Daiichi Sankyo: A Speaker Fee for a Canceled Talk

In the Daiichi Sankyo speaker program settlement, the company agreed to pay $39 million to resolve allegations that it used speaking fees and lavish meals to induce prescriptions for Azor, Benicar, Tribenzor and Welchol. The government alleged that some doctors received honoraria even when their talks had been canceled.

The Department of Justice announced the settlement on January 9, 2015. Daiichi Sankyo, a global pharmaceutical company with U.S. headquarters in New Jersey, agreed to pay the United States and state Medicaid programs. A former company sales representative brought a qui tam case under the False Claims Act.

The Programs Behind the Payments

Daiichi’s alleged speaker program kickbacks involved Physician Opinion & Discussion programs, or PODs, and other speaking events. The government’s announcement describes honoraria, meals and other benefits for physicians who participated, or supposedly participated, in them.

The settlement covered allegations involving Physician Opinion & Discussion programs from January 1, 2005, through March 31, 2011. The other speaker programs had a different period, January 1, 2004, through February 4, 2011. The four drugs tied the allegations together. The government said the payments induced prescriptions that resulted in false claims.

A speaker program puts the manufacturer behind both the physician’s fee and the audience’s meal. The commercial question is what that spending buys. Daiichi’s case concerned money allegedly directed at the prescribing decision, with an educational event as the occasion for paying it.

What Did the Honorarium Pay For?

The government alleged that Daiichi paid physicians despite events that lacked the speaking service or audience the payment appeared to buy.

Speaking to the Doctor’s Own Staff

Some honoraria recipients allegedly spoke only to their own staff in their own offices. The paid speaker and the audience already worked together. The audience’s relationship to the speaker was part of the government’s account of why the payment was allegedly a kickback.

Taking Turns Collecting a Fee

Physicians in the Physician Opinion & Discussion programs allegedly took turns receiving honoraria for duplicative discussions.

A Spouse in the Audience

The government also identified programs whose audience included the honorarium recipient’s spouse. The attendee’s relationship to the paid physician mattered to the allegation. An audience count alone would leave that relationship out.

A Canceled Talk With a Paid Speaker

Daiichi allegedly paid some honoraria recipients who did not speak because their events had been canceled beforehand. Here, the mismatch was especially plain: the speaking engagement disappeared, but the speaking fee survived.

Dinners Beyond the Company’s Own Limit

Daiichi’s dinners were allegedly lavish and sometimes ran past the company’s own limit of $140 per person.

Daiichi was accused of using both hospitality and speaking fees to induce prescriptions.

Why Would the Same Doctors Keep Coming Back?

Repeat attendance and rotating fees can make an educational program a recurring payment arrangement. In its November 16, 2020 Special Fraud Alert on speaker programs, the Department of Health and Human Services, Office of Inspector General identified repeat attendees and repeated programs on the same topic among the characteristics it considered suspect.

The alert also identified speaker selection influenced by sales or marketing, including selection based on past or expected revenue. It questioned programs held long after new medical information or a new indication gave doctors a reason to hear the material again. That gives Daiichi’s alleged duplicative discussions a broader commercial context: the subject can stay the same while the opportunity to collect a fee keeps returning.

How Do Pharmaceutical Kickbacks Work?

Pharmaceutical kickbacks work by paying or rewarding someone for directing business toward a drug or service. In Daiichi’s case, the government alleged that meals and honoraria induced doctors to prescribe its products, causing false claims to reach public health care programs.

The Anti-Kickback Statute addresses payments intended to influence prescribing or referrals for items covered by federal healthcare programs, including Medicare and Medicaid. A pharmacy or physician can submit the bill while the drugmaker pays to influence the prescription behind it. The allegation against Daiichi was that its payments caused the false claims. We examine what a payment bought under the kickback law’s safe harbors with insiders who know how the arrangement worked.

The 2017 analysis in the Journal of AHIMA, Busting Bad Medicine: A Call to Action Addressing Healthcare, Fraud, Waste, and Abuse, explains why physicians are targets for these arrangements: they decide which drugs patients use, which specialists they see and which services they receive. It also identifies patient steering and unfair competition among the consequences of kickbacks.

The alleged benefit to Daiichi was the doctor’s prescribing. Patients depended on that doctor’s medical judgment, and public programs paid the resulting claims. Taxpayers bore the cost, while drugmakers competing without kickbacks faced a rival allegedly paying for prescriptions. The event was where the company could put something of value into the hands of the person making the choice.

What a Sales Representative Could See

The former sales representative’s complaint started this case. That role puts the event details at the center of the story: who attended, what the discussion covered, whether the event happened and what the company paid.

For pharmaceutical whistleblowers, knowledge of those details can make a payment ledger intelligible. We examine how an event’s materials, attendance information, cancellation records and expense approvals fit together. We then connect that account to the prescribing and government-payment questions the case raises.

The distinction matters for a reader who knows only part of the business. An employee may understand why a payment went through after a cancellation without seeing the eventual prescription claims. Our work is to connect that inside account with the rest of the case.

The Justice Department announced that the former representative would receive $6.1 million from the federal recovery. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Same Disconnect in the Novartis Speaker Case

Novartis’s separate speaker-program settlement, announced on July 1, 2020, included admissions about repeated dinners and rotating paid speakers. The company’s admission reproduced in the government’s account of the settlement was direct:

Novartis also admitted that some sales representatives intended the honoraria to induce doctors to prescribe more of its drugs. Those admissions describe the same commercial question raised by Daiichi’s alleged canceled events and rotating fees: what did the company expect to receive when it paid the doctor?

You Know What Happened at the Event

If you saw speaking fees survive canceled talks or the same doctors take turns collecting honoraria, speak to one of our whistleblower experts. We work with you to build your strongest pharmaceutical kickback whistleblower case around what those payments bought, bring in pharmaceutical kickback whistleblower lawyers, and stay beside you through the case.