In response to recent legislative and media scrutiny of industry-provider relationships, the Pharmaceutical Research and Manufacturers of America (PhRMA), the principal trade association for the pharmaceutical industry, revised its voluntary guidance on interactions with healthcare professionals. The revised PhRMA Code, which will take effect in January 2009, imposes new restrictions on gifts, meals, consulting venues, and support for educational programs offered by its members and also establishes new guidelines for fostering pharmaceutical industry compliance with the Code, including an annual certification process.1 This Update highlights the ways in which these provisions of the revised PhRMA Code compare with parallel provisions in the current device industry guidance, the Advanced Medical Technology Association (AdvaMed) Code.2

Gifts

The AdvaMed Code allows occasional, modest gifts to healthcare professionals if the gifts benefit patients or serve a genuine educational function, and permits occasional branded promotional gifts of minimal value that are related to the practice of healthcare or for the benefit of patients. Although the AdvaMed Code permits occasional gifts of textbooks and anatomical models valued at over $100, the gift provisions in the AdvaMed Code and the prior version of the PhRMA Code are substantially similar.

The revised PhRMA Code dramatically alters the standards with regard to permissible gifts in the pharmaceutical industry, prohibiting companies from providing healthcare professionals with any reminder items and any patient benefit items that are used for treatment rather than education. These PhRMA Code prohibitions mean that pharmaceutical companies will no longer be permitted to continue their long-standing practices of providing practice-related items of minimal value (e.g., pens, mugs, notepads) even if those items accompany educational materials. The revised PhRMA Code also reverses PhRMA’s position on stethoscopes, stating that medical equipment designed for patient treatment, rather than education, is prohibited. As a result of these changes, the only permissible gifts to healthcare professionals under the revised PhRMA Code are occasional gifts of educational items valued at $100 or less that do not have value to the healthcare professional outside of his or her professional responsibilities.

Meals

The AdvaMed Code allows occasional hospitality in the form of a modest meal or reception that is conducive to the exchange of information in connection with sales and promotional meetings. The AdvaMed Code acknowledges that physicians may need to travel in connection with plant tours or demonstrations of non-portable equipment, and the AdvaMed Code envisions that the representatives of device manufacturers may pay for meals and receptions in connection with these events.

The PhRMA Code also allows meals as a business courtesy in connection with informational presentations, but the revised Code limits the circumstances under which such meals may be offered. Specifically, under the revised PhRMA Code, field sales representatives and their immediate managers may provide an occasional modest meal only if the meal and presentation occur in the healthcare professional’s office or a hospital setting.

Third Party Educational Events

The AdvaMed Code and the PhRMA Code have substantially similar provisions regarding third party educational conferences. Both permit financial support for events primarily dedicated to promoting scientific and educational activities. Both provide that subsidies should be offered to conference sponsors rather than individual attendees, and allow for scholarships for healthcare professionals in training. Finally, both Codes provide that the conference sponsor should retain responsibility for and control over the selection of program content, faculty, educational methods and materials.

The revised PhRMA Code distinguishes between support for continuing medical education (CME) and support for other third-party educational and professional meetings. The revised PhRMA Code retains the prior guidance for “other events” but imposes additional restrictions on pharmaceutical industry support of CME. The discussion of CME in the revised PhRMA Code states that pharmaceutical companies should follow the standards for commercial support established by the Accreditation Council for Continuing Medical Education (ACCME) or other entity that accredits the CME. Consistent with the most recent revisions to the ACCME Standards for Commercial Support, the revised PhRMA Code makes plain that a company sponsoring a CME event should not provide any advice or guidance regarding the content or faculty for a particular CME program funded by the company, even if such input is sought by the CME provider. Moreover, although a CME provider may allocate financial support to meals for all participants, under the revised Code, a pharmaceutical company should not provide meals directly to healthcare professionals at CME events.

The AdvaMed Code lacks these new PhRMA Code restrictions and continues to allow device manufacturers to provide modest meals and hospitality directly to the healthcare professionals attending a CME event, if provided in a manner consistent with the CME provider’s guidelines. Moreover, an FAQ makes clear that the AdvaMed Code does not preclude device manufacturers from suggesting faculty members for educational events.

Arrangements with Consultants

The AdvaMed Code and PhRMA Code each allow members to provide reasonable compensation and reimbursement for travel, lodging, and meal expenses in connection with bona fide consulting services. The Codes generally establish parallel factors that support the existence of a bona fide consulting arrangement, with a few small differences. For example, the AdvaMed Code expressly requires a written research protocol when contracting for a consultant for research services, while the PhRMA Code does not specifically address research services. Similarly, while the AdvaMed Code does not address the number of consultants engaged by the company, the PhRMA Code provides that the number of healthcare professionals retained as consultants must not exceed the number reasonably necessary to achieve the identified purpose. Moreover, unlike the AdvaMed Code, the PhRMA Code has always included specific guidance on engaging consultants for company speaker programs and speaker training meetings.

The revised PhRMA Code prohibits recreation and entertainment in connection with consulting meetings and bars pharmaceutical companies from using resort locations for these events. The revised PhRMA Code also imposes new levels of accountability for relationships with pharmaceutical company speakers. The revised PhRMA Code states that speakers should receive training on FDA regulatory requirements and pharmaceutical companies should periodically monitor speaker programs in order to ensure compliance with FDA requirements. Moreover, the revised PhRMA Code directs each of its members to establish a cap on the total amount of annual compensation that the pharmaceutical company will pay to an individual healthcare professional in connection with speaking arrangements.

The AdvaMed Code does not presently impose these specific limitations on the compensation and benefits that device companies may provide to their consultants.

Provisions to Foster Compliance

AdvaMed has an existing program to foster compliance with the AdvaMed Code. The AdvaMed Code notes that AdvaMed members should communicate the principles of the Code to their employees, agents, dealers and distributors with the expectation that they will adhere to the Code. AdvaMed also maintains a voluntary Logo Supporters Program to identify companies that have committed to adhere to the ethical standards of the AdvaMed Code. Participation in the Logo Supporters Program requires the Chief Executive Officer of the company to sign a license agreement each year certifying that the company meets eight elements in their implementation of the AdvaMed Code of Ethics. These eight elements align with the Department of Health and Human Services Office of the Inspector General (OIG) Compliance Program Guidance and outline specific programs and processes that companies must maintain to ensure compliance with the Code. AdvaMed also posts the contact information for each member’s Chief Compliance Officer on the AdvaMed website.

In connection with the revised PhRMA Code, the pharmaceutical industry is developing similar mechanisms to foster compliance with its Code. The revised PhRMA Code provides that all representatives who visit healthcare professionals on behalf of the company should be trained on the applicable laws, regulations, and industry codes that govern their interactions as well as on the information necessary to ensure compliance with FDA requirements. The revised PhRMA Code instructs its members to assess representatives periodically to ensure compliance with company policies and standards of conduct and to take appropriate action to address non-compliance.

The revised PhRMA Code provides that each company should adopt procedures to ensure adherence with the Code. PhRMA is creating a process through which each company’s Chief Executive Officer and Chief Compliance Officer may sign an annual certification that the company has policies and procedures to foster compliance with the Code. PhRMA members are encouraged to obtain external verification at least once every three years that it has such policies and procedures. PhRMA will establish a website that lists the names of those companies submitting annual certifications along with the contact information for their Chief Compliance Officers. In addition, once PhRMA establishes guidance regarding external verification, its website will state if a company has obtained verification of its compliance policies from an external source.

Thus, the AdvaMed Logo Supporters Program and the revised PhRMA Code provisions regarding training and adherence offer alternative methods to foster compliance.