If you're wondering just how seriously the pharmaceutical industry is taking the new ethical code issued by the Pharmaceutical Research and Manufacturers of America (PhRMA), consider this example: At Pharmacia Corp.'s annual meeting in Chicago this past April, a shareholder stood up and expressed her concerns about the relationships between industry and physicians, criticizing both parties. Fred Hassan, Pharmacia chairman and CEO, and chair of PhRMA's board of directors, told her that the industry was in the process of adopting a new code that would address her concerns.

Three months after the shareholder's meeting, on July 1, PhRMA's Code on Interactions with Health Care Professionals went into effect. Pharmacia employees must comply with the code or face serious repercussions, including termination. Pharmacia is just one example; other firms are rolling out similar compliance programs.

Besieged by the growing public and media outcry against its marketing practices, and by high-profile bribery, kickback, and fraud cases, and facing the threat of government regulation, the drug industry finally took action. “It's not news to anybody that there's been a lot of negative coverage about the industry,” says Ursula B. Bartels, senior vice-president, general counsel and secretary, Boehringer Ingelheim Pharmaceuticals Inc., Ridgefield, Conn. “It was time to take a step in a positive direction.” Bartels, who is the immediate past chair of PhRMA's law section, which spearheaded the code, continues, “This code was unanimously adopted by the executive committee of PhRMA's board. The commitment level is there.”

Hands-Off CME

As we reported in, “Thumbs Up for New Pharma Ethics Code,” June issue, page 9, the code replaces PhRMA's decade-old original ethical code developed in reaction to the then-new American Medical Association's Ethical Opinion on Gifts to Physicians from Industry. The new code (available online at www.phrma.org) not only covers the most flagrant ethical violations in physician/industry relations — for example, it forbids drug firms from paying doctors to increase their prescribing of company products — but it also specifically addresses CME.

“It re-emphasizes that educational grants for CME are hands-off and that, regardless of financial support, control of CME program content remains with the CME sponsor,” says Bartels.

It's no coincidence that the code is consistent with current AMA and Accreditation Council for CME guidelines, she says. “The CME community has had the right standards for a long time. These standards have been effective and have stood the test of time. We designed this code to make sense with those other pieces.”

As CME leaders have pointed out, PhRMA's code is actually stricter and more specific in some areas. For instance, under the code, drug companies are not allowed to pay for any type of entertainment for doctors.

Under the AMA guidelines, however, doctors are allowed to accept subsidies for social events held as part of a meeting. Whether those rather vague guidelines allow for golf games, baseball games, theater tickets, concerts, etc., has been the subject of fiery debate at the annual AMA Conference on CME Provider/Industry Collaboration. Under PhRMA's code, there's no debate.

PhRMA Woos CME Community

PhRMA has reached out to the CME community. John T. Kelly, MD, PhD, vice president, scientific and regulatory affairs, PhRMA, discussed the code via telephone at a meeting of the AMA's National Task Force on CME Provider/Industry Collaboration in June. While some task force members also represent the pharma industry, “It has been several years since PhRMA leadership addressed the task force,” says Robert F. Orsetti, vice president, healthcare education department, Jobson Education Group, Colorado and New Jersey. “[The code] is one of the most important messages received in a long time. It's a call to cooperation between the CME community and industry. It brings all the players closer together, as opposed to having widely divergent views on ethical compliance.”

Adds Frederic S. Wilson, director of professional relations, Procter & Gamble Pharmaceuticals, Mason, Ohio. “In addition to the ACCME and AMA guidelines, now we have a third layer of essentially the same ethical guidelines from PhRMA. If the combination of those three influences doesn't encourage the pharmaceutical companies to walk the straight and narrow — I just don't understand.”

The academic CME community also applauds the code. Barbara Barnes, MD, associate dean, continuing education, University of Pittsburgh School of Medicine, and immediate past president, Society for Academic CME, says “I give the industry credit for taking a stand and coming up with a really comprehensive document.”

CME Out in the Cold?

