On December 18, 2008, the Advance Medical Technology Association (“AdvaMed”), a medical device manufacturer trade association, issued a revised Code of Ethics on Interactions with Health Care Professionals (the “Revised Code”), which becomes effective July 1, 2009. In addition to the Revised Code, AdvaMed published a list of Frequently Asked Questions that aid in understanding the guidelines. This article examines some of the key revisions of the Revised Code.
Broader Scope
The Revised Code broadens the scope of affected persons and entities under the revision. First, the Revised Code now applies to any “Company” that develops, produces, manufactures, and markets medical technologies, not just companies that are members of AdvaMed. Second, the Revised Code has broadened the definition of Health Care Professionals (“HCPs”) to include any individuals or entities “involved in the provision of health care services and/or items to patients.” This includes not just health care practitioners but also persons who are involved in the decision to purchase, lease, or recommend medical technology, such as a practice manager.
Royalty Arrangements
The Revised Code now allows for companies to enter into royalty arrangements with HCPs in exchange for novel, significant, or innovative contributions that will improve medical technologies. The calculation of royalty payments should be based on factors that avoid improper influence. The Revised Code sets out examples of improper royalty payments: royalty payments should not be conditioned on a requirement that the HCP purchase, order, or recommend the technology or another product developed by the company offering the royalty payments. Further, the payments should not require the HCP to market the technology upon commercialization.
Limitations on Gifts and Entertainment
The Revised Code prohibits a company from providing any gifts that do not have a genuine educational function to HCPs. This includes gifts that have a minimal value such as pens and notepads branded with the company’s name. Although the Revised Code allows for Companies to provide HCPs with gifts that benefit a patient or have some educational value, such gifts, excluding textbooks or anatomical models, may not exceed $100. Additionally, a company may not provide or pay for any entertainment or recreational activities, even when the company engages HCPs as speakers or consultants.
Modest Meals
The Revised Code allows for Companies to provide modest meals to HCPs incidental to a bona fide presentation of scientific, educational, or business information rather than part of an entertainment or recreational event. These modest meals must take place in a setting that is conducive to such informational presentations. Moreover, the meals may only be provided for those who attend the presentation and have a bone fide interest in the presentation. Thus, friends or spouses of attendees would have to pay for any meal served if they attend such a presentation.
Evaluation and Demonstration Projects
AdvaMed recognizes that allowing HCPs to evaluate devices at no charge can be beneficial to patients and to the practitioners using the technology. Evaluation and demonstration devices can be either single-use devices or multi-use capital equipment. For single-use products, companies should limit the number of products provided free of charge to the amount reasonably necessary for the adequate evaluation of the products. This number may vary depending on such factors as the length of time necessary to evaluate the product and the number of HCPs being trained. Similarly multi-use equipment should only be furnished for a reasonable period of time necessary to evaluate the equipment.
Compliance with the Revised Code is discretionary. Nevertheless, AdvaMed strongly encourages all companies to annually certify that they have adopted the Revised Code and implemented an effective compliance program. Moreover, best practices from a regulatory perspective strongly encourage all vendors and practitioners to comply with the Revised Code. To encourage compliance, AdvaMed will publish on its website a list of those companies that have submitted this annual certification. In order to effectively avoid ethical and legal concerns, health care providers that interact with medical technology companies should review the guidelines that AdvaMed sets forth and develop safeguards to prevent potentially inappropriate behavior.
Seven Steps to Success
AdvaMed suggests that Companies take the following steps to help translate the Code into reality:
- Implement written policies and procedures.
- Designate a compliance officer and committee.
- Conduct effective training and education programs.
- Develop effective lines of communication such as anonymous reporting systems.
- Conduct internal monitoring and auditing.
- Enforce standards through well-publicized disciplinary guidelines.
- Respond promptly to detected problems and undertake corrective action.
Amita A. Sanghvi is an associate in the firm’s Healthcare Practice. Ms. Sanghvi recently worked as a public policy extern for a major pharmaceutical company where she analyzed federal and state legislation to determine the impact on the company’s business and developed position papers, reports and talking points on issues affecting electronic prescribing and evidence-based medicine for use by the company’s state and federal lobbyists. Ms. Sanghvi received her bachelor’s degree from the University of Rochester and both her law degree and master of health administration from the University of North Carolina at Chapel Hill.