Pamela Bailey President, AdvaMed

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Pamela BaileyPresident, AdvaMed
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Rationale for Code

• Recognition of enforcement environment.
• OIG Compliance Guidance for Pharmaceutical
  Manufacturers and the PhRMA Code of Conduct.
• Belief that medical technology manufacturing
  industry is distinct from pharmaceutical
  manufacturing industry.

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Increased Attention Scrutiny

• Health care fraud is HOT
• Multiple entities and agencies have fraud units
• Major consequences of non-compliance
• 2.0 Billion in fraud settlements
• Indictments/convictions of individuals

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AdvaMeds Response

• Working Group convened for nearly a year
• Representative sampling of our membership
• Under guidance of Legal Committee and a Special
  Committee of the Board of Directors
• Revised Code based on
• Direction OIG was moving
• Considerations unique to technology industry

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Unique Considerations

• Inventors Advisors
• Products are designed, not discovered
• Researchers
• FDA requires safety data
• Medicare concerned with efficacy data

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Unique Considerations

• Students
• Health care professionals must be trained
• FDA device approvals often have training
  requirements
• Teachers of Users and Patients
• Senior experts work with technology firms as
  teachers in training programs
• Charitable Entities

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Why Distinction Is Important

• Technology manufacturers have legitimate ongoing,
  close relationships with HCPs.
• Therefore, firms need
• Latitude to interact with HCPs for appropriate
  purposes.
• Guidance to avoid inappropriate interactions.

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Section I. Preamble

• Voluntary code.
• Effective January 1, 2004.
• Purpose is to encourage voluntary, ethical
  interactions between medical technology companies
  and health care professionals.
• Health Care Professionals are individuals or
  entities that purchase, lease, recommend, use,
  arrange for the purchase or lease of, or
  prescribe Members products in U.S.

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Section II. Company-Sponsored Product Training
and Education

• Companies have a responsibility to educate and
  train HCPs in safe use of products.
• Programs to be held in settings conducive to
  education/training.
• Companies may provide
• Modest meals receptions to HCP attendees
• Reasonable travel and lodging for HCP attendees
• No spouses/guests of HCPs.

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Section III. Supporting Third Party Educational
Conferences

• Support allowed for bona fide educational,
  scientific conferences, through
• Educational grants
• Modest meals and hospitality
• Faculty expenses
• Advertisements and demonstrations

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Section IV. Sales/Promotional Meetings

• Meetings with HCPs on product features, contract
  negotiations, sales terms
• Companies may provide
• Modest meals receptions for HCP attendees if
  conducive to exchange of information
• Reasonable travel costs for HCP attendees (e.g.
  plant tours or demos)
• Not appropriate to pay for meals or other
  hospitality for HCPs guests/spouses

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Section V. Consultants

• HCPs serve as consultants. Companies may pay
  for
• Reasonable compensation for bona fide consulting
  services
• Reasonable and actual expenses incurred

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Section V. Consultants

• Factors indicative of bona fide consulting
  arrangements
• Agreement (written, signed, specifying services)
• Compensation (fair market value)
• Legitimate purpose and need for services
• Selection based on consultants qualifications
  and expertise
• Venue circumstances of meetings appropriate,
  hospitality modest, subordinate to meeting
  purpose
• Written research protocol

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Section VI. Gifts

• Companies may provide modest, occasional gifts to
  HCPs if gift benefits patients or serves genuine
  educational function AND has fair market value
  under 100 (exception for text books, anatomical
  models).
• Branded promotional items of minimal value
  related to HCPs work or for benefit of patients.

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Section VI. Gifts

• No cash or cash equivalents.
• Code not intended to address the legitimate
  practice of providing appropriate sample products
  and opportunities for product evaluation.

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Section VII. Reimbursement Other Economic
Information

• Companies may provide economic efficiency and
  reimbursement info to HCPs and 3rd party payors
  regarding medical technology products.
• Information must be limited to
• Identifying appropriate coverage, codes or
  billing of products or procedures.
• Designed to offer technical or other support for
  use or installation of Members products.
• It is inappropriate to provide services for the
  purpose of unlawfully inducing HCPs to purchase,
  lease, recommend, use or arrange for products.

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Section VIII. Grants Charitable Donations

• Companies may make donations for charitable
  purposes if made to charitable organization in
  support of
• Independent medical research
• Indigent care
• Patient education and public education
• Sponsorship of events if proceeds are charitable

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Section VIII. Grants Charitable Donations

• Companies may provide grants for
• Advancement of education for HCPs-in-training
• Support of research with scientific merit
• Public education about health topics
• All grants and donations must be documented

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Final Notes

• September 2003 Code supercedes all prior
  versions.
• Companies will communicate principles to their
  employees, agents, dealers and distributors with
  the expectation that they will adhere to the
  Code.
• Code is intended to facilitate ethical behavior
  it is not intended to be legal advice.

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Final Notes

• Companies should address questions to their
  counsel.
• Companies have independent obligation to
  ascertain compliance with all applicable laws and
  regulations.

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What are the Practical Changes?

• Generally, hospitality is limited to modest meals
  and receptions.
• Greater latitude for consultants, but still must
  be modes
• Generally, no travel or hospitality for spouses
• Code is implicit, rather than explicit, in
  context of consulting meetings.
• Code is silent on hospitality provided by 3rd
  party conference sponsor.
• Distinguishes charitable grants from other
  grants.

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Practical Changes? (contd)

• New limits on gifts to physicians.
• No personal gifts (must be work-related or
  benefit patient).
• 100 limit (except textbooks and anatomical
  models).
• Encouraged to establish frequency / aggregate
  limits.
• New limits on support for 3rd party educational
  conferences.
• Only HCPs-in-training may receive scholarships
• Firms cannot select or pay for speakers
• Firms can provide indirect subsidy