While CME providers are positive about the code, they do have a number of concerns and questions. The biggest concern is that some pharma companies, reacting to the code even before it took effect, reduced or postponed their support of CME, or added much more stringent requirements for CME funds. Providers are experiencing huge delays in funding, longer turnaround times, and problems with getting their letters of agreement signed. In one case, when the rep turned in her grant request, the company denied it — even though the program had been scheduled and the funds approved. It was the rep's first interaction with the CME provider — and she was mortified, the provider says.

Providers also report that some companies have centralized CME, so that reps no longer have discretion to approve grants, but must forward the information to a main office that handles all grant requests. The process is confusing, inconsistent, and frustrating, say providers.

“It disrupts not only my relationships but the reps' access to my hospital-based physicians,” says Melinda Burdette, coordinator, CME, Mercer University School of Medicine, Macon, Ga. “You're one pharmaceutical company amongst many, and if I have to change the way I request money from your company for a $300 or $500 dollar exhibit fee, it may not be worth my time. But a $500 exhibit fee for a program that will get anywhere from 100 to 200 physicians is really an incredible return on investment for the pharma firm.”

Three providers mentioned problems with Merck. Greg Thomas, vice president, professional education and industry relations, American Academy of Physician Assistants, Alexandria, Va., was told by his contact at the national professional affairs office of Merck U.S. Human Health that the company was only funding ACCME-accredited organizations — which leaves out state-accredited CME providers and non-physician groups. The situation was temporary, he was told.

Apparently the limited funding policy was an interim measure. Merck spokesperson Jan Weiner responded that the company has created a dedicated, centralized CE department and will continue to support CME for ACCME accredited organizations, as well as for other accredited groups — and will support CE for allied healthcare professionals.

Michael S. Saxton, head, academic affairs, Pharmacia, Peapack, N.J., agrees with providers that the solution is not overcentralization, but partnership and training. “If you overly centralize funding, it can reduce the ability of representatives to work with local CME sponsors. We should try to pursue anything that results in more partnership with CME, not less.” He adds a caveat: “I'm not speaking for the company here; I'm getting into a level of detail that we've not addressed.”

Orsetti advises providers to stay calm. “There is no need to panic. All pharmaceutical companies are trying to figure out how to best apply the code. Of course the attorneys are likely to suggest a conservative approach. For awhile, they're going to retrench, especially after the national TV [Peter Jennings] exposé.”

Meanwhile, Wilson of Procter & Gamble advises providers to “start asking other companies that have interest in the same therapeutic areas if they'd like to step up and fill in.”

Who Gets the Money?

Despite those worrisome developments, some speculate the code will eventually drive more support of CME. “I would see absolutely no reason under this code for a company to pull back on CME,” says Bartels. “It's probably the opposite.” Wilson forecasts: “The promotional dinner meetings for physicians with spouses will be replaced, at least in part, by CME activities.”

Kevin A. Wohlfort, director, development, industry relations, and exhibits, American Urological Association Inc., Baltimore, predicts that “solid medical specialty associations who have quality products have a chance at gaining.” He encourages providers to think proactively.

For instance, “AUA has lots of enduring materials, such as highlights of our annual meetings on CD-ROM. And they are valued under a $100 unit price [the value of giveaways allowed under the code]. If those products can be a giveaway at a company's exhibit booth during the annual meeting, that would not only help the AUA in terms of revenue, but it would also help the company out because they have a good educational product to attract traffic to their booth.”

But Where Are the Teeth?

But those potential positive outcomes depend on companies adhering to the code, which, like the AMA ethical standard for physicians, is voluntary. Once again, CME providers are in the position of trying to enforce codes that have no penalties for violations. “We're the ones on the front line,” says Pat A. Masters, director, CME, Eastern Virginia Medical School in Norfolk. “We meet the doctors and the reps; we're the ones whose ACCME accreditation is at risk.”

While many providers agree with Masters, Barnes presents an alternative view. “I think that as professionals, whether we are on the business side or the provider side, we would prefer voluntary guidelines rather than government regulations.”

