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AdvaMed Updates Code of Ethics

Michelle Leppert, Device Regulation Alert, January 12, 2009

The relationships between medical device manufacturers and healthcare professionals will be subject to new restrictions beginning July 1 when AdvaMed's revised Code of Ethics on Interactions with Healthcare Professionals goes into effect.

The new Code eliminates gifts to healthcare professionals, prohibits entertainment and recreation, and provides more guidance on proper consulting and royalty arrangements. These and other restrictions are designed to help eliminate even the appearance of impropriety in medical device manufacturers' interactions with healthcare professionals. In addition, the Code recommends that companies certify their compliance with the Code and AdvaMed will post contact information for the compliance officer and company compliance hotline on its Web site.

The new Code "will lead the industry to safer ground," says Andrew Van Haute, Esq., assistant general counsel for AdvaMed. "(The changes are) really about making sure there is not an inappropriate cloud over a decision."

The revised Code provides a reference for all medical device manufacturers and gives them a sense of general practices in the industry, including safeguards that mitigate risk under the Anti-kickback Statute, says Gina M. Cavalier, Esq., a partner in Reed Smith's Washington D.C. office.

"Release of the new Code draws attention to compliance overall and presents an opportunity for companies to revisit their compliance policies and procedures, potentially update them, enhance them, and that type of exercise is always helpful," says Cavalier.

Overview of the Code
The revised AdvaMed Code:

  • Prohibits providing entertainment or recreation to healthcare professionals
  • Prohibit gifts of any type, including all non-educational branded promotional items
  • Provides guidelines for royalty agreements between medical device manufacturers and healthcare professionals
  • Sets parameters for providing demonstration and evaluation products
  • Addresses the provision of objective reimbursement, coverage, and health economics information to healthcare professionals
  • Includes a section under which a list of companies that certify their adoption of the Code will be available for public review on AdvaMed's Web site

Background on the Code
A large work group of people from member companies from almost every sector of the industry put together the revision, according to Van Haute. The revision process began in March 2008 and AdvaMed released the revisions on December 18.

The medical device industry has come under increasing scrutiny from federal prosecutors and government regulators in recent years. That scrutiny, including proposed legislation mandating the disclosure of payments to healthcare professionals, informed the direction AdvaMed took with the revisions and the decisions it made, according to Van Haute.

"I think the industry as a whole has a desire to demonstrate their commitment to ethical business practices," Cavalier adds. "While outside forces—and the current enforcement environment—impact this, there really is a genuine desire in the industry to showcase compliance efforts and a dedication to ensuring ethical interactions with physicians."

AdvaMed Code v. PhRMA Code
Some of the revisions echo those in the revised Pharmaceutical Research and Manufacturers of America (PhRMA) Code on Interactions with Healthcare Professionals, which went into effect this month., while others are specific to the medical device industry.

"We knew we were going to land in similar places to where PhRMA did in some of the sections," says Van Haute. "We did really think that where it was appropriate there was good reason to align with PhRMA, but we didn't take a lockstep view because there are ways that medical device companies' interactions with healthcare professionals are different from pharmaceutical interactions."

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