In April, the Office of Inspector General released its Final Compliance Program Guidance for Pharmaceutical Manufacturers, designed to help drug and device firms comply with federal antikickback laws and other fraud and abuse statutes. One of the areas the guidance addresses is education grants, and there are major implications for firms’ relationships with continuing medical education (CME) providers.

First, the good news: Unlike the draft guidance, which made no distinction between promotional and educational activities, the final guidance reinforces the value of CME. After meeting with several groups of stakeholders, including the CME community, to gather feedback about the draft, “We realized that some of [manufacturers’] conduct may have certain benefits, such as providing medically useful education about their products," said Mary Riordan, Esq., senior counsel, OIG, US Department of Health and Human Services, Washington, DC. Riordan made her comments during a May 21 audioconference sponsored by the Pharmaceutical Compliance Forum. “The final guidance explicitly recognizes that pharmaceutical manufacturers often fund continuing medical education programs.”

Affording CME something of a safe harbor status, the guidance says: “Absent unusual circumstances, grants or support for educational activities sponsored and organized by medical professional organizations raise little risk of fraud or abuse, provided that the grant or support is not restricted or conditioned with respect to content or faculty."

The final guidance also recognizes existing guidelines regulating CME, stating that “manufacturers and sponsors of educational programs should be mindful of the relevant rules and regulations of the Food and Drug Administration. Codes of conduct promulgated by the CME industry may provide a useful starting point for manufacturers when reviewing their CME arrangements.”

CME Under Scrutiny

Nevertheless, CME is on the government's radar screen. "The OIG's main concern about such funding is that it not be used as a disguise to channel improper renumerations to physicians or others who may be in a position to generate business," said Riordan.

The advice for pharma and device firms is fairly obvious, says David J. Bloch, partner with Reed Smith LLP, a Washington, D.C.-based firm that represents pharma clients. "CME sponsorships should be structured in an appropriate arms-length transaction, providing funding for legitimate CME programs. The funding should go to the CME provider, and not to individual doctors. Funding should not be based or in any way tied to anybody’s purchase or referral of prescription drugs. None of that should be new to anybody.”

Separate Sales from Education

Here comes the potentially not-so-good news: To reduce the risk of inappropriate grant programs, the guidance advises manufacturers "to separate their grant-making functions from their sales and marketing functions." This represents a dramatic change and will present challenges to manufacturers, say experts.

Many companies still have the majority of CME funding driven by brand teams. But now, “under no circumstances should a company have brand teams making educational funding decisions independently of an internal process that involves an educational unit,” says Michael Saxton, an independent CME consultant based in Glen Gardner, New Jersey. Saxton has 23 years experience in the pharmaceutical industry, serving most recently as National Director, Clinical Education, with Pharmacia (now Pfizer). In fact, a number of companies have already moved in that direction, making the grant application process more stringent, and funneling requests for CME funds through a medical education or medical affairs unit. For more commentary, watch for the July/August issue of Medical Meetings.