LawFlash

Ethics and Compliance: AdvaMed Updates Pioneering Guidance for Interactions with Healthcare Professionals

March 15, 2019

Industry guidelines for ethical interactions between medical technology companies and healthcare professionals have recently been updated to reflect best practices in modern healthcare delivery while ensuring compliance with laws and regulations.

The pioneering and widely used benchmark for ethical interactions between healthcare professionals (HCPs) and medical technology manufacturers has been updated effective January 1, 2020, by the Board of Directors of the Advanced Medical Technology Association (AdvaMed). Originally enacted in 2007 in the wake of government investigations and congressional concerns regarding medical device industry interactions with healthcare professionals, the AdvaMed Code has proved over time that the industry response to these concerns was decisive, sustained, and successful in tackling and modernizing ethical business practices.

The updated code remains ambitious in its objectives, in recognition that the AdvaMed Code of Ethics is more than an industry code of ethics and represents to the industry, regulators, and enforcers a gold standard for business practices in the medical device industry. Many states incorporate the AdvaMed Code into their marketing regulations, and the Office of Inspector General at the US Department of Health and Human Services (HHS) has incorporated AdvaMed Code standards into its Corporate Integrity Agreements (CIAs). Many medical technology companies of all sizes have embraced the AdvaMed Code and signed its pledge of compliance. Its acceptance is unlike any other industry code of ethics.

Notably, while there are important new provisions and clarifying guidance, much of the code remains steady with reaffirmed guidance that has proved enduring in promoting ethical practices. Some of the updates anticipate potential changes in the regulatory environment by the Centers for Medicare and Medicaid Services (CMS) regarding value-based programs and in transparency requirements. Old issues such as technical support in the operating room are addressed with practical guidance. Perhaps most notable is that the updated code continues to be designed to be capable of effective implementation for small, medium, and large medical device companies with domestic and global operations.

Key Concepts, Definitions, and New Provisions Introduced

AdvaMed made overall enhancements that make the code of ethics more accessible and readable for shareholders, including “Key Concepts” that highlight easily digestible fundamental takeaways. To reflect the increasing use of digital technology, AdvaMed also amplified the definition of “Medical Technology” to include “medical devices and products, technologies, digital and software platforms, and related services, solutions, and therapies.” Substantively, the updated code of ethics includes changes that better align with our ever-evolving healthcare ecosystem, and reflects changing dynamics in the way HCPs interact with medical technology manufacturers. As such, the updated AdvaMed Code contains updates to previous sections and also incorporates several new sections that were not previously addressed:

Compensated Physician Arrangements

Needs Assessments Are Still Recommended. One of the most significant changes from government deferred prosecution agreements in 2007 was the introduction of needs assessment for physician consulting and other compensated arrangements. The AdvaMed Code addresses this issue in its Key Concepts Section on Consulting Arrangements with Health Care Professionals, illustrating with FAQs that compensated healthcare professional arrangements for a full range of activities begin with an identifiable legitimate need for such services.

Conflicts of Interest Should Be Acknowledged and Managed. The FAQs address management of conflicts of interest with healthcare professionals, including leadership with medical societies and the calculation of royalties based on the healthcare professional’s use or order of the company’s product.

  • Industry Appropriate Communications for the Safe and Effective Use of Medical Technology: The updated code addresses the use of products by healthcare professionals for any use determined in the best interest of the patient, which may include uses that are not approved or cleared under US Food and Drug Administration (FDA) regulations. Such unapproved use may even be a recognized standard of care. The code identifies industry appropriate communications to include clinically-based information such as peer-reviewed scientific and journal articles and clinical practice guidelines, avoidance of claims on safe and effective use about investigational products at scientific meetings, and discussions with physicians related to unmet patient needs and product research. The code recommends that companies adopt policies to assure truthful and non-misleading communications occur regarding products and that communications identify when products are not approved or cleared by the FDA.
  • Manufacturer Representatives Providing Support in the Clinical Setting: As medical technology manufacturers become an integrated part of healthcare delivery, and medical technologies become more complex, the code provides new guidance for manufacturer representatives that are present within clinical settings. Amid scrutiny and limited guidance, the code of ethics now calls for increased transparency. Patients may interact with manufacturer representatives in clinical settings where they are providing technical expertise and assessment. The code of ethics advises that manufacturer representatives should disclose that they are acting on behalf of the company. To further protect patient interest, there is guidance around the role of the medical technology representative, increased focus on HCP decisionmaking, and instruction for credentialing and patient privacy.
  • Joint Education and Marketing: The code of ethics includes a new section that provides compliance guidelines to manage jointly conducted education and marketing including a definition for legitimate need, necessary controls, balancing of content, and equitable contributions towards activities and costs. This section reaffirms needs-based collaborations with healthcare professionals.
  • Grants, Donations, and Commercial Sponsorships: The code of ethics consolidates previous sections on training and education conducted by the company and other business meetings into one comprehensive section that explains the ethical parameters for all company-conducted programs.
  • Third-Party Programs: The code consolidates existing sections on providing support for third-party educational, charitable, and research programs into one comprehensive section. New language now specifies that grant funds can only be used by the organizer to provide items permissible under the code of ethics and also adds a checklist that can be used in evaluating requests. There is also additional language regarding satellite symposia logistics, supporting independent research grant requests, and parameters for providing charitable donations.
  • Travel and Meals: The guidance around travel and meals is better streamlined and includes clarification on when travel is permitted and prohibited. Travel is prohibited for general education, attending a third-party program, or where there is no legitimate need. Additionally, the code of ethics now recognizes that different geographic areas may warrant different monetary thresholds for meals and encourages companies to develop meal policies using benchmarking information.

Generally, the updated code of ethics includes much-needed clarification that will provide medical technology manufacturers with clarity around parameters by which they may enter into arrangements with HCPs. As medical technology operations and delivery become more globalized, it is often difficult for global medical technology manufacturers to determine whether interactions outside the United States are within the parameters of the code. The code of ethics is intended to govern medical technology manufacturer interactions with US HCPs, whether occurring inside or outside the United States. Accordingly, non-US employees who interact with US HCPs should be trained on the updated code of ethics.

The updated AdvaMed guidance remains a strong resource for structuring legal compliance, business relationships and practices and its rollout now provides a well-timed opportunity for medical technology companies to review and update policies and procedures related to healthcare professionals.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the authors, Katie McDermott, and John Cosgriff, or any of the following Morgan Lewis lawyers:

Washington, DC
Michele Buenafe
Scott Memmott
Albert Shay
Howard Young
Jacob Harper

Houston
Greg Etzel
Scott McBride

San Francisco
Reece Hirsch 

Boston
Mark Stein