From California to Massachusetts, states are implementing laws that regulate how pharma and medical device companies interact with physicians.
A flood of new state laws now strictly regulates pharmaceutical and medical device companies' interactions with healthcare professionals, and more are on the way. Unlike the Pharmaceutical Research and Manufacturers of America and AdvaMed codes on interactions with healthcare professionals, which are voluntary, these state laws include fines and penalties for noncompliance. And now Congress is considering the Physician Payments Sunshine Act of 2009, which would also require that aggregate spend for everything from educational funding and honoraria to meals and travel be registered in a national and publicly accessible online database.
Medical Meetings asked four regulatory and compliance experts their views on this increasing regulatory scrutiny of the medical meetings industry, as well as their advice on how to deal with what lies ahead. William M. Mandell is leader of the health law practice at Pierce & Mandell P.C. in Boston. Marjorie E. Powell is senior assistant general counsel for PhRMA, Washington, D.C. Michael Manthei is a partner at Holland & Knight LLP in Boston. And Retta M. Riordan is president of Riordan Consulting LLC, in Westfield, N.J.
MM: What trends do you predict in the near future regarding state laws regulating pharmaceutical and medical device marketing practices? For instance, do you see the Massachusetts law setting a new standard?
Riordan: The major trend that I have seen is a requirement for transparency. If I had to choose three topics that everyone needs to be cognizant of, they would be transparency, transparency, transparency. It is now the key to legislative action and enforcement, and everyone is trying to figure out how to be as transparent as possible.
The second trend is for requirements to ensure that the science is kept pure, that CME programs are kept independent, and that the physician's independent judgment is not swayed at any cost.
Another trend is for the states to take voluntary guidances and enact them into law. For example, California enacted into law the [Office of Inspector General of the Department of Health and Human Services Final Compliance Program Guidance for Pharmaceutical Manufacturers] and the PhRMA code. Neither was drafted with the intent that it become law. If you read the OIG guidance carefully, you realize that the document is aspirational in nature. The word “should” appears in almost every provision; while only once or twice does the word “must” appear. And the PhRMA code was intended as voluntary guidance for member companies, so that even within its own membership, the code was voluntary and not every member had adopted it.
Mandell: I think the general direction we're headed in is toward increased state-level regulation of interactions between pharmaceutical and medical device companies and healthcare professionals. The Massachusetts law to date is the most comprehensive law on the books, but many other states are considering their own versions of a state regulatory scheme to regulate industry's relationship with medicine and industry marketing.
The paradigm change that's happening so rapidly and that we're all trying to catch up with is that the pressure to change marketing practices is now resulting not only in the industry trying to police itself through voluntary efforts, but also in the states passing laws to legally mandate reforms or to prohibit certain marketing practices, including gifts and other interactions.
The essence of the Massachusetts system in effect now and the potential of the federal system under the Sunshine Act, if it's enacted, is to use transparency as a check-and-balance. The idea is that if more information and data are known by the public, the media, public health enforcers, and advocates, then conflicts can be better understood, managed, and addressed. I think other states that are working on legislation are also thinking of it in terms of creating transparency.
MM: Do you expect more state and federal government scrutiny of medical meetings?
Riordan: I think that we are going to see greater scrutiny of meetings. Until a few years ago, CME programs were deemed to be sacrosanct; they were the gold standard. But in recent years — and I think this may have really started when Sen. Grassley began investigating medical education grants — these types of programs have been undergoing intense scrutiny. Government — both state and federal — has been sending the message that several things have to happen. CME programs have to be independent. They can't be tainted by bias in areas such as selection of topics and selection of speakers. They have to be free from undue external influences. Transparency has to be in evidence. The programs have to be fair and balanced.
Mandell: The essence of the reform movement is to shed light on interactions and to prevent what I call “stealth marketing.” That's where these laws are drawing the line.
No one is suggesting that the ads or the exhibit hall be stopped. You may not be able to give out gifts, but you certainly can be there to give information and explain your product. Everyone knows that what happens in the exhibit hall is a commercial presentation by a company. And everyone knows that when you open a journal, an ad is an ad. The essence of the regulation is to have what is truly marketing be labeled and identified as marketing, and to preserve the independence of what purports to be independent, educational, clinical, or research information.
MM: What effect do you think the Obama administration and the healthcare reform movement are going to have on regulations involving pharmaceutical and device marketing, CME, and medical meetings?
Powell: I would anticipate that as healthcare reform moves forward, there is going to be increasing concern with how everybody in the healthcare system keeps up with all developments in treatments. There has, for example, been a lot of discussion of comparative effectiveness research — not just for drugs, but also for all kinds of treatments. For comparative effectiveness research to be beneficial, everybody in the healthcare system has to learn the results of the research.
There will be some focus on pharmaceutical company and medical device company support for CME, but I don't think it's going to be solely focused on funding.There are going to be efforts to make sure that, for example, the educational program is geared toward adult learners and the various ways that they learn, as well as being efficient in terms of time and not just expense.
MM: Do you expect the Physician Payments Sunshine Act to pass this year? If so, what effect will it have on current and future state legislation? The Act says it would preempt state laws, unless they have additional requirements.
