In December 2022, a Sarasota, Florida, pain management physician was sentenced to three years and six months in federal prison and ordered to forfeit $278,900 in kickbacks and bribes. According to evidence presented at trial, in less than three years, the physician’s prescriptions for Subsys, a fentanyl sublingual spray used to relieve breakthrough pain in cancer patients, had amounted to over $4.5 million in Medicare Part D payments to Insys Therapeutics, Inc., the drug’s manufacturer.
In interviews, the physician stated that he believed the drug was beneficial to his patients and that he had no intention of wrongdoing. However, investigations by the Federal Bureau of Investigation, the Department of Health and Human Services – Office of Inspector General, the Defense Criminal Investigative Service, and the Opioid Fraud Abuse and Detection Unit at the United States Attorney’s Office found that Insys paid the physician for multiple sham speaking engagements, at $2,400 to $3,000 per speech. In exchange for these payments, the physician wrote more and higher dosage prescriptions for Subsys.
The Sarasota physician was just one of many physicians charged with accepting bribes and kickbacks from Insys disguised as speaker fees. A 2018 minority staff report issued by the US Senate Homeland Security and Governmental Affairs Committee detailed how speaker programs were a key component of Insys’ aggressive strategy to boost sales. The report notes that speakers’ programs often lacked content and attendance. In the Sarasota case, the investigation found that the physician’s speeches were sparsely attended, usually by the physician’s family members or repeat attendees. The sales rep also falsified attendance records with the names of other physicians who did not participate.
The case in Sarasota reinforces that physicians can face criminal and civil liability for accepting kickbacks from drug and device companies in the form of illegitimate speaking events or above-fair-market value compensation for marketing services. It also shows that it is easier for investigators to spot sham arrangements. Since the Physician Payments Sunshine Act took effect, physicians’ payments from life sciences companies for speaking engagements and other promotional activity are published annually on the Open Payments website maintained by the Centers for Medicare and Medicaid Services. In the Sarasota case, before his indictment, local television had already begun reporting on the Insys story and had identified the physician as one of the highest prescribers of Subsys.
Because of the prevalence of sham speaker bureaus, and to help industry participants stay compliant, the HHS-OIG issued a Special Fraud Alert in November 2020 with the following red flags for health care professionals (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 or 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 takes into account 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 doesn’t have an 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 reach out to Darcy Devine at email@example.com.