AdvaMed revises the US Code of Ethics on Interactions

February 7, 2020 | Life sciences

AdvaMed, a trade association for companies in the medical device, diagnostics, and health information systems industries, has been a relied-upon source of guidance on industry-specific ethical business practices and responsible conduct since the US Code of Ethics for Interactions with Health Care Professionals (herein referred to as the "Code") inception in 2003. In particular, the AdvaMed Code sets the standards for medical technology companies’ interactions with health care professionals (HCPs) in the course of business. Companies that adopt the AdvaMed Code typically certify on an annual basis that they maintain an effective compliance program.

Broadly, the AdvaMed Code lays out seven elements of an effective compliance program:

• Implementing written policies and procedures;
• Designating a compliance officer and compliance committee;
• Conducting effective training and education;
• Developing effective lines of communication (including an anonymous reporting function);
• Conducting internal monitoring and auditing;
• Enforcing standards through well-publicized disciplinary guidelines; and
• Responding promptly to detected problems and undertaking corrective action.

AdvaMed’s recently revised Code of Ethics focuses primarily on improving the applicability of the code by providing updated case examples and a more user-friendly format. The new code went into effect on January 1, 2020.

Highlights from the revised Code

The revised Code gives medical technology companies meaningful guidelines by offering recommendations on a number of specific activities. Each activity is accompanied by several illustrative examples or frequently asked questions that are intended to lend clarity to the Code’s precepts. Three general themes found across the guidance are:

• Maintaining a clear separation of sales activities and personnel from educational or clinical consultation activities;
• Ensuring that interactions are commercially reasonable both in terms of purpose and compensation; and
• Not interfering with clinical practice decisions.
  

Consulting arrangements with HCPs: Many companies enter into consulting relationships with HCPs for the purposes of education and training, research, serving on advisory boards, and many others. Consulting relationships should arise from a legitimate need, and consultants should be selected through a formal process of identifying HCPs with the appropriate experience and credentials.

The new guidance has clarifying language on what is considered a legitimate need and suggested parameters for identifying a fair market value (FMV) for a given service. In particular, a company should not base compensation on the volume or value of the consultant's past, present, or anticipated business. The guidance also establishes a clear delineation between sales and HCP consulting whereby sales personnel cannot control or influence the decision to engage a particular HCP for a consulting purpose.

Company programs and meetings with HCPs: In order to maintain a universe of HCPs who are experts in the use of a particular product, many medical technology companies will conduct in-depth training and education activities. The revised Code gives guidance around appropriate settings for such meetings, as well as the nature of program faculty and a means for identifying attendees. Likewise, companies may conduct other types of business meetings with HCPs to discuss the particulars of a product, sales terms, health economics, purchase contracts, and other purposes. Most notable in its guidance on business meetings, AdvaMed establishes that each HCP should have an objective, legitimate need to attend the meeting.

Educational and research grants, charitable donations, and commercial sponsorships: The Code allows for companies to provide educational grants in support of a third-party program directly to the program’s organizer or to a training institution or other entity designated by the organizer. In all cases, sales personnel may not be involved in grantmaking decisions. For commercial sponsorships, any fees should be commercially reasonable and be collected in exchange for specific marketing activities, such as advertising, signage, or display space.

Companies may not directly support individuals by paying for registrations, fees, travel, or lodging related to attending a third-party education program. Charitable donations should only be made for bona fide purposes and to charitable organizations or other nonprofit entities with clear charitable and/or philanthropic purposes. In terms of its responsibilities in this regard, a company should ensure that the charitable organization or charitable purpose is, in fact, bona fide by knowing an entity’s tax and corporate status, as well as the organization’s mission. Companies that attest to the AdvaMed Code may not pay for or provide tickets to HCPs or their spouses or guests to attend charitable events, such as galas and golf outings.

Jointly conducted education and marketing programs: Medical technology companies are allowed to partner with HCPs to conduct joint education and marketing programs, but they must be in furtherance of a bona fide need and avoid unlawful inducements. Jointly conducted education and marketing programs should be balanced, promoting both the company products and the HCP in view of the range of services offered for the diagnosis and treatment of related medical conditions. They should also be balanced in making equitable contributions towards the activity and its costs.

Examples of controls that companies can implement include periodic assessments of the appropriate business need for the program, focused training, a process for evaluating the fair market value of jointly conducted education and marketing programs, and field-based monitoring.

Travel and lodging: The Code allows companies to pay for an HCP’s travel and lodging when the HCP is working under a contracted consulting relationship, to attend company training or education, to speak on the company’s behalf, and in other circumstances such as plant tours or demonstrations of equipment. In all cases, the expenses should be reasonable and serve a legitimate, documented purpose.