Riordan: I think in any other year it probably would have passed, but Congress has its hands full this year with the economy, the wars in Iraq and Afghanistan, healthcare reform, and other pressing matters.
If the Sunshine Act does pass, it will probably not be a panacea. As it stands right now, the preemption provision would be ineffective because basically what it would do is set a floor for state laws, and the states would still be able to enact any laws that had not already been covered in the federal law. Without effective preemption, I think we could end up with not one overarching law, but 52 separate ones — the 50 states', plus the District of Columbia's, plus federal law. That would present challenges for everyone in terms of monitoring the developments, and tracking and reporting spending.
If all vested parties could sit down with Congressional staff and work out language that provides for an effective preemption, it would be far better than the preemption as it stands right now.
Manthei: Assuming the Sunshine Act passes in its current form, it won't achieve what one would expect federal legislation to achieve, which is a uniform standard applicable to all manufacturers throughout the country. Instead, manufacturers would have to monitor all state and federal laws and have individual compliance programs and internal controls available for individual states. This would increase the cost of compliance and ultimately increase the cost of drugs and devices.
Continue on Page 2I think if we're going to tighten the regulations around sales and marketing activities for pharmaceutical and medical device manufacturers, it should be uniform.
MM: The Massachusetts law says that CME providers must follow the Accreditation Council for CME Standards for Commercial Support. But the state provisions are laws, rather than standards for accreditation. Do you think these laws will result in more government scrutiny of accredited CME? What advice do you have for CME providers?
Riordan: To the extent that CME providers are already well-versed in and are following the ACCME standards and continue to do so, they should be fine. I'd advise that they keep solid records with regard to following the standards, particularly in the new and revised areas such as absolute independence.
Any time a voluntary standard is elevated to a law, it certainly raises the bar. ACCME's hammer is that a provider won't be accredited if the standards aren't followed. Now, Massachusetts has a bigger hammer because of the law. Of course, from a practical standpoint, if a prohibition is only in one state, a sponsor can certainly select an alternate venue.
Mandell: If you have good practices for ensuring the independence of the content of your CME events, which you should have been doing all along, and you continue to follow those practices and have a good open dialogue with your commercial supporters about ensuring that they're following those standards, there really don't have to be a lot of dramatic changes, notwithstanding the greater amount of government interest and scrutiny as well as passage of laws and regulations that require things that used to be voluntary.
It's a matter of knowing what the laws say and making sure that you enhance existing good practices. Maybe it makes sense to revisit your more informal policy documents and formalize them, clarify them, and make sure that your commercial supporters understand them. But there really doesn't have to be a great amount of anxiety that somehow the government is going to cut off commercial funding.
MM: What about the jurisdiction of state laws? Must planners consider the state of origin of the participants?
Powell: Massachusetts, in an FAQ document, said the Massachusetts requirements follow the physician. So if you're holding a meeting in another state, you have to ask everybody if they hold a license in Massachusetts — not just where they practice, but where they hold a license. Many physicians are licensed in more than one state.
I think it's going to be important for CME providers to know where their attendees are licensed and to have knowledge of what the restrictions are for the companies from which they're seeking funding for a particular CME program. Now, I don't know whether the state enforcement agencies will start looking at CME providers, but I think the pharmaceutical companies are going to be looking more carefully because they're the ones who face the penalties if they fail to comply with state reporting laws.
Mandell: The Massachusetts Department of Health has said that we need to make sure that the medical convention community and trade associations understand and get the word out to their members that this law applies to interactions that happen outside Massachusetts.
That creates a compliance challenge for the companies. Do they apply the most stringent standards that Massachusetts has come up with to everybody for simplicity's sake? Or do they differentiate between how they interact with the Massachusetts doctors and the other doctors? As more states come up with other variations on regulating this area, it will become challenging and administratively complex if you're trying to follow each state's different rules.
The bottom line is that industry support is not going to be outlawed. The best approach is to follow the AdvaMed and PhRMA codes, be compliant with all applicable laws, and have a firewall between the industry funders and the physician leaders and organizers who decide on CME content and the selection of presenters.
MM: What do you see as the potential unintended consequences of these laws for CME and medical meetings?
Manthei: If we had a situation such as is being proposed in certain quarters, which is to eliminate all manufacturer money from the funding of medical education programs, there would be no money. If you said, well, we're just going to eliminate all manufacturer money from this, then where is the funding going to come from? It's going to come out of the pockets of doctors, who have to pay to go to their own conferences, or the conferences would be much more expensive or much less frequent.”
Also, because the demands are going to be so great on CME providers, they're going to have to get bigger organizationally in order to meet those demands. So you could see a lot of smaller meeting planning organizations getting rolled up into larger organizations. Consolidation may be an unintended consequence — one that hasn't really been talked about in the industry.
This is not a prediction on my part, but I think initially regulation has the potential to choke the flow of scientific information. If you make having CME more complicated, more difficult, more fraught with risk and administrative burden, then I think it could tend to decrease the number and availability of high-quality programs, which over time could mean a contraction in the flow of information.
