Pharmaceuticals, Inc., 155 F. Supp. 3d 882 (E.D. Wisc. 2016), the district court found that allegations that Forest used speaking fees to pay kickbacks to physicians to induce them to prescribe Forest products did not meet the particularity requirements of...
