Olivia Plinio, Lauren Sullivan, Epstein Becker & Green
On August 6, 2021, the Pharmaceutical Research and Manufacturers of America (“PhRMA”) released revisions to its Code on Interactions with Health Care Professionals (“Code”). The Code applies to pharmaceutical company interactions with U.S. health care professionals (“HCPs”). While the Code was developed as a voluntary industry standard, compliance is required by statute or regulation in a number of states and the District of Columbia. In addition, some companies, including both PhRMA members and non-members, voluntarily submit annual certifications to PhRMA certifying that the companies have policies and procedures in place to foster compliance with the Code.
The Code’s revisions, which become effective January 1, 2022, relate mainly to company-sponsored speaker programs and parallel the concerns set forth in the Special Fraud Alert (“Alert”) released by the U.S. Department of Health and Human Services’ Office of Inspector General (“OIG”) in November 2020. The Alert highlighted the fraud and abuse risks associated with pharmaceutical and medical device manufacturers’ speaker programs, events where HCPs are engaged by a manufacturer to deliver educational content regarding the manufacturer’s products to other HCPs. OIG took issue with several aspects of these programs and detailed its fraud and abuse concerns in the Alert. OIG asserted that speakers were often selected based on past or anticipated business, rather than their expertise in the field. OIG noted that programs were often held in high-end venues where attendees would be offered remuneration in the form of extravagant meals and alcohol. Further, OIG identified a number of suspect characteristics regarding program content, including programs where little or no substantive information is actually presented and programs on substantially the same topic where there is no recent substantive change in relevant information or a significant period of time with no new medical or scientific information or new Food and Drug Administration-approved or cleared indication. In addition, the Alert detailed fraud and abuse concerns regarding the selection of program attendees, including attendees frequenting the same programs multiple times, attendance by friends or family members of the speaker or attendees, and attendance by staff members of the speaker’s medical practice.
The updated Code reiterates many of the existing provisions intended to address the fraud and abuse risks identified by OIG while offering some more nuanced clarification on others. Pharmaceutical and device manufacturers would be well advised to familiarize themselves with these updates, revisit and revise their applicable policies, and take other necessary steps to ensure compliance prior to the effective date of the Code’s revisions. In addition, manufacturers may want to archive a prior version of the Code for their historical records.
Below we highlight a number of key provisions and considerations from the updated Code.
Speaker Selection, Compensation, and Utilization
The Code previously provided that speakers should be selected based upon expertise and professional qualities, not past or anticipated business. The updated Code provides greater direction for companies to ensure that speaker selection is based on defined criteria, such as general medical expertise and reputation, knowledge and experience in a therapeutic area, and communication skills, independent of the revenue generated from the speakers prescribing/ordering. Also, the updated Code provides specificity regarding fair market value compensation to speakers.
Pharmaceutical and device manufacturers should review their internal processes for speaker selection. For example, if a company’s current policy permits sales team members to nominate speakers, the company should consider reviewing those terms in light of the updated Code. Company policies should make certain that speaker compensation is reasonable and based on fair market value. For example, according to the updated Code, each company should individually and independently cap the total amount of annual compensation it will pay an HCP for speaking at the company’s programs. According to the updated Code, companies should develop policies to ensure appropriate use of speakers following training, including the appropriate number of speaking engagements for each trained speaker.
Attendees’ Bona Fide Educational Needs
As established by the previous version of the Code, the purpose of speaker programs is to present substantive educational information designed to help address a “bona fide educational need among attendees.” The updated Code includes provisions that limit invitations to speaker programs only to those HCPs who have a bona fide educational need for the information. It is generally established that speaker program attendees should be those HCPs who would be considered appropriate, on-label prescribers of the drug or device, or non-prescribing HCPs practicing in that field. However, even if they are on-label prescribers, they may not have a bona fide need to attend the educational program because they may have already been educated on the same subject recently or there is no new information. Companies should review their policies to determine whether this kind of information is taken into account. The limitation to HCPs with a “bona fide educational need” also suggests an expectation by PhRMA that companies will implement processes, such as a needs assessment or other gap analyses, to determine whether potential HCP invitees actually have a need for the information presented at the speaker program. Companies likely already have these processes in place for determining the types of programs to hold and the number of HCPs to engage to speak at these programs. However, companies should consider expanding those processes to assess potential HCP attendees’ “bona fide educational needs” prior to issuing invitations.
Speaker and Attendee Guests
The Code has long stated that spouses or other guests should not attend speaker programs unless they would otherwise be an appropriate HCP attendee. The updated Code further refines this direction by providing that spouses, significant others, friends, family members, or other guests of attendees or speakers should not attend speaker programs unless the guest is also a health care professional who has an independent and bona fide educational need to receive the information presented in the speaker program.
Companies should make sure their policies reflect these limitations and confirm that the policies are being followed in practice. To ensure compliance, companies may utilize sign-in sheets, which may require HCPs to include their National Provider Identifier numbers to verify that they are proper attendees. Companies should also ensure that staff attending the program are adequately trained on these policies and have a protocol in place for turning away improper attendees. In addition, it may be helpful to include guest restriction warnings on invitations to HCPs to minimize the risk of improper attendees.
The updated Code states that 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 at the speaker program. Similar to the above guidance, companies must keep a close watch over who attends their speaker programs. To avoid repeat attendees, companies should consider updating their policies with additional procedures for tracking past attendees.
The Code has long provided that speaker programs should occur in a venue and manner conducive to informational communication. The updated Code clarifies that high-end restaurants, luxury resorts, and similar venues are “not appropriate locations” for speaker programs. If not already a part of company policy, speaker program policies should ensure that programs take place at appropriate venues and should consider including the updated Code’s clarification of which locations are not appropriate for speaker programs. PhRMA and OIG are very skeptical of programs that take place at extravagant locations, including up-scale restaurants. The main consideration when selecting a location for a speaker program should be whether the venue is conducive to the presentation of educational information. Companies may want to review their current selection criteria in order to make sure that venues are compliant and appropriate for the programs’ purpose. Additionally, companies should review their vendor policies to ensure that any vendors responsible for site selection are well trained on the site selection criteria necessary to adhere to company policies.
Previous versions of the Code stated that incidental meals offered as part of the speaker programs should be “modest as judged by local standards.” The updated Code also specifies that companies should not pay for or provide alcohol in connection with speaker programs.
OIG and now PhRMA have made it clear that alcohol—whether provided by the company or paid for by the attendees—should not be served at speaker programs. Companies may have previously allowed HCPs to purchase alcohol at speaker programs, referred to as a “cash bar.” Companies may want to consider selecting venues that do not serve alcohol. Companies should review their policies accordingly.
 The Code is available at https://phrma.org/-/media/Project/PhRMA/PhRMA-Org/PhRMA-Org/PDF/P-R/PhRMA-Code—Final—July-2021.pdf.
 Compliance with the Code is mandated to some extent by statute or regulation in California, Massachusetts, and Nevada.
 The Alert is available at https://oig.hhs.gov/fraud/docs/alertsandbulletins/2020/