Outside the operating room—economic, regulatory, and legal challenges
An industry perspective: Proactive self-regulation through an industry code of ethics
By Christopher L. White, Esq
I serve as general counsel of the Advanced Medical Technology Association (AdvaMed), a Washington (DC)-based trade association that advocates on behalf of the medical device innovation community. Most of the approximately 1,600 companies we represent are small, having fewer than 100 employees. All of our member companies have a great interest in creating an environment that will sustain innovation to fuel additional benefits in patient care.
PHYSICIANS AND THE DEVICE INDUSTRY: INTERACTIONS ARE MANY, VARIED, ESSENTIAL
As noted earlier in this session by Mike Mussallem, who serves as chairman of AdvaMed’s board of directors, the medical device industry is very different from the pharmaceutical industry. Device innovation requires a great deal of collaboration with physicians in the field. Moreover, devices are not simply prescribed—they are used. That is, many of the inventions are an extension of the surgeon’s hand, such that technique influences how devices are deployed and used. As a result, with each incremental innovation, there is often a need for retraining.
Physicians wear many hats in their relationships with the medical device industry. Not only are they purchasers of products but they are collaborators, inventors, trainers, and trainees. They are also recipients of charitable contributions and of research grants. We recognize that these multiple relationships can become intertwined and, from a distance, can arouse confusion or suspicion. But simply because these relationships exist does not mean that there is a conflict of interest—there may be dualities of interest. In most cases we have a common interest and are working toward a common objective: to provide care in the best interest of the patient.
THE ADVAMED CODE OF ETHICS
The key question from industry’s perspective is how best to manage these relationships with physicians and any potential conflicts of interest. To that end, AdvaMed has developed a code of ethics to provide guidance relevant to the most common interactions between device manufacturers and health care professionals.20 The AdvaMed code has been adopted by international device trade associations and embraced or cross-referenced by physician specialty societies.
Although the AdvaMed code has become a “gold standard,” it is a living document, and we are in the process of reviewing and revising it in an effort to address challenging new issues such as royalty payments, among others, which have become the focus of public questions and scrutiny.
MOVING FORWARD AFTER THE JUSTICE DEPARTMENT DEFERRED PROSECUTION AGREEMENTS
Recently, five orthopedic hip and knee implant manufacturers entered into novel deferred prosecution and non-prosecution agreements with the US Department of Justice following a Justice Department investigation into financial relationships and consulting agreements between these companies and orthopedic surgeons. The agreements include the appointment of federal monitors to review virtually every transaction that these companies have with physicians. These agreements impose a level of governmental review over the device industry that has never been seen before.
The agreements also require the five companies to disclose on their public Web sites all payments made to physicians. The disclosures must follow a specified format listing each physician’s name and location, the amount of the payments, and limited information regarding the purpose of the payments (eg, for consulting, royalties, charitable contributions, research grants). This requirement has created much interest as well as a good deal of confusion.
These developments have also spurred AdvaMed to work aggressively on federal and state legislative efforts. We are taking a proactive position on the disclosure of financial arrangements between industry and physicians in the context of the proposed Physician Payments Sunshine Act mentioned earlier by Mike Mussallem. If passed, this legislation would change the landscape by requiring that all pharmaceutical and device companies report to a single federal database all transfers of value or other payments, subject to certain exceptions, from industry to physicians. Similar to the federal agreements with the orthopedic implant manufacturers, the bill would require that the name and location of the physicians receiving payments be disclosed, along with the payment amount, but with greater context regarding the purpose of the payment. AdvaMed has been advocating for providing detailed explanations of this context so that everyone, including the public, can understand why such payments are made and how they can be beneficial.
