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Recent Aqua Pharmaceuticals Settlement Highlights Continued Focus on Speaker Programs and State Investigations

Last week, it was announced that the drugmaker formerly known as Aqua Pharmaceuticals, LLC (now Almirall, LLC) has agreed to pay $3.5 million to settle kickback claims stemming from a qui tam whistleblower suit brought by a former sales representative. Among the allegations were that Aqua improperly provided meals, tickets, gift cards and speaking engagements to dermatologists in exchange for prescribing Aqua’s products. While providing prescribers items of value (such as meals, tickets to sporting events, and gift cards) has long been a target of government investigations and False Claims Act prosecutions, this case is significant as it once again highlights the government’s focus on speaking engagements, and reiterates the importance of firms to have a sound compliance protocol when it comes to establishing speaker programs.

Speaker programs have long been utilized to legitimately educate prescribers and others within the medical community about certain products and services that may be offered. Peer-to-peer education – particularly in the medical community – can serve as the most effective way to foster knowledge and shape prescribing patterns. Moreover, hiring expert physicians to consult or advocate extends beyond major pharmaceutical manufacturers, and has been utilized by many companies within the healthcare and life sciences continuum, including pharmacies, laboratories, testing companies and the like.   

However, in establishing speaker programs, there are many risks and concerns. Not only has the government displayed a hearty appetite for going after firms who cross the line between legitimate peer education to payment for referrals (i.e., offering lucrative speaking engagements in exchange for prescriptions), but there are many other areas requiring nuanced compliance, including:

  • Fair Market Value and Commercial Reasonableness requirements
  • State law open payments and transparency requirements
  • Off-label promotion risks
  • Evolving education modalities, including virtual, teleconference, and office-based engagements
  • Interrelationships between medical affairs and sales teams
  • Involvement of midlevel practitioners, including nurse practitioners, physician assistants and registered nurses

In light of the recent Aqua settlement, it is extremely important that healthcare and life sciences organizations have effective compliance measures in place that keep up with these changing requirements.

Another key takeaway from this case relates to the fact that the federal government was not alone in prosecuting the firm. As part of a growing trend, the California Department of Insurance conducted its own investigation, and reached a separate settlement with Aqua for an additional $3.1 million. This raises additional concerns for pharmaceutical manufacturers and life sciences companies, to ensure compliance with both federal and state guidelines.

Frier Levitt routinely represents healthcare and life sciences companies in forming compliance plans and developing legally sound speaker programs.  We can help steer your company to ensure compliance with Federal and State requirements. Contact Frier Levitt today to speak to an attorney.