I think an agreement starts to become suspicious long before anything blatantly illegal happens. There can sometimes be early warning signs:

1. When the deliverables are vague or unnecessary.
If the scope of work is poorly defined, like providing “general advice,” “thought leadership,” “ongoing support”, it raises concerns about whether the person is actually being paid for work or simply being paid to influence purchasing decisions.

2. When compensation doesn’t match the effort.
Oversized hourly rates, large retainers, or payments that don’t align with industry norms suggest the compensation may be a kickback rather than a fair market exchange.

3. When the physician is selected for their prescribing or purchasing volume.
If the primary value a physician brings is their ability to generate sales, not their expertise or experience, the arrangement already becomes risky.

4. When deliverables exist only on paper.
If the company’s files contain contracts, but no recorded meetings, no written reports, no prototypes reviewed, or no actual outputs, enforcement agencies can view that as a major red flag.

In my opinion, the threshold for “suspicious” is reached as soon as the agreement stops showing a clear, documentable exchange of value. That’s when legal risk increases, even if no one explicitly intends wrongdoing.

I agree with all the pints made in the earlier post but I think there is one more point that makes a consultation agreement suspicious enough to risk legal consequences. I think that if a physician makes a decision that clearly benefits the medical device company immediately before receiving the consultation agreement then that is suspicious. If for example, a physician purchases a number of a companies devices, or speaks positively of them publicly, and then a week later receives a consultation offer, then that would definitely be suspicious enough in my opinion to be risking legal consequences. Of course, there is some blurriness as to what counts as soon. 

A consulting agreement in medical device development becomes a red flag when it lacks clear, justifiable, and necessary deliverables. A primary concern is if the compensation paid to a clinician or physician-consultant exceeds fair market value, suggesting the payment is an inducement rather than a service fee. Agreements are suspect if the consultant's expected work is vague or involves no documented output, hinting at a potential sham arrangement to secure referrals. Another major red flag involves Intellectual Property (IP) ownership, particularly if the contract fails to unequivocally assign all new device-related inventions created during the consultancy to the developing company. The inclusion of clauses that limit the client's ability to terminate the agreement without significant penalty, even for underperformance, is also highly unfavorable. Excessive or non-transparent expense reimbursement may signal an attempt to provide undisclosed financial benefits to a referral source. Ultimately, any contract where the primary benefit appears to be influencing purchasing decisions rather than genuine technical or clinical guidance should be scrutinized carefully for compliance risks.

A consulting agreement could become risky (legally) when the arrangment stops looking like an actual need for expertise and more like a financial relationship that is tied to clinical influence. In practice, the turning point would most likely appear when the company can no longer clearly explain why a consultant is needed and what specific value is being provided. If a role doesn't connect to an identifiable project, regulators could interpret the agreement as an attempt to secure loyalty rather than expertise. Additionally, another major warning sign is when the timing of payments coincides with changes in the physician's purchasing or prescribing attitude/behavior; even if it is not intentional. At the end of the day, risk merges when the arrangement cannot stand on its own as a defensible, project driven engagement, which can be when oversight agencies tend to get involved.

One thing I think hasn’t been mentioned yet is that a consulting agreement can become risky even when the contract itself looks perfectly compliant. Regulators don’t just look at what’s written, they look at how the relationship actually plays out daily.

If the physician is regularly pulled into informal discussions, asked for “quick feedback” that never gets documented, or given insider access that doesn’t match the stated deliverables, the agreement starts functioning more like an influence tool than a real consulting role. So for me, the red flag appears when the actual behavior no longer matches the contract’s stated purpose, even if no one intended wrongdoing.

I’m curious how companies can realistically monitor this, should there be routine check-ins to make sure the engagement is still aligned with the original intent?

I agree with what everyone has said so far. However, I think red flags can appear before you even look at the deliverables or compensation. The company’s internal behavior can be a telling sign of suspicious consulting agreements. For example, when people avoid putting things in writing in the company. If managers insist on handling everything verbally instead of written communication like email, or if they tell junior employees not to document certain things, then a clear red flag is seen. The moment people do not want a paper trail, suspicion should definitely go up. If this goes on, legal consequences could occur. In my opinion, if things are purposely omitted from being written down, legal consequences should occur at that point, as this would prevent further, larger fraud from being committed. 

There is a clear red flag when a contract is treated as a formality instead of a business need. This includes trying to get someone a contract as soon as possible, not specifying exactly what business needs this contract will fulfill, besides obtaining more money. This is a point that Andy brought up, and I agree with what he has said as well. Speediness in sending out contracts and getting them signed solely to increase the quantity of contracts is a red flag, and it ties well into his point regarding how contracts that become financially focused instead of focused on clinical expertise are also a red flag. 

Additionally, when internal employees do not understand the consultant’s role, a red flag is seen. Any genuine disconnects in communication that cannot be answered by a large number of members in the team raise suspicion. Ultimately, legal risk comes into play the moment that internal business behavior stops resembling normal business practices. The company’s own actions can be looked at before a contract is even made to see if it will end up becoming legally concerning. Do you think most red flags appear inside the company before a contract goes out, or do the risks only fully show up after a contract is signed? Should there be more regulation before signing a contract in order to prevent any future issues? How would this work out?