By Christopher P. Young, Editor, G2 Compliance Advisor
Pharmaceutical company Daiichi Sankyo Inc. paid $39 million and agreed to enter into a five-year Corporate Integrity Agreement to settle government allegations of using speaker fees and lavish dinners as a means to reward doctors for prescribing its drugs.
This is not a new method of paying kickbacks for pharmaceutical companies, but some specialty and innovative laboratories have adopted this marketing technique in recent years. Molecular diagnostic and genetic laboratories and companies that have developed unique approaches or controversial testing such as Health Diagnostic Laboratories, currently under investigation for other allegations, use this or a variation of it, in their marketing and sales programs.
In Daiichi’s case, according to the Department of Justice press release, the company operated a program called Physician Organization and Discussion program (POD) to arrange venues for the physician speakers. In some cases, a physician was paid to speak to his own staff in his own office. Another case described a dinner so lavish that it cost more than $140 per person exceeding Daiichi’s own internal cost limit.
U.S. Attorney Carmen Ortiz for the District of Massachusetts said, “Settlements like this one show that the government will continue to pursue health care companies that use kickbacks to promote their products.”
It is not illegal to employ physicians as expert speakers but it is important, particularly if the physician refers tests to your laboratory, that you structure your program in a compliant manner. Make sure it is not under the control of any marketing and sales function and whatever fees are paid are at fair market value as established by a credible process or third party.