The decision to make the code voluntary was a legal one, explains David J. Bloch, attorney at law, Reed Smith Shaw & McClay LLP, Washington, D.C. Bloch, who represents pharmaceutical firms, says, “There's no real way for industry to make it mandatory — antitrust law generally prohibits large swathes of industry getting together and deciding ‘this is how we're all going to conduct business.’”

Peer Police

However, some believe there is an unwritten enforcement mechanism — with negative and positive implications. At the Health Care Convention & Exhibitors Association conference in June, attendees asked if the code was really voluntary. Lucy Rose, president, Lucy Rose & Associates, Leesburg, Va., and former head of the division of drug marketing, advertising, and communications, FDA, answered: “No. Why not? Competitors will call the media, who will generalize it to the whole industry. Everyone will suffer.”

Others speculate that companies will report violations to PhRMA or to each other. “If I learned that another member of PhRMA was doing something that was against the code, it would be appropriate for me to write a letter or pick up the telephone and call the general counsel and ask what was going on,” says Bartels. “I suspect that they would do the same with me.”

Comply or Else

While PhRMA's code may be voluntary, it strongly encourages member companies to adopt procedures ensuring compliance. And those internal company codes can be mandatory. Providers who are concerned about a company's commitment should ask for its policy, advises Saxton. “That's the best insurance that the company has made this official policy, because behind that policy is a whole compliance program.” But even with the best intentions, the code represents a huge culture change and CME providers recognize how difficult a task is ahead.

“There are a number of barriers,” says Barnes. “Even in the ideal world, it would take some time to achieve this. These companies are very large and decentralized. Even promulgating the guidelines will be a major effort. There's a lot of turnover in this industry; there's a long row to hoe.”

True, but some companies have gotten a jump-start. Pharmacia has formed a centralized department called Global Medical Communications, which focuses on setting new business conduct standards. In addition, before the PhRMA guidelines were developed, Pharmacia had adopted a similar set of guidelines as part of a multiyear effort to establish new compliance standards. The company adopted the PhRMA code quickly, as part of that overall compliance effort. Compliance with those rules “is not an option,” says Saxton. “There are repercussions to one's career if you don't comply — up to and including termination.”

A spokesperson for Wyeth reports, “We made significant changes to our own promotional practices more than a year ago. We have made it clear to our reps that interaction with physicians can only take place as part of legitimate educational/informational exchange. For example, all of our events must have CME as the primary focus. We have gone as far as to even stop providing physician token items (e.g., pens, etc.).”

Bristol-Myers Squibb has a formal, rollout plan to educate the field sales force. “Everyone really has to comply. It's coming right from our CEO,” says Joann Kerns, associate director, global meeting management, Bristol-Myers Squibb Co., Princeton, N.J. “This is truly a code of honor. All companies are expected to take the code seriously and we anticipate that it will change the way we do business today.” Because BMS has a consolidated meetings department, Kerns is right in the thick of things. “We work closely with the legal and regulatory teams. When meetings come through here — and I meet with every therapeutic area with regard to their meetings — we all talk PhRMA code.”

While pharma firms typically compete with each other in putting on social events such as concerts at association meetings, “We think that's going to change,” says Kerns. “We are looking at venues conducive to business as well as social events. The business is the focus absolutely.”

As for activities already planned, “either the event will come into compliance or it will be canceled,” says Saxton. “That's the black and white — there is no gray area.” Already, one activity was canceled, reports Paul Fitzhenry, Pharmacia spokesperson. The response from employees? “Because the direction to cancel the event was from the top, it wasn't questioned.”

Worldwide Enforcement?

At many association conventions, upwards of 50 percent of attendees come from overseas, courtesy of pharma firms, since AMA and ACCME guidelines, which prohibit firms from paying physicians' travel expenses, apply only to U.S. physicians and sponsors. It may be hypocritical, but specialty societies are concerned that if the code is implemented by companies' overseas divisions, they will see a drop-off in international attendance and lose that revenue.

“The question of ‘exporting compliance’ is one that goes way beyond the context of this marketing code,” responds Bartels. “Each company is going to have to address these issues in their own way.” The issue is on industry's radar screen. “The spirit behind this — benefiting patients and improving the practice of medicine — doesn't change wherever we are in the world,” says Saxton.

