Medical Device Daily Washington Editor
WASHINGTON – “Good ethics is good business.”
That’s the message Blair Childs says he hears time and again from CEOs concerning adoption of the model code of ethics developed by the Advanced Medical Technology Association (AdvaMed; Washington).
It has been a little more than a year since AdvaMed rolled out its code, and Childs, executive vice president of AdvaMed – and currently an interim lead executive of the organization – told Medical Device Daily that he has been “amazed” at the feedback concerning the code thus far.
“This is guidance that anybody in the industry should be following,” Childs said. “We’ve gotten responses from such a huge cross-section of the industry – big and small companies.”
The association recently released a survey of its member companies’ implementation of the code and it added to its Frequently Asked Questions (FAQ) section.
“I would say virtually everyone in the industry has made changes as a result of the code,” Childs said. “We have found that companies are making significant changes.”
AdvaMed surveyed 48 of its members – ranging from firms with fewer than 100 employees to those employing more than 10,000 – finding that more than 85% of the 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.
The survey also indicated that 50% of companies surveyed either modified their existing policies or created new internal policies in response to the AdvaMed code.
According to the report, about 75% of the companies have trained their critical-level employees, including sales representatives, marketing personnel, senior executives and general managers. Employees are generally trained at least once each year, one-to-five hours.
Sales and marketing fraud/abuse, and good laboratory, manufacturing, and clinical practices were the top compliance priorities identified by the survey. It also found that more than 50% of corporate compliance officers report to CEOs, and most have a legal or regulatory background.
The code was developed to provide information – not just for AdvaMed’s member companies, but for any device manufacturer – to help avoid even the most innocuous example of impropriety that could lead to local, state, or even federal censure.
The guidelines were created to respond to the “unique nature” of the device industry, Childs said, distinguishing it from similar guidance covering the pharmaceutical industry.
The code offers an “ethical framework and guidelines” within the context of federal law, AdvaMed says, to provide guidance concerning consistent practices in dealings with healthcare professionals – from researchers and providers to physicians and nurses.
Interactions covered by the code include manufacturers’ activities to educate and train healthcare professionals in the use of their technology, as well as sales and promotional activities, gifts to healthcare professionals, arrangements with consultants, and education on reimbursement for new medical technologies.
This is “a very important and legally charged area,” but AdvaMed’s code is not to be considered strict legal advice, Childs emphasized. “I get calls all the time,” he said. “I can’t give advice to people, nor can other members of AdvaMed, but what I do is hear the questions people are asking, and keep track of them.”
Though not a legal document, he termed the code “invaluable” because it is “based on our best interpretation of what the law is.”
To keep up with changes and feedback, AdvaMed began an internal working group for the code of ethics, Childs said. He said the group regularly reviews the code, member feedback, issues the team hears regarding implementation of the code, and questions that come up.
Most of the additions to the FAQ section deal directly with the issue of gift-giving and financial support – what’s appropriate and what’s not. In most cases, no matter how innocent the nature of the gift appears to be, the safest answer is to stay away.
For example, one of the questions asks whether the code applies to hospitality (meals, gifts, etc.) provided to government employees. Another question covers gift giving during “significant life events” such as a birth or a wedding.
Innovation and patient safety depend on close interactions with healthcare professionals, Childs said, and companies need to be able to draw a distinction, a line of what is proper and improper, and that is really what the code intends to do.
“The fact is that this industry wants to be responsible, and it wants to behave in an ethical way in interacting with healthcare professionals because those interactions are critically important for our industry,” he said. “This is a very difficult environment for companies right now, but all this attention on compliance and ethical business practices is a good thing.”
During AdvaMed’s annual meeting last month, Washington attorney Kevin McAnaney told medical device company executives that the federal government was likely to ratchet up its enforcement activities (MDD, March 7, 2005). That prediction has been underlined by recent government requests for professional documentation from Advanced Neuromodulation Systems (Plano, Texas) and the major orthopedic device manufacturers (MDD, Feb. 17, 2005/April 1, 2005).
Though Childs said there would be some “very challenging times” for the industry, but he would not speculate on recent actions by the government.
“Device companies are extremely vulnerable on payments to physicians,” McAnaney said. “They give a lot more dollars to fewer doctors than do pharma companies, and there often are situations where as few as a thousand docs can control an entire market.”
Such situations, he said, can make for “very straightforward and compelling kickback cases.”
Calling the Compliance Program Guidance for Pharmaceutical Manufacturers a “road map” for prosecutors to follow, McAnaney said that the vulnerabilities of device firms include payments to physicians for what he characterized as “sham research projects,” FDA and other regulatory violations – especially in 510(k) clearances and promotion of off-label uses of products approved for other indications – and discounts to purchasers.
McAnaney also said government officials have publicly identified device companies as being within their radar as possible targets.
A former FDA official who spoke to MDD, but asked that he not be identified, said that it was important not to let marketing creep into educational programs for healthcare providers.
“Good ethics are in a company’s own long-term interests,” he said. “It can be very simple: Don’t do anything that could in a any way, shape or form be considered a kickback.”