Getting the ear of physicians has always been a challenge for pharmaceutical firms, but in the last year or so, it's amounted to running the gantlet.
Stung by negative government, public, and media scrutiny over techniques for currying favor from physicians, the Pharmaceutical Research and Manufacturers of America last year released a detailed code of ethics designed to reign in some of the worst abuses. AdvaMed, a trade group for medical device companies, has issued its own set of guidelines, which go into effect January 1, 2004. Earlier this year, the Office of Inspector General weighed in on the matter with its own compliance program guidance. The last document — with warnings that supplying doctors with gifts, recreation, travel, meals, and entertainment could violate fraud, abuse, and anti-kickback laws — is the most chilling of the three.
Reaction from the pharmaceutical community has been palpable. The initial response for many was to cancel dinners, programs that weren't strictly educational, consultant meetings, and funding of other events that might raise suspicion. Gradually, pharma firms are settling on their own interpretations of the various rules and are creating internal compliance policies to govern future dealings with physicians.
Overall, meetings involving healthcare professionals are smaller, often shorter, and less lavish. “There is a dollar amount that they're trying to stay below,” says Bonnie Weiss, White Plains, N.Y.-based director of pharmaceutical industry sales with Hyatt Hotels & Resorts. For example, meetings that once would have involved overnight stays are being replaced by dinner meetings. Even internal sales meetings are seeing an impact, although they aren't covered by the guidelines.
As one medical firm exec says, the new rules were inevitable. “[The guidelines are] finally ensuring that more ethical practices are followed,” she says. It's changing everything; a lot of companies have to reinvent their meetings.”
Here's a review of how companies are changing their meeting policies.
Site selection is under more intense scrutiny because of the perception that certain destinations are venues for junkets, not education. The OIG guidance cites travel arrangements as potentially implicating the anti-kickback statute. That's not an idle threat: In a lawsuit against Parke-Davis, court documents charge that the company paid physicians kickbacks in the form of lavish trips to resort locations. To help squash such practices, the PhRMA and AdvaMed codes say that events should occur in sites conducive to education.
In response, many pharma companies are taking their meetings business out of any hotel with the words “spa” or “resort” in its name to avoid even the hint of excess. Some pharmaceutical companies have extended that rule to exclude meetings at certain luxury branded hotels, such as Four Seasons or Ritz-Carlton, although not necessarily all of the properties. “Some companies say planners can use the chain, just not the five-star hotels in it,” says Anne Digregory, director of pharmaceutical sales for Ritz-Carlton, New York. She also points out that many meeting schedules are so jam-packed that the site is almost a nonissue. “Even if people go to a resort, it's kind of a joke — they're spending all day in meetings,” she observes.
Pam Gilbert, director of sales and marketing for the InterContinental Houston, says second-tier hotels in solid business destinations like Houston are likely to benefit from concerns about appearances. “They're more appealing because they don't have that perception of being a potential bribe destination,” she says. In fact, for 2004, the hotel's business from medical groups is already up about 40 percent over 2003 levels.
Conference centers are also attracting more interest from medical firms. “When the invitation goes out and it says ‘conference center,’ it sounds a little better than if it's at a resort and spa,” says Chris Pentz, CMP, president of Pentz Group Communications, a medical meeting planning company in Levittown, Pa.
Ironically, worries over seeming too extravagant sometimes end up costing companies more to stage a meeting. “Sometimes appearances are very difficult to deal with,” says Pentz. “I might get a wonderful rate at a place that sounds terribly expensive, but the appearance dictates that we're not going there; that's quite sad.”
Spouses are no longer welcome, period, whereas in the past some companies would underwrite their travel or dining expenses. Both the PhRMA and AdvaMed codes say that events should be limited to healthcare professional attendees and not include guests or spouses. “Nobody can stop an individual from bringing a spouse with them, but it's really discouraged,” Pentz says. One strategy is to state explicitly on program materials that meal functions are for attendees only and do not include spouses or guests, or that a fee can be paid for guests.
According to the PhRMA guidelines, meals and receptions must be “modest as judged by local standards.” While that phrasing is certainly open to interpretation, it is unlikely that anyone would risk drawing untoward attention by treating doctors to steak, lobster, and fine wines at the priciest place in town, regardless of how much such an event emphasizes education.
However, there are ways to continue providing amenities without violating the spirit of the various codes. Hotels like the Inter-Continental, for example, include items such as welcome amenities and upgraded food and beverage as part of a total meetings package. “It takes a little of that liability factor away if the hotel has a complete meeting package that typically includes wine and canapes at welcome time,” Gilbert says.
