By: Joseph Gentile, Esq.
SARRAF GENTILE LLP
The Inspector General of the U.S. Department of Health and Human Services (HHS) has issued a “Special Fraud Alert” aimed at programs that pay healthcare professionals for speaker-related services.
These speaker programs by pharmaceutical and medical device companies have paid healthcare professionals roughly $2 billion during the past three years and have raised numerous legal concerns.
The rarity of the HHS alert – the first since 2014 – as well as its timing and target are notable. You can view a copy of the alert here: https://oig.hhs.gov/fraud/docs/alertsandbulletins/2020/SpecialFraudAlert...
The alert comes amid a global pandemic which has significantly reduced travel and in-person events of all kinds. As a result, the speaker programs targeted by the alert are currently not taking place. Acknowledging this pause in programming, HHS has taken the extraordinary step of issuing a “Special Fraud Alert” urging pharmaceutical and medical device makers to reconsider resuming these in-person paid healthcare professional speaker programs.
The alert details “some of the inherent fraud and abuse risks” associated with programs that pay doctors and other healthcare professionals for speaker-related services. It also reviews the investigations conducted by HHS, the “numerous fraud cases” that have been brought involving these programs and the civil and criminal charges arising from them.
The alert even identified the pharma industry trade group PhRMA, saying it was “skeptical about the educational value” of such programs and pointed to HHS findings that professionals often “receive generous compensation to speak at programs offered under circumstances that are not conducive to learning or to speak to audience members who have no legitimate reason to attend.”
Needless to say, it’s a blunt and thoughtfully-timed announcement aimed at programs that, at least for big-pharma, have been highly problematic.
For example, in July 2020 Novartis settled a seven-year lawsuit with federal and state governments that alleged, among others, using thousands of speaker programs (from 2002 to 2011) as a way to disguise bribes (i.e., kickbacks) to doctors. The suit, which was originally filed by a whistleblower under the False Claims Act (FCA), was resolved after Novartis agreed to pay roughly $650 million.
As part of its resolution of the whistleblower case, Novartis also agreed with the HHS Inspector General – the same that issued this alert – to significantly reduce future paid-speaker programs and the amounts spent on them. And according to the lead federal prosecutor in Manhattan: “This office will continue to be vigilant in cracking down on kickbacks, however they may be dressed up, throughout the pharmaceutical industry.”
Because the Novartis suit was filed under the FCA’s whistleblower provisions, the individual who initially reported the wrongdoing was entitled to a share of the government’s recovery. Under the FCA statute, a whistleblower is entitled to between 15% and 30% of whatever the government collects. The whistleblower in Novartis was awarded 18.5% – about $110 million.
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Joseph Gentile is an attorney in New York. He focuses his practice on whistleblower representation and served as counsel to one of the whistleblowers in the government’s historic $1.4 billion opioid recovery against Reckitt Benckiser Group. http://www.cafepharma.com/cpwire/article/reckitt-benckiser-group-plc-agr...
Joseph Gentile (http://www.sarrafgentile.com/joseph/)
Partner
SARRAF GENTILE LLP
516-699-8890
joseph@sarrafgentile.com