Run a Compliant Speaker Program, Avoid Costly Penalties and Criminal Prosecution

July 29  

By Gary Rom and Nicholas A. Klinefeldt

You’ve likely heard of the $225 million global resolution opioid manufacturer Insys Therapeutics reached with the Department of Justice (DOJ) on June 5, 2019 to settle misconduct charges stemming from its speaker program practices. You’ve also likely thought that your company would never engage in the same behavior.

However, failing to implement speaker program best practices can prompt suspicions of even the most scrupulous organizations – with potentially costly consequences.

Some quick background: In its quest for profits, Insys set up sham speaker programs that paid thousands of dollars in kickbacks to healthcare professionals to speak about their product, Subsys, a powerful form of the opioid painkiller fentanyl delivered in a spray. Although highly effective, Subsys is also highly addictive.

Speakers paid by Insys would present before groups in which there were no other healthcare professionals present. In fact, regular attendees were staff from the speakers’ offices and even the speakers’ family or friends. Insys sales representatives also contributed by forging attendance sheets claiming other healthcare professionals attended.

In the stipulated facts outlined in Insys’ corporate integrity agreement (CIA), much attention is paid to a particular healthcare professional who had little to no experience with Subsys prior to becoming a company-paid speaker. This individual wrote at least 672 Subsys prescriptions after becoming a speaker compared to no more than a handful before.

Insys’ resolution of this case with the DOJ consisted of a Deferred Prosecution Agreement against Insys with $30 million in criminal penalties, a $195 million settlement involving False Claims Act allegations and a five-year CIA. Prior to this resolution, the DOJ had convicted eight Insys executives in what it called “the first successful prosecution of top pharmaceutical executives for crimes related to the illicit marketing and prescribing of opioids.” 

This case highlights the DOJ’s focus on the opioid epidemic, bribes and kickbacks in the healthcare industry, as well as executive accountability. And even though Deputy Attorney General Rod Rosenstein recently pared back the Yates Memo, it is still DOJ policy to focus on individuals, and to require companies seeking cooperation credit in criminal cases to identify every individual who was substantially involved in, or responsible for, the criminal conduct. 

The criminal behavior is easy to spot in the Insys case, but it isn’t always that clear. Insys’ CIA contains lessons for designing and managing a compliant speaker program. Here are four guidelines to consider:

  1. Select speakers based on their expertise in their practice area and their reputation – not on their past and future utilization habits. 

When selecting speakers to present on products that have been on the market, it’s not necessary to automatically disqualify high prescribers, but a high prescriber who lacks a commensurate reputation in the medical community and a high level of clinical expertise could create suspicion. This could communicate to the Office of Inspector General (OIG) that you’re choosing speakers based solely on prescribing habits.

  • Clearly delineate the roles of salespeople to help demonstrate that your speaker program is legitimate promotional activity and not a kickback scheme.

Salespeople, including sales management staff, should not be involved in the selection of speakers. For these purposes, salespeople include field personnel making in-person calls to offices, field personnel who are incentivized by the total number of sales in their respective regions, and sales management. 

Allowing salespeople to engage potential speakers about their interest in speaking can create suspicion that speaker positions and payments are traded for prescriptions. Management of the speaker program and speakers should be performed by someone outside of sales. This person (or group) should be the only person who communicates with speakers regarding their speaker requirements: contracting, logistics, payment, training, etc.

While salespeople can play a role by identifying certain healthcare professionals they believe meet the speaker criteria, the final decision should be made by someone outside of sales who can objectively determine if the speaker meets the established company policy for speaker qualifications. As mentioned above, speakers should, at a minimum, meet certain expertise and reputation standards.

Moreover, salespeople should only provide the information needed to identify the potential speaker through a standard form and/or process to appropriately systematize and gather the input. The Insys CIA noted in the stipulated facts that an Insys sales representative encouraged the health care professional to submit his resume for consideration in the Insys speaker program.

  • Never measure a speaker program’s return on investment (ROI) by the individual speaker’s past and future utilization habits.

Insys expressly required speakers to write a minimum number of prescriptions to continue being speakers for the company. If speakers fell short of expectations, Insys reduced or even withheld payment until they hit their individual prescription targets.

It bears repeating: Never do this.

  • Create a compliant payment structure and corresponding policies.

The payment structure should include annual caps for total combined fees (speaking and advising) that an individual can receive from the company and objective criteria to determine the appropriate fee (fair market value) for the activity. It should be equally applied to all speakers.

The policy should also establish payment for cancelled events, with amounts based on who cancelled (the company or the speaker) and the time of cancellation relative to the scheduled event. Additionally, a minimum amount of speaker engagements should be required for each speaker. Contracting a speaker to do only one or two events can bring into question the intent of hiring that particular speaker. Plus, an individual speaker should not be disproportionately used more than other speakers in the program.

Insys paid full honoraria to speakers for events where no other healthcare professionals attended and when speakers did not present a program. Even without the other facts surrounding Insys’ speaker programs, it would have been nearly impossible for Insys to claim these payments were appropriate.

These four tips are an excellent start but are by no means an exhaustive list of all the policies and practices to consider when managing a compliant speaker program.

For additional information, refer to the AdvaMed Code of Ethics on Interactions with U.S. Health Care Professionals, PhRMA Code on Interactions with Healthcare Professionals and OIG guidance and advisory opinions. If you have any questions, please contact Gary Rom or Nick Klinefeldt.

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