Gifts and Other Perks for Doctors Restricted Under New Code of Ethics

Originally Published MDDI November 2003

NEWSTRENDS

Erik Swain

A new code of ethics places tighter restrictions on the nature and frequency of gifts, meals, and hospitality that device companies can offer healthcare professionals.

Member companies of the Advanced Medical Technology Association (AdvaMed; Washington, DC) will be bound by the new code beginning January 1, 2004. AdvaMed updated its code for the first time since 1993 partly as a response to conflict-of-interest accusations that have hit the healthcare sector.

“There has been an enormous amount of attention to this area,” said Blair Childs, AdvaMed's executive vice president. “So far, there have been over $2 billion in fraud settlements related to it. Most of that is from the pharmaceutical industry, but we are proud to take steps even if there has not been as much of a direct spotlight on us.” On top of that, Childs said, the Office of the Inspector General has released a compliance-program guidance for pharmaceuticals, and other groups have issued their own codes. “Anybody who is not aware of how important it is and how high the stakes are has not been paying attention.”

Several themes recur throughout the new code. One is that paying any expenses for anyone who does not have a bona fide professional interest in the information is inappropriate. That means no expenses for spouses of healthcare professionals in most cases. Another is that any meals and hospitality extended to a healthcare professional should be “occasional” and “modest,” which AdvaMed defines as infrequent and of low or moderate value.

“Our industry has close relationships with healthcare professionals for a very good reason,” said Childs. “Our process of innovation is iterative and requires close work with physicians. We recognize the importance of interaction but also the importance of doing business as fairly as possible.”

If a device company sponsors a product training or education session, any meals and receptions should be “subordinate in time and focus” to the educational or training purpose. Firms can pay modest travel and lodging costs of healthcare professionals if travel is necessary.
If a device company provides a grant for a third-party educational conference, it must let the sponsor of the conference select the attendees, and it must select conferences “primarily dedicated to promoting objective scientific and educational activities and discourse.” Grants to help cover reasonable expenses of conference faculty members are acceptable. 

For sales and promotional meetings, device companies may pay reasonable travel costs for healthcare professionals for occasions such as plant tours or demonstrations of nonportable equipment. Modest meals and receptions may be provided to appropriate healthcare professionals if they “are conducive to the exchange of information.”

More leeway is allowed for healthcare professionals who serve as consultants to a device company. They may be paid fair-market compensation for their services, and have their “reasonable and actual expenses” related to the consulting arrangement covered. But they should be selected based on qualifications and expertise, not based on the volume or value of business they might generate. 

Gifts to healthcare professionals are permissible only if they serve a genuine educational function. Personal gifts are not acceptable. They must be under $100 in value unless they are educational textbooks or anatomical models used for educational purposes. Branded promotional items of minimal value may be given. Cash or cash equivalents may not. 

Device companies may impart reimbursement information about their products to healthcare professionals. But they may not do so as part of an inducement to purchase, lease, recommend, or use their products. 

Grants and charitable donations for advancement of medical education, support of scientific research, and public education are acceptable. They should be documented properly and may not be made as part of an inducement to purchase, lease, recommend, or use products.

While there is no formal enforcement system, “our expectation is that if a company sees another company act in a way that is out of step with the intent of the code, the CEO would pick up the phone to call their fellow CEO and talk to them about it. We will serve as a forum for that if need be,” Childs said. 

The American Medical Association said it has not reviewed the issue and had no comment.

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