PhRMA Updates Code on Interactions with Healthcare Professionals

Earlier this month, the Pharmaceutical Research and Manufacturers of America (PhRMA), announced it had made changes to its Code on Interactions with Healthcare Professionals. The “PhRMA Code†updates principles applicable to company-sponsored speaker programs.

Although voluntary, the standards outlined are considered best practices and generally are followed by drug and medical device companies. In fact, several states require drug companies to adopt a code similar to the PhRMA Code.

In making the code update, PhRMA said it has “long recognized that company-sponsored speaker programs provide important substantive educational information about the benefits, risks and appropriate uses of company medicines and related disease states.â€

At the same time, PhRMA said the purpose of these program should be to present “substantive educational information designed to help address a bona fide educational need among attendees†and invitations should be limited to those who have a bona fide educational need for the information presented at the program.

The changes likely are the result of a special fraud alert issued in November 2020 by the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). As we wrote about at the time, the watchdog agency’s alert pointed to fraud and abuse risks associated with the payment, solicitation or receipt of remuneration relating to these programs.

In that alert, OIG stated: “Our investigations have revealed that, often, [healthcare professionals] 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. Such cases strongly suggest that one purpose of the remuneration to the HCP speaker and attendees is to induce or reward referrals. Furthermore, studies have shown that HCPs who receive remuneration from a company are more likely to prescribe or order that company’s products.â€

PhRMA noted that while meals offered during these educational seminars should be modest, the updated code states that pharmaceutical companies should not pay for or provide alcohol in connection with the program and that high-end restaurants and other such venues are not appropriate locations to conduct these speaker programs.

PhRMA also addressed attendance stating: “Repeat attendance at a speaker program on the same or substantially the same topic where a meal is provided to the attendee is generally not appropriate, unless the attendee has a bona fide educational need to receive the information presented. Furthermore, the PhRMA Code clarifies that attendance by speakers as participants at programs after speaking on the same or substantially the same topic is generally not appropriate.

The code also notes that attendance by non-healthcare professionals, such as spouses and friends, is not appropriate “unless these individuals have an independent, bona fide educational need to receive the information presented.â€

In recent years, a number of pharmaceutical companies have found themselves in violation of the False Claims Act and Anti-Kickback statutes for conduct relating to such speaker programs.

For example, in July 2020, Pharma giant Novartis agreed to pay more than $591 million to resolve FCA claims that it paid kickbacks to doctors to induce them to prescribe a number of its drugs. In that case, it was alleged that Novartis hosted tens of thousands of speaker programs and related events under the guise of providing educational content, when in fact the events served as a way to pay doctors bribes in exchange for prescribing their drugs. Doctors were paid to speak at these events. However, they were little more than social events at expensive restaurants, or in some instances the event never took place, and the speaker was simply paid a fee.

And as we wrote about in January 2020, Teva Pharmaceuticals agreed to pay $54 million to settle allegations it paid speaker fees to neurologists for participation in “sham†speaker programs in exchange for them prescribing drugs for multiple sclerosis and Parkinson’s.

Over the years, both healthcare professionals and drug and medical device companies have become the target of investigations for either offering or accepting kickbacks in conjunction with these speaker programs.

The new code is to take effect on Jan. 1, 2022. Those in the business of conducting or attending such events would be well advised to comply with the updated codes to ensure they don’t run afoul of any laws.

The Health Law Offices of Anthony C. Vitale can assist with the creation of compliance programs to make sure you don’t become the target of an investigation. Should you become the target of an investigation, we also can assist in your defense. For more information call 305-358-4500 or email info@vitalehealthlaw.com.