MM: What do you see as the role of medical conference planners in helping companies deal with aggregate spend disclosure requirements? What can they do to help their companies collect accurate, consistent data?
Powell: Conference planners are going to have to make sure that they have systems in place that appropriately allocate costs and appropriately capture [a list of] who attended the meeting. This could mean distinguishing people who did show up from those who preregistered but didn't show up. Companies may decide to work with a physician's state license number (or numbers, if licensed in more than one state).
Then there may be different ways of calculating spend. For example, if I serve a meal, do I divide the cost of the meal among everybody who is in attendance? What if I've guaranteed 50 people for a meal and only 45 show up? Do I divide the total cost of the meal by 45, or do I allocate to each person the per-person cost excluding the five meals that weren't eaten? This will vary by company, depending on how they've set up their programs. But meeting planners will need to be careful to comply with the company's internal requirements.
Manthei: Companies need to have a documented internal compliance program that addresses all of the issues under the various laws. Just getting the data organized in a meaningful way is difficult and expensive. I think the industry is grappling with two major issues in this regard.
First, how do you collect the information in a way that's going to make the data easily accessible and usable for the ultimate purpose of making these reports and complying with different state and federal statutes that may ultimately be enacted? There are a lot of vendors trying to come up with tools and solutions. But there doesn't yet seem to be any kind of predominating software or process. There's no standardization.
Second, is it better for the manufacturers to do all the monitoring? Or do they want to outsource it to the conference planners or to some third-party organization that's going to track the data and report back? I think it will differ by company. Big manufacturers may want to have control of all of it because the risk to them is very broad and potentially very deep. They're going to make sure that they're contributing money in support of CME in an appropriate way. For the smaller manufacturers, I think it may be a lot more difficult.
Continue on Page 3MM: What should CME providers and medical meeting professionals do to make sure their concerns are heard by legislators?
Riordan: I don't see that an all-out onslaught on state legislatures is necessary at this time. I would suggest a more reasoned approach may be in order. For example, as states begin considering legislation that could adversely affect bona fide medical meetings, advocates could meet with their legislators to ensure that they understand why medical meetings are critical to understanding advances in medicine and treatment, and ultimately to patients. It's important to remember that state legislative sessions are short — some last only months. Therefore, the bills are going to move fast, if they move at all. So now is the time for organizations that are affected by medical meetings to get talking points prepared and have them ready for the 2010 legislative sessions.
Powell: Both PhRMA and, in a number of states, individual sales representatives have talked with legislators. And company compliance officers may also reach out to legislators and explain the PhRMA code program to them. Also, once legislators realize that more than 70 percent of all scrips are filled with generic drugs because states have generic substitution laws, they realize that patients are largely getting generics unless there is not a generic available. And once they realize the cost-saving argument is not accurate, many legislators are not all that sure that this kind of legislation actually makes sense.
Most state legislators are receptive to the argument that marketing-cost-reporting legislation does not improve healthcare for anybody in the state, it adds an administrative burden to the state, and it won't reduce the state's costs. So I expect to see continuing legislation in states, but I don't expect that there will be an increase from the one or two states that have been enacting legislation each year.
Mandell: I think medical conference planners should keep an eye on what's happening on the federal level, but accept the reality that the genie is already out of the bottle on regulating this at the state level, and more and more states are going to consider laws. They can join forces with organizations at the state level that promote economic activity at events to help educate legislators and regulators who may, with all the best intentions, want to jump on the regulatory bandwagon, but may not really understand the realities of how CME events and other scientific conferences work.
Once a state proposes a law or regulation, there's a public comment period. And that's an opportunity for event organizers to make sure that states that are contemplating getting into regulation do it in a fair and balanced way.
William M. Mandell
Leader of Health
Law Practice
Pierce & Mandell P.C.
Boston
Michael Manthei
Partner
Holland & Knight LLP
Boston
Marjorie E. Powell
Senior Assistant
General Council
PhRMA
Washington
Retta M. Riordan
President
Riordan Consulting LLC
Westfield, N.J.
The Massachusetts Department of Public Health has posted a list of frequently asked questions about its regulation of pharmaceutical or medical device manufacturing company (PMDMC) conduct. Here are a few that apply specifically to CME and medical meetings (see the full FAQ list at www.mass.gov):
Q: Are restaurants in hotels considered by DPH to be appropriate facilities for meals in conjunction with CME or other third-party scientific, educational or professional meetings or conferences?
A: Yes, such meals may be provided in hotel restaurants.
Q: Does a CME program have to be ACCME-accredited?
A: No. The program itself need not be accredited by ACCME, but if it receives support from a pharmaceutical or medical device manufacturing company, the commercial support must comply with the ACCME Standards for Commercial Support.
Q: Is a conference or event organizer free to request and dispense funds as they feel appropriate for implementation of their own conference?
A: Yes, other than compliance with ACCME Standards for Commercial Support, the regulations do not regulate the manner in which event organizers use their funds.
Q: Is DPH going to expect a report on payments to third-party scientific or educational conference or meeting organizers?
A: No. PMDMCs need not report payments to third-party scientific, educational or professional meeting organizers unless the meeting organizer is a covered recipient.