CME's Education Burden

Despite companies' training efforts, CME providers are concerned that the burden will fall on them. “I don't want the pharmaceutical companies to rely on us — as they did with the [ACCME] Standards for Commercial Support — to educate their representatives about their rules,” says Burdette.

Initially, at least, that seemed to be the case. “I had district managers calling and saying, ‘Do you have a copy of that?’ and I said, ‘Sure. Let's talk about how your company is telling you to do business and compare that with how we are currently doing business. Maybe we can ease your fears.’”

In the May issue of her department's industry-focused newsletter, The Collaborator, Burdette printed a copy of the code along with a list of PhRMA members. “It helped our image certainly, but it also helped the representatives to know their CME office understands what they're going through.

Burdette also believes CME providers can play a crucial role in drug companies' training programs. After one of her local reps returned from a corporate training for new reps, Burdette said to him, “I bet CME was never mentioned during those weeks. And he said, ‘You're right. It wasn't.’” She is encouraging regional managers and district managers to incorporate such training, telling them, “We would love the opportunity to have one hour with the reps.”

Saxton thinks that's a great idea. “Most representatives do need much more training on how to work effectively with CME providers.” Bartels also supports Burdette's plan. “The CME community can play a critical role in educating industry about the code.”

Teaching Docs to Say No

Training reps is only one piece of the education puzzle. As one CME provider put it, “While the pharma industry created this monster, the physicians have taken advantage of the system.” Barnes concurs. “This has been a culture that we have operated in. There has been very little leadership and feedback from the physician community to change this. The AMA took a step in the right direction by disseminating its guidelines but I think it's going to take a lot more than that. We have a multi-faceted educational campaign facing us.”

Burdette has already taken action, sending clinical chairs copies of the code and meeting with them about the ramifications. “Asking pharmaceutical companies to pay for next year's [medical students'] graduation is not going to happen,” she informed them.

She's also including the code in her physician newsletter. “We're just going to hammer this thing until people get it. Physicians will say, I'm not a member of the AMA and I don't have to abide by those rules. I say, ‘Are you an ethical person? Do you know the difference between right and wrong?”

Like other CME providers, she is well aware that physicians' sense of entitlement begins in medical school. “I've got residents who say they'll take anything the pharmaceutical companies will give them.” She is sending the PhRMA code and the AMA's pocket guide on gifts to physicians to all of Mercer's medical students.

Loopholes or Logic?

The big question is whether companies will adhere to the code once the current crisis has passed, or will they repeat the same pattern they did after the Kennedy hearings in the early '90s — scaling back for awhile and then slipping backwards.

“It will be important for companies to enforce the code without looking for loopholes,” says Orsetti. “We've already heard stories about companies trying to put on golf tournaments under the guise of charitable events. Follow-through is crucial. The PhRMA executive committee should review code compliance patterns and trends regularly. If not, the code may fall into disuse as before.”

But what about the gray areas? “Business models adjust and shift, and inevitably there are going to be questions that come up that don't lend themselves to easy answers by flipping through this code,” says Bloch. “Industry and government and physicians and CME providers will come up with standards that they can all live with — and some will say that those are exploiting loopholes and others will say that they're logical inferences.”

The success of the code depends as much on physicians as it does on drug companies. For instance, will physicians attend events if their spouses are not invited? “I'm not going to say we're not concerned about spouses,” acknowledges Kerns. “But, if physicians understand that this is not an individual company's mandate, that the industry has come together and feels this is the appropriate way to do business, it will be received well and we all won't feel a negative impact.”

Achieving Consensus

The key to success, says Saxton, is collaboration. “Industry cannot do this alone, physicians cannot do this alone, communication companies can't do it alone, CME providers can't do it alone. If we don't all continue to work together there will be leakage.”

Barnes encourages CME providers to heed that advice. “We have to be willing to work with the other stakeholders, and not to be obstructionists. Instead of just unilaterally promulgating guidelines, we need to achieve a common vision of ethical practices while recognizing the important financial concerns we all have.”

