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 Originally enacted in 2007 in the wake of government investigations and congressional concerns regarding medical device industry interactions with healthcare professionals, the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.
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:
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.
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.
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:
M. Erin Rodgers Schmidt