THE ALL-EXPENSES PAID trips to resorts in Puerto Rico and Florida for doctors and their spouses, including cruises, spa treatments, cash payments, and other perks — were organized by Parke-Davis under the guise of advisory board, consultant, and speaker training meetings. But the real purpose of the trips was to induce doctors to prescribe the epilepsy medication Neurontin for off-label uses and to recommend it to others. In other words, the trips were kickbacks under federal law.

Those are some of the charges made in a whistle-blower suit currently pending against Parke-Davis, according to court documents.

“People who have any responsibility for implementing the Office of Inspector General's [pharmaceutical marketing] guidance need to know about the Parke-Davis case, because I think it is a grocery list of the issues that the guidelines are intended to prevent,” said James Sheehan, assistant U.S. Attorney, chief, civil division, Eastern District of Pennsylvania, Philadelphia. Sheehan, who has litigated a number of prescription drug cases, made his remarks during the National Pharma Congress Audioconference held in September. The purpose of the conference, which was sponsored by the Pharmaceutical Compliance Forum, was to provide practical strategies for implementing the OIG guidance.

Consulting arrangements, such as the ones under investigation in the Parke-Davis case, are spotlighted as a high-risk area in the guidance. Sheehan, who clarified that he is not working on that specific case, explained the perspective federal prosecutors bring to these investigations. “Some companies have boards of consultants giving advice on how to sell the same product in 75 cities around the U.S. Each board has five people and they all meet in nice restaurants and they all get a nice check. It sure looks to me an awful lot like buying your market share.” He added that in white-collar crime, consultations are common vehicles for bribes, and prosecutors bring that background to drug kickback cases.

No Passive Participants

The OIG guidance states that “compensating physicians as consultants when they are expected to attend meetings or conferences primarily in a passive capacity is suspect.” So what should pharma companies do? One strategy is to take away from field reps the authority to make consultant arrangements, said audioconference panelist Marc Farley, assistant general counsel and compliance officer, Berlex Laboratories Inc., Mont-ville, N.J. Instead, he suggested that reps submit request forms where they must answer questions, such as: What is the reason for this arrangement? Why was this physician chosen? What is the special expertise of this person? By using these request forms, “You can really root out the funneling of money to somebody who's just going to show up for a weekend and do nothing,” Farley said. He also advised that companies keep minutes of each advisory board meeting.

Of course, in addition to paying doctors consultant fees, pharma firms also award healthcare professionals and institutions grants for education and other purposes. A potential problem, Farley said, is that “different units of the organization may be giving funding for speaking, consulting, or running clinical studies” with no one at the company tracking the total amount of funding being channeled to one physician.

His solution is one that will be familiar to pharma meeting planners who have centralized their company's meeting planning functions. “I think it is useful to maintain a comprehensive central database that compiles and sorts information about the aggregate number of grants and specific grantees,” Farley said. By cross-referencing information, pharma firms will be able to see how much they're paying each physician.

While panelists agreed that many companies are mandating more oversight of consultant and grant arrangements, Sheehan warned that “in some companies the fraud moves out to the edges. [Reps] not only try to fool the government about what's going on, they try to fool the people at headquarters.” If the company has instituted a policy whereby any payment of more than $250 needs to be reviewed, “then everything comes through at $249.”

Tough Training

That's why training is a critical component of any compliance effort. But how can you make such training effective?

“My experience is, if you sit down with sales reps and the OIG guidance and say, ‘Here are 40 pages from the Federal Register and you've got to comply with all of it,’ you're going to get yawns,” says Sheehan. Instead, trainers should talk about court cases such as Parke-Davis and TAP, pointing out “the consequences to individual reps: criminal conviction and destruction of their professional lives.”

But it takes two to transact a bribe. Physicians, as well as pharma employees, have faced criminal prosecution under kickback laws. However, Sheehan said many physicians are unaware of the American Medical Association's Ethical Opinion on Gifts to Physicians from Industry. Pharma firms need to teach physicians as well as reps about the rules. “Unless the company makes the decision to communicate with the physicians as well as the reps, it's going to be very difficult to make these policies stick.”

Device Companies: Heads Up

Asked about areas that are not in the OIG guidance but that companies should address, Sheehan said, “There is no [detailed] discussion in the guidance about devices and equipment, but I think that is the next generation of these issues. In my experience, because the device companies tend to be smaller and because the product cycle tends to be shorter, exposure to risks of violating the anti-kickback act are even greater.”