Last summer, when the Pharmaceutical Research and Manufacturers of America issued its Code on Interactions with Healthcare Professionals, there was some grumbling that medical device companies were still off the hook when it came to wooing docs with big-budget events and gifts. Not anymore. The device industry drafted its own set of ethical guidelines, which were released by Washington, D.C.-based Advanced Medical Technology Association this summer. The AdvaMed Code of Ethics on Interactions with Healthcare Professionals covers education and training of healthcare professionals, as well as sales and promotion, gifts, consultancies, and reimbursement support for new medical technologies. The final version will go into effect September 1.
Although it bears considerable likeness to the PhRMA Code, the AdvaMed Code also has a few striking differences. Elizabeth Carder-Thompson, partner, Reed Smith LLP, Washington, D.C., and who assisted AdvaMed in drafting the Code, says, "While the Office of Inspector General's anti-kickback guidance applies equally to the drug and device industries, these are very different industries. The association wanted to ensure that the differences were taken into account."
What's the Same?
Section 3 of the AdvaMed Code, which deals with supporting third-party educational conferences, reads much the same as the corresponding section of the PhRMA Code. The manufacturers can provide funding to support healthcare professionals' training, as long as they provide the subsidy directly to the meeting sponsor or educational institution. Control over content lies strictly with the meeting organizer in both codes, and both stipulate that the meeting's purpose must be to promote "objective scientific and educational activities and discourse." And while the PhRMA Code does not explicitly say so, both allow expenses to be supported financially. Both allow for meals and receptions, called "hospitality" in the AdvaMed Code, provided that such activities remains reasonable and subordinate to the purpose of the meeting.
While the PhRMA Code says that companies can't provide financial support directly to non-faculty healthcare professionals for third-party conferences, the AdvaMed Code only says that grants given to conference organizers could be used "to allow attendance" and "to reimburse the legitimate expenses for bona fide educational activities" for residents and others in training, without specifically mentioning travel, lodging, or personal expenses.
Both codes require gifts to healthcare professionals to be for the benefit of either patients or the person's practice. "Logoed golf balls are definitely out," says Carder-Thompson. While both say that items that benefit patients have be worth less than $100, the AdvaMed Code excludes textbooks and anatomical models from that rule.
There's no training section in the AdvaMed Code, but healthcare professional training is a different story. "There's a much greater need for hands-on training on surgical and other devices than there is for drugs," says Carder-Thompson.
The Food and Drug Administration often mandates training on some types of devices, and the AdvaMed Code details where and how training sessions can be held. While device companies can pay for "reasonable travel and lodging costs" for trainees, guests have to go on their own dime. However, the AdvaMed Code says it "may be appropriate for guests to participate in group hospitality, provided that the incremental costs … are nominal." "The PhRMA Code does not allow this, and AdvaMed does in the context of training meetings," she says. "Reasonable minds can differ on whether this is appropriate."
In both codes, it's permissible at promotional meetings. to provide occasional, modest meals for participants, but not for guests. The PhRMA Code states that "no entertainment/recreational events" may be offered, whereas the AdvaMed Code just says that "other occasional modest hospitality … that is conducive to the exchange of information" is acceptable. "The AdvaMed Code is not as specific on this point," says Carder-Thompson. "I know a number of companies that, even though the AdvaMed Code permits modest hospitality in the context of a sales meeting, aren't allowing it." The AdvaMed Code adds that device firms can pay "reasonable travel costs of attendees when necessary (e.g., for plant tours or demonstrations of nonportable equipment)." Travel is not mentioned in the PhRMA Code in this context.
Why Should You Care?
Other than preventing your company from landing on the front page of The New York Times as an example of industry run amok, there are other reasons you should comply with the new AdvaMed Code, which, like the PhRMA Code, is voluntary. While neither PhRMA nor AdvaMed will police the next meeting you support, the federal anti-kickback statute is a felony statute. Says Carder-Thompson, "The real policing in this case comes from the OIG."
How do the PhRMA and AdvaMed codes factor into this? The OIG Guidance that was released this spring states that adherence to the PhRMA Code, and presumably by extension the AdvaMed Code, should substantially reduce the risk of a manufacturer's being found to have violated the anti-kickback statute and other healthcare fraud and abuse laws, says Carder-Thompson. "While it's highly unlikely that the OIG is going to prosecute the gift of a fruit basket, ignoring the PhRMA or AdvaMed codes could indicate to the OIG that you are more interested in activities that could be viewed as problematic under the anti-kickback statute than in compliance."