Barnes also stresses that the guidelines need to be much more explicit. She recommends that a key group of stakeholders — a group smaller than the AMA's National Task Force on CME Provider/Industry Collaboration — sit in a room with a locked door and hash out the really controversial areas. “If we don't do that, then we're going to see the government coming down on us with much more onerous restrictions and penalties.”


Sue Pelletier contributed to the development and reporting of this story. Additional reporting was done by Betsy Bair.

Code Gray: Speaker Honoraria

While the Pharmaceutical Research and Manufacturers of America's Code on Interactions with Health Care Professionals includes guidelines for speaker training meetings conducted by drug companies, it does not tackle the thorny issue of speaker honoraria and drug firms' speakers bureaus. CME providers are vocal in complaining that faculty demand high honoraria at CME programs because they are paid exorbitant fees by pharma firms.

“In some instances, when discussing honorarium, the speaker has asked whether the lecture will be supported by a pharma company,” says Kandi Hatmaker, CME coordinator, The Reading Hospital and Medical Center, West Reading, Penn. “When asked why he/she needs to know that at this point, I have discovered that the amount of the honorarium the speaker is willing to accept is directly related to whether or not there is pharma funding — more money when the activity is supported by a pharma company for which he/she is a member of the speaker's bureau, citing contracted arrangements with the pharma company! Outrageous!”

Michael S. Saxton, head, academic affairs, Pharmacia Corp., Peapack, N.J., agrees with Hatmaker and other CME providers that there is a problem. “I do think promotional programs have caused what I would call honoraria creep — or inflation,” he says.

The section of the code that addresses speaker training meetings states that health care professionals can receive “reasonable compensation for their time” when attending meetings to train them as presenters for company-sponsored speakers bureaus. That leaves a lot of unanswered questions.“One of the things clearly missing is clarity about what we really mean by speaker training programs,” says Saxton. “It's going to cause an eruption of comments from the CME community until we clarify that the code only deals with promotional speakers bureaus — not the commercial supporter's recommendations of faculty for CME activities.”

Saxton notes that the code does require pharmaceutical firms to be much more rigid in training speakers about the difference between CME and promotional activities. “The guidelines do not solve the problem, but I do think they do help make it better, not worse.”

Staving Off Uncle Sam

Will the Pharmaceutical Research and Manufacturers of America's Code on Interactions with Health Care Professionals hold off government regulation? The initial response from the government is positive. During a May 31 audioconference, sponsored by the Food & Drug Law Institute and the American Health Lawyers Association, James G. Sheehan, assistant U.S. attorney, eastern district of Pennsylvania said, “If people comply with this code as it is currently drafted, we are going to see a major difference in how this industry operates.” However, the code will probably not be considered a safe harbor by the Office of the Inspector General when it issues its compliance guidance for the drug industry later this year, added Sheehan, who has prosecuted hundreds of healthcare fraud cases.

David J. Bloch, attorney at law, Reed Smith Shaw & McClay LLP, Washington, D.C., who represents pharmaceutical firms, clarifies: “They don't appear to be interested in giving any formal statement that yes, we think that compliance with the code is compliance with the law. On the flip side, they haven't said outright that lack of compliance is a violation of the law. It will be considerably harder for a company to explain that its intentions were honorable but it didn't comply with the code. But, if challenged, the company will say, ‘This is the industry standard. Why are you challenging us?’” Bloch predicts that the code may become a de facto standard for government investigators to use when screening for problems.

While all the major companies have signed onto the code, word is that some firms have not yet said they will comply. If they don't adopt the code, they will be in a tough position, says Bloch. “It's hard to be the only manufacturer who doesn't sign on to this code. It will be a difficult position to maintain.”

PhRMA Code: Stay Tuned

We will continue to follow developments related to the code and its impact on the CE community. If you have experiences, strategies, or insights you'd like to share, please contact Tamar Hosansky at (978) 466-6358, or send e-mail to thosansky@primediabusiness.com.