Medical Device Daily Washington Editor
As the U.S. Department of Justice examines the selling practices of Medtronic (Minneapolis), St. Jude Medical (St. Paul, Minnesota) and Guidant (Indianapolis), the effort to set up a voluntary standard of ethical behavior by device makers becomes ever more pressing.
More recent concerns include reports that Ela Medical (Cedex, France) was said to be the object of interest by the FDA and the Office of the Inspector General at the Department of Health and Human Services (HHS).
And the potential for legal action in connection with these investigations has not gone unnoticed by other companies in the medical device industry.
In the two years since theAdvanced Medical Technology Association (AdvaMed: Washington) released its voluntary code of ethics (Medical Device Daily, March 8, 2004), the association's membership has bought into the code in increasing numbers.
In a press statement following the March 31 conclusion of the Medical Device Regulatory and Compliance Congress at Harvard University (Cambridge, Massachusetts), the law firm King & Spalding (Atlanta) reported “a 100% adoption rate of the AdvaMed code.“ The statement also asserted that nine of 10 companies “apply the code to all company professionals, regardless of their title or seniority.“
Those numbers are up since the publication of a March 3 AdvaMed press release in which the association reported the results of a benchmarking survey, said to have shown that “the vast majority (85% or more) of firms had policies in place relating to consulting arrangements with and gifts to healthcare professionals, provision of reimbursement and technical information, and company sales and promotional meetings.“
More than half the compliance officers surveyed report directly to their firms' CEOs and more than three of four responding firms “have trained their most relevant employees,“ including sales personnel.
The AdvaMed code of ethics is based on a compliance program guide published by the Office of Inspector General at HHS in May 2003. In that notice, HHS stated that the purpose of its guide is to “encourage the use of internal controls to efficiently monitor adherence to applicable statutes, regulations and program requirements.“
While the guidelines explicitly address pharmaceutical firms, the document also states that the “guidance may also have application to manufacturers of other products that may be reimbursed by federal healthcare programs, such as medical devices and infant nutritional products.“
HHS cautioned that the guidance “should not be viewed as mandatory or as an exclusive discussion“ of compliance program elements, but recommended that even those firms with existing programs may want to use the HHS program “as a benchmark or comparison.“
For its part, AdvaMed made its voluntary code of ethics effective in January 2004, after the board of directors gave the document its stamp of approval the previous September. The association states in the preamble that the members are aware that ethical standards “are critical to the medical device industry's ability to continue its collaboration with healthcare professionals.“
However, the association also points out that its code “is intended to facilitate ethical behavior and is not intended to be, nor should it be, construed as legal advice.“
The guidance states that the selection of healthcare professionals as consultants should be based on “the consultant's qualifications and expertise“ rather than on “the basis of volume or value of business generated by the consultant.“ It also recommends that with the exception of educational models or books, “any gift from a member should have a fair market value of $100 or less.“
But the voluntary program does not appear to be backed by the threat of sanctions.
Christopher White, AdvaMed's general counsel, told Medical Device Daily that while the association has no formal mechanism for dealing with firms that are demonstrably out of compliance with the association's code, “we encourage our members and the public to contact the compliance officers of companies if they suspect non-compliant activity.“
White noted that AdvaMed has a list of compliance officers for member companies on the association web site and that “I have had about four or five calls that I directed to company compliance officers.“
In an effort to leverage the benefits of acceptance of the association code of ethics, AdvaMed has developed a code of ethics logo that member companies can display on their web sites so long as the firm can “certify that they meet the eight items outlined“ under a conditions of use agreement, which must be signed by a high-ranking corporate official.
The March 3 press release issued by the association in connection with the logo announcement also states that the logo and the corollary “self-certification program“ demonstrate the industry's willingness to assume “a leadership role when it comes to ethical practices and compliance.“
In an effort to spur continued awareness of compliance issues, Abbott Laboratories (Abbott Park, Illinois) has come up with a novel approach to reinforcing its code of conduct. As reported in the October 2004 edition of CRM Magazine, Abbott put together a touch-screen video game titled “Rocked or Shocked,“ a game that provides users with a refresher course in the company's ethical guidelines.
In “Rocked or Shocked,“ the protagonist, Joe Salesguy, flashes a grin at every correct answer, but when the user misses the answer, Joe “receives a nasty charge.“
Catherine Sazdanoff, vice president of compliance and ethics at Abbott Labs' Ross Products division, said that the company wanted to “have something live and fresh“ as a way of engaging employees, and they have “responded really well to this.“
However, the firm does not keep track of scores.