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Revised AdvaMed code: New standards for interactions with the medical industry
Expect these guidelines to shape the scope of future interactions with technology companies.
The Advanced Medical Technology Association (AdvaMed) recently released a revised Code of Ethics on Interactions with Health Care Professionals which will become effective July 1. The revised code provides guidance on what conduct is appropriate and inappropriate between the medical technologies industry and health care professionals (HCPs).
It is the latest development in the medical technologies industry to promote and encourage compliance with applicable fraud and abuse laws. Not only does the revised code encourage companies to adopt its guidelines, but it goes a step further and encourages companies to adopt an effective compliance program, including the seven core elements of a compliance program outlined by the Office of the Inspector General.
AdvaMed intends to publish on its Web site a list of companies that have annually certified that they have adopted the revised code, have implemented an effective compliance program and the contact information for a company’s compliance department or anonymous hotline.
The revised code sets the standard for interactions between HCPs and companies that develop, produce, manufacture, and market medical technologies. It provides guidance on several new areas, such as royalty payments and evaluation and demonstration products, and takes a more rigorous position and provides more specific guidance on other conduct.
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Key revisions in the code include the following new guidelines:
Royalties
A new section provides guidance on the payment of royalties to HCPs who contribute to the improvement of a company’s medical technologies. It identifies criteria that companies should use when calculating royalty payments and determining when to enter into royalty agreements. Companies should enter into royalty arrangements only if the HCP is expected to make a substantive contribution.
The revised code also recommends that companies document any material contribution made by the HCP that affects his or her compensation. Royalty arrangements should otherwise comport with the revised code’s standards for consulting agreements.
Evaluation/demonstration products
Evaluation products are divided into two categories: single-use/disposables and multi-use/capital items.
Companies should provide the amount of single-use/ disposable products, without charge, necessary to evaluate the product.
The provision of multiple use/capital product without charge should be set forth in writing, be limited to the minimum period of time necessary to evaluate the product, and provide for the removal of product if the HCP does not lease/purchase the product at the end of evaluation period.
Entertainment and recreation
The revised code contains an absolute prohibition on providing or paying for any entertainment and recreation events or activities, such as sporting events or golf, for any HCPs who are not employees of the medical device company. This prohibition includes both the company itself and its employees and agents even when they pay for such entertainment events out-of-pocket.
The revised code also calls for strengthening certain existing guidelines, such as:
Product training, education
Companies should pay for an attendee’s reasonable travel and modest lodging costs only when out-of-town travel is required to facilitate the efficient delivery of training and education, and an objective basis exists for such training and education programs.
Modest refreshments/meals
Companies should no longer provide or sponsor receptions at third-party educational conferences, company-conducted product training and education sessions, consultant meetings, and at sales, promotional, and other business meetings. Instead, companies should only provide refreshments and modest meals in connection with such gatherings.
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The revisions clarify under what circumstances meals may be provided to bona fide business meetings: As an occasional business courtesy in connection with a bona fide presentation of scientific, educational or business information to those bona fide business meetings who attend the presentation.
This provision sets forth three perimeters: They should only be provided occasionally; they should only be provided to the staff who attend the meeting; and the meeting should have a substantial discussion or presentation of scientific, education or business information distinct from the development of good will and business relationships.
Research/educational grants and charitable donations
Companies are encouraged to adopt policies for making grants and donations, including establishing objective criteria, maintaining appropriate documentation, conducting due diligence regarding the bona fide nature of the charitable organization (if it is a charitable donation) and limiting sales and marketing personnel’s involvement in the selection process.
The scope of permissive grants and donations is limited to three categories: independent medical research grants with well-defined goals without any link to purchases (not unrestricted research grants); educational grants to organizations (not individual HCPs); and donations to bona fide charitable organizations.
Occasional gifts
The revisions limit the scope of permissive gifts to modest items that benefit patients, serve an education function and have a value of less than $100, except for medical textbooks or anatomical models used for educational purposes. Under no circumstances, are noneducational, branded promotional items, such as notepads and mugs, permissible. While patient starter kits are listed as appropriate gifts because they benefit patients, the code encourages companies to adopt policies to ensure that patient starter kits and similar items are not provided as an unlawful inducement.
Consulting arrangements
Permissible consulting service arrangements between companies and physicians include arrangements for product development, the development and/or transfer of intellectual property and marketing.
Companies may now base their selection of consultants on a professional’s experience with, usage of, or familiarity with a specific medical technology. Companies may also seek input from their sales personnel on a professional’s suitability if the personnel does not have the authority to make or unduly influence the decision to engage that person. Companies should, however, document the legitimate business need for each consulting arrangement.
Companies may reimburse reasonable and actual expenses that are documented and incurred as part of the consulting arrangement, ie, travel, modest meals, lodging, but should not offer recreation or entertainment in connection with consultant meetings.
The revised code also updates and expands certain existing guidelines, such as:
Third-party educational conferences
Companies should follow the applicable standards of the conference sponsor and any entity accrediting the educational activity. Conference sponsors are advised to retain independent control over the selection of conference presentations. Companies may also provide modest meals and refreshments directly to attending HCPs as long as they are offered to all those attending. A company may, however, offer meals and refreshments to fewer than all HCP attendees if the company can satisfy the revised code’s general guidelines for modest meals associated with business interactions. Meals and refreshments should be clearly separate from the continuing medical education portion of the conference.
Business meetings
The selection of locations and venues for sales, promotional and other business meetings mirror its guidance for training and educational meetings. As a result, facilities should be appropriate for, and conducive to, the meeting’s purpose. The revised code also clarifies that companies may have other business meetings with HCPs, meaning that meetings are no longer limited to sales and promotional meetings. Companies may also sponsor off-site sales, promotional or other business meeting that is ancillary to a third-party education conference as long as there is a legitimate business purpose for the off-site meeting and the company satisfies the applicable conference sponsor guidelines.
The revisions provide an expanded list of several permissive interactions for coverage, coding and reimbursement information and activities, such as helping obtain coverage and identifying the clinical value of a product, recognizing that obtaining coverage, coding and appropriate reimbursement for a product and associated procedure frequently involves input from, and collaboration with HCPs. The provisions clarify that companies should not interfere with clinical decision-making, and should not provide reimbursement support services as an unlawful inducement. Reimbursement support services, without charge, that eliminates a HCP’s overhead or other expense that the professional would otherwise incur may be inappropriate.
Conclusion
As companies adopt and implement the revised code, HCPs should expect to see these guidelines shaping the scope and nature of their interactions with medical technology companies. Health care professionals are encouraged to review the guidelines as helpful guidance on appropriate and appropriate interactions with industry, and to review the AdvaMed’s Web site to determine whether the companies with whom they interact have adopted the revised code and implemented an effective compliance program.
For more information:Reference:
- Nicole Liffrig Molife, JD and Anthony H Choe, JD, MPH, can be reached at Arnold & Porter LLP, 555 12th St. NW, Washington, DC 20004; e-mail: nicole.liffrig@aporter.com and anthony.choe@aporter.com.