Companies may not pay for travel and lodging without a legitimate purpose or to attend an unrelated program sponsored by a third party. Regarding venue, the guidance recommends avoiding the selection of settings based on their entertainment value and avoiding luxury hotels or resort facilities without appropriate justification. Companies should establish formal controls such as duration limits or standards for time and location relative to a program or meeting.

Meals and refreshments: Like other aspects of the Code, any meals or refreshments should be less important than the subject of a meeting and should relate to a meeting or activity with a bona fide purpose. The Code recommends that companies establish meal limit policies, with any necessary variation by locale. Importantly, the guidance makes clear that meals should not be provided for the purpose of a general discussion on building business relationships. Meals should be provided on the basis of discussing technological developments, pricing, contract negotiations, or other specific purposes.

Prohibition on gifts, entertainment, and recreation: While companies are permitted to provide modest educational items to HCPs that might benefit patients, they are not allowed to provide HCPs with non-educational or non–patient-related items such as office supplies, tablets, scrubs, or devices that are capable of personal use. Any branded promotional items, such as pens or mugs, should be of minimal value. No gifts such as wine, flowers, or gift cards are permitted. Companies are also not permitted to pay for entertainment and recreational activities, regardless of the value of the activity, the relationship with the HCP, or whether the activity is secondary to an educational purpose.

Off-label usage: Regarding the communication around unapproved or uncleared uses of medical technology and identifying information as off-label, all company communications should clearly identify when an off-label use is under discussion and should only come from personnel who are specifically authorized to discuss off-label usage. Off-label usage can be described through the dissemination of peer-reviewed scientific and medical journals, reference texts, and clinical practice guidelines.

With the proper disclaimers on safety and efficacy, companies may speak about off-label uses at educational and medical meetings where they have been explored in clinical trials or research and development. Companies may also speak with consultants and HCPs for the purpose of obtaining advice around unmet patient needs, product research, and similar themes.

Providing health economics and reimbursement information: Companies are permitted to give coverage, reimbursement, and health economics information on their products, provided that it is accurate and objective. Companies may also collaborate with HCPs, patients, and patient advocacy organizations to achieve government and commercial payor coverage decisions, guidelines, policies, and adequate reimbursement levels. Companies may facilitate access to their products for HCPs with assistance in obtaining patient coverage decisions from payors, including providing information on payor policies and training on procedures for obtaining prior authorization, providing sample letters and information on medical necessity, and appeals of denied claims.

Companies may not interfere with HCPs’ clinical decision-making or provide coverage, reimbursement, and health economics support that may be construed as an unlawful inducement. For example, companies are not permitted to provide services intended to defray overhead or other expenses incurred by HCPs or suggest billing mechanisms for services that are not medically necessary or potentially fraudulent.

Demonstration, evaluation, and consigned products: Companies may provide reasonable amounts of products to HCPs at no charge for the purposes of provider determination on whether to purchase or recommend the product. These activities are permitted for both single-use products, and for multiple-use or "capital" product as long as they do not transfer their ownership to the HCP and are available only for the time needed to fully evaluate the product. In all instances, proper recordkeeping and established policies and procedures are essential.

For consigned products, where items are left in with an HCP for storage but remain the property of the company until their use, such arrangements should be subject to formal agreements that stipulate the number of products, any requirements to segregate the products from others, storage requirements, and other aspects of the arrangement. Company controls should include taking periodic inventory of the devices and reconciling inventory discrepancies as needed. Companies should have a policy in place to ensure the return or removal of expired products as well.

Company representatives providing technical support in the clinical setting: Such representatives may explain a product’s unique uses or features and should be available to assist clinical teams to ensure that the correct devices are used in a particular instance. To ensure ethical technical support, company representatives should only be present in a clinical setting on the request of and under the supervision of the HCP, should be clear on their role as acting on behalf of the company to provide technical support, and should not interfere in clinical decision-making. In line with the guidance on health economics and reimbursement, technical support should not be used to limit expenses that the HCP would otherwise incur through patient care.

How to think about the new Code

In many respects, the new Code does not differ from prior versions, but it does offer specific examples that are worth considering during a review of company policies and procedures. In addition, new guidance around communicating on off-label uses, providing technical and payor support, and the scope of meals and other expenses are areas where medical technology companies should pay close attention.

In the end, AdvaMed’s newest version of the Code provides a framework for companies to employ in their continuous risk assessment activities. The Code of Ethics is one part of ensuring that companies continue to operate under rigorous industry standards while minimizing legal and reputational risks.