Several recent settlements with pharmaceutical companies resolve federal investigations into alleged improper physician speaker programs and co-pay foundations. Are these programs dead, or can these cases serve as a new standard for conduct in the pharmaceutical industry?

The Speaker Program Cases

Speaker programs run by Novartis for a number of its brands were alleged to be sham excuses to pay bribes to physicians to increase prescriptions for targeted medicines, in violation of the Anti-Kickback Statute and the False Claims Act. Programs included lavish dinners and alcohol at expensive and inappropriate venues (often in violation of Novartis’ own policies), cash payments, free entertainment, physicians who were paid for programs they didn’t attend, or for attending the same program repeatedly. Much of this was allegedly done with the knowledge of senior management of the company. In this case, Novartis specifically admitted to much of the alleged conduct in its settlement agreement. Novartis further agreed that if it makes statements to the contrary (such as in a press release), this will be deemed to be a violation of the settlement. The company was criticized by DOJ for its compliance program discouraging employees from putting questions or concerns in writing: “If you don’t have to write it, don’t.  Consider using the phone.”