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Alerts and Updates

AdvaMed's Updated Code of Ethics

February 12, 2019

AdvaMed's Updated Code of Ethics

February 12, 2019

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AdvaMed encourages companies to adopt an “appropriately tailored” ethics and compliance program, accounting for the specific types of risks that apply to their operations.

The Advanced Medical Technology Association (AdvaMed) has published its updated Code of Ethics. The updated code will become effective on January 1, 2020. AdvaMed has also published an overview of changes.

The updated AdvaMed Code now includes “Key Concepts” at the beginning of each section, with visuals, graphics, callout boxes, examples, explanations and FAQs.

The AdvaMed Code provides medical technology companies with guidance on ethical interactions and relationships with healthcare professionals (HCPs) to ensure that medical decisions are based on the best interests of the patient.

Because the medical technology industry is highly divergent, the AdvaMed Code drafters recognize no single compliance program fits each company. Therefore, AdvaMed encourages companies to adopt an “appropriately tailored” ethics and compliance program, accounting for the specific types of risks that apply to their operations. Companies adopting the AdvaMed Code are encouraged to submit to AdvaMed an annual certification stating adoption of the AdvaMed Code and implementation an effective compliance program.

The updated “Consulting Arrangements with Health Care Professionals” section states that all consulting arrangements with HCPs should be based on certain principles including hiring consultants only when there is a legitimate need; selecting only duly vetted HCP consultants; providing fair market value compensation; reimbursing only documented, reasonable and actual expenses; having written agreements; and not allowing sales personnel to have control or undue influence over hiring a specific HCP.

“Legitimate need” arises when a company requires the services of an HCP to achieve a specific objective. Designing or creating an arrangement to generate business or referrals are not legitimate needs.

The AdvaMed Code further provides suggestions on establishing a “fair market value” for consulting arrangements and encourages companies to document such methodology.

The AdvaMed Code states that companies should be aware that interactions with other companies may potentially create conflicts of interest for HCPs and recommends companies take steps to address the conflicts, including, for example, recusal from decisions that may implicate the conflict.

The AdvaMed Code now consolidates company-conducted training and education and other business meetings into a single section about company-conducted programs. Likewise, the AdvaMed Code merges existing sections on providing support for third-party educational, charitable and research programs into one section on grants, donations and commercial sponsorships.

The educational grants section now provides a checklist of review questions for use in evaluating requests.

The AdvaMed Code prohibits companies from providing monetary or in-kind contribution directly to an individual HCP. However, Satellite Symposia are permitted under the AdvaMed Code, and companies may pay for travel, lodging or registration expenses of an HCP when the HCP serves as a bona fide faculty member at a Satellite Symposium.

The AdvaMed code expands and clarifies requirements for supporting independent research grant requests, and provides parameters for providing charitable donations.

In the section “Jointly Conducted Education and Marketing Programs,” the AdvaMed Code provides that a company may partner with an HCP to conduct joint education and marketing programs designed to highlight both medical technology and the HCP’s ability to diagnose or treat a medical condition, provided that the company and the HCP serve as bona fide partners. Contribution costs should be shared equitably between the parties. Other limitations include a legitimate need to engage the HCP and a written agreement detailing purpose of the arrangement, the roles, responsibilities and contributions of each party.

The “Travel & Lodging; Venue” section consolidates existing travel guidance and provides that a company may pay for modest and reasonable travel and lodging costs to attend a company-conducted program or meeting under certain circumstances. The AdvaMed Code provides clarification on when travel is permitted (e.g., for consulting or training when legitimate need for meeting) and prohibited (e.g., for general education not concerning a medical technology or when there is no legitimate need). This section provides guidance for choosing a setting/venue (e.g., central location, conducive to exchange of information, limits on top category or luxury hotels).

The “Providing Modest Meals and Refreshments to Health Care Professionals” section consolidates guidance on meals and states that meals and refreshments should be provided to HCPs in a manner and place conducive to the presentation of scientific, educational or business information. Meals and refreshments should be subordinate in time and in focus to the discussion and presentation of such information. The AdvaMed Code encourages companies to develop policies on providing modest and occasional meals to HCPs. The policies may establish a per meal spending limit with a HCP and whether the amount should vary to account for geographic areas (for example, New York City) that are generally more expensive.

The “Educational & Patient Benefit Items; Prohibition on Gifts” section provides that companies may not provide branded, promotional items or gifts to HCPs. Instead, companies may provide HCPs with modest educational items, such as medical textbooks, anatomical models or any educational item having a fair market value of less than $100 or patient benefit items, such as starter kits and educational brochures. The AdvaMed Code states that companies may not provide entertainment or recreation to HCPs in any form.

The AdvaMed Code adds a new section on “Communicating for the Safe & Effective Use of Medical Technology,” which provides principles for communicating on unapproved/uncleared uses. As stated therein, “Access to truthful and non-misleading information relating to Medical Technologies… is critical to a Health Care Professional’s ability to exercise his or her medical judgment… to provide high-quality care, and to safely use available Medical Technology.” Accordingly, company responses that contain information regarding unapproved or uncleared uses should be provided by personnel with clinical expertise in the unapproved/uncleared use, not sales personnel. The AdvaMed Code provides examples of communication activities under which companies may disseminate information to healthcare professionals. However, information related to unapproved or uncleared uses should be identified as such. The AdvaMed Code encourages companies to apply the principles and develop related controls for appropriately disseminating such information.

A final new section, “Company Representatives Providing Technical Support in the Clinical Setting,” provides that company representatives may play an important role in the clinical setting by providing technical support on the safe and effective use of medical technology, including providing explanations as to functionality and use and assisting the clinical/operating room team with respect to the appropriate range of devices and accessories available during a procedure. The AdvaMed Code, however, places limitations on such assistance: (1) company representatives may enter and be present in the clinical setting only at the request of and under the supervision of a HCP; (2) company representatives should be transparent that they are acting on behalf of the company in a technical support capacity; (3) company representatives should not interfere with an HCP’s clinical decision making; (4) company representatives should comply with applicable hospital or facility policies and requirements; and (5) the company’s technical support should not eliminate an expense that the HCP would otherwise incur while providing patient care.

The AdvaMed Code will become effective on January 1, 2020.

For More Information

If you have any questions about this Alert, please contact Frederick R. Ball, Jonathan Lourie, any of the attorneys in our Life Sciences Industry Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.