A government watchdog's special fraud alert warning companies of red flags to avoid when soliciting doctors as speakers has caused a splash within the medtech industry — in particular new guidance on alcohol served at events.
The November 2020 alert from the Office of Inspector General addresses "suspect circumstances" medtechs and drugmakers might avoid to stay on the right side of compliance and avoid violating the Anti-Kickback Statute. The alert notes many cases involving industry and doctors come in settings "not conducive to learning," like high-end restaurants, bars and sporting venues, even fisheries and wineries.
"OIG is skeptical about the educational value of such programs," the alert states.
In addition to the suspect circumstances warning about alcohol at events, the alert notes inviting the same speakers on the same topic multiple times and if the company sponsors a large number of programs on the same topic.
"The special fraud alert has caused quite a splash in the industry over the past year," Sarah Cummings, an attorney who represents medtechs in fraud cases at Reed Smith, said during a session at AdvaMed's annual conference.
First on her list to discuss with Ben Wallfisch, senior counsel in the Industry Guidance Branch of the Office of Counsel to the Inspector General with HHS, was booze.
"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)," reads the guidance.
Drug and device makers have spent $2 billion in the past three years on such events, according to OIG. Companies have been required since 2013 to disclose payments to doctors and health systems, made public annually.
"How much is too much? Does the OIG really expect companies to eliminate all alcohol? Are companies really expected to ban alcohol?" Cummings asked.
Wallfisch said companies set the tone of such events and should think about where an event is located: a bar, high-end restaurant or something more akin to a classroom.
"I think it's fair to ask which one looks more like an educational event versus which looks more like an entertainment event," Wallfisch noted.
Discussion of the Public Health Emergency context also came up, since the alert was issued in the middle of the pandemic. Cummings asked if there is an implicit push toward virtual events by OIG, noting that medtech might be looked at differently than pharma with physical products involved.
"We think virtual programs are probably less risky from a compliance perspective" Wallfisch said, noting that meals, alcohol and an expensive venue would be taken off the table.
In terms of what companies should be doing in response to the alert, Wallfisch noted some trade groups have revised their ethics codes, including the drugmaker lobby Phrma.
"This is a chance to take a hard look and see if it's worth it. The document may signal that some types of practices are just too risky," Wallfisch said.
AdvaMed's ethics code is dated May and does not mention alcohol explicitly.