Similarly, Ritz-Carlton has responded to the new codes by assembling meeting packages that include “reasonable F&B,” says Digregory. “In the years prior to the pharma guidelines, we were never asked to do that.” To make sure the packages are in compliance, the hotel chain trained at least one convention services manager at each property in the codes.
The primary lightning rod for those critical of marketing and educational practices has been gifts, entertainment, and recreation. The PhRMA code cautions against providing entertainment and recreational events. Paying for a round of golf or time on the slopes is out of the question — even if such perks are teamed with education.
“We've seen the most change in consultant meetings,” observes a medical education company executive who asked not to be identified. “Consultant meetings once might have involved a sumptuous dinner and tickets to a play; today, the event would be limited to a reception and nice meal.”
Others make the same observations. “In the past, our Education Department/Speakers Alliance group received requests to support dinner meetings that might include a ball game, movie, golf game, etc. The days of supporting those types of activities are over,” says Carol Duke, professional educational director with Alcon Laboratories in Fort Worth, Texas. “Today we focus our support on quality educational venues that include an hour-long modest meal and an hour's presentation, so that it is a balanced program without lavish entertainment.
Similarly, pharma-hosted social functions at specialty association meetings seem to be headed for oblivion. At the last meeting of the American College of Cardiology, held in March — eight months after the PhRMA code was released — the number of truly social functions was noticeably off from earlier years, says Keith Dillon, director of corporate relations for the Bethesda, Md.-based ACC.
To avoid even the hint of impropriety, collateral materials sent to attendees should be screened for inappropriate visuals or descriptions, advises a device firm executive who asked not to be identified. “For example, if a program is held in the winter at a ski lodge and a picture of a snow-capped mountain appears on the front of the course brochure, it could create the wrong impression,” she explains. “Something as simple as a photograph could imply the course is actually a ski vacation rather than an educational event. If you have a break in the program, in the past you might have called it a ski break; now it should be listed just as a break.”
Take away the gifts, fine dining, and the fun, and what's the attraction for a physician who is already reluctant to take time away from a busy practice?
Despite the need to avoid seeming frivolous, scheduling a meeting session in a desirable location is one way to get face time with coveted attendees. But desirable doesn't necessarily mean a resort: It could be a warm destination during the colder months, or a major city with great shopping, entertainment, and dining. In other words, places travelers would choose to visit on their own. Places where they can spend an extra day skiing or teeing up on their own dime. For dinner meetings, venues with private rooms and appropriate audiovisual equipment not only create a better appearance, they are likely to make for a more effective presentation, experts advise.
As for special events, medical companies are relying more on medical education and communications consultants to think of ways to supply the “wow” on a restricted budget. “We're asked to come up with creative solutions that don't say ‘extravagance,’” says Terri Breining, president, Concepts Worldwide in San Diego.
As in the past, stressing the educational component of a gathering will entice busy physicians. “An interesting, well-balanced program will always be a great attraction,” Pentz says.
In fact, companies seem to be channeling more of their funds into overtly educational programs. Since pharma firms can no longer engage in many of their promotional practices, “The funding that used to support those activities now has to go into other avenues, and a prime beneficiary is CME-certified activities,” says Michael Lemon, managing director of the Englewood, Colo., Postgraduate Institute for Medicine.
Alcon's Duke says she has noticed a major shift in the company's programs for physicians. “In the past, we spent about 45 percent of our educational budget on CME activities and the remainder on promotional activities. Today, 70 percent of our budget is spent on CME.”
“Overall, we've seen a real effort by our funding partners to adhere to OIG, PhRMA and of course, FDA [guidelines],' observes Jane M. Ruppenkamp, associate vice president of continuing education for Strategic Implications International, Vienna, Va. Despite the changes, there is more work to be done. “The next biggest challenge is the diffusion of this information — new policies and the reasons behind them — throughout the various levels of the companies,” she says.
Many observers point out that the new rules haven't always trickled down to the people planning meetings. “In many cases, our clients are project managers or clinical people rolling out their first meeting, and they don't understand that there are pharmaceutical regulations,” says Breining. “So, much of our time is spent educating them.” Others also observe that each company interprets and implements the guidelines differently.
Will these changes last? Duke survived a similar crackdown about a decade ago. “It took about two years until you weren't afraid to serve a meal that involved anything more than fruit,” she recalls. She expects the pendulum to swing back toward a middle ground this time, too.
Megan Rowe has been writing about the hospitality industry for 17 years.