Originally Published MDDI April 2005

EDITOR'S PAGE

Good Ethics Is Good Business. Always.

The federal government is turning an eye to questionable promotional practices in the device industry. But the case for being aboveboard goes well beyond the current political climate.

A headline in The Wall Street Journal on February 25, 2005, announced boldly: “Medical Device Industry Faces More Scrutiny by U.S. Officials” over marketing and promotional tactics.

The logical reaction would be to caution industry that this is a bad time to engage in questionable promotional practices. After all, FDA and other agencies are under fire from Congress and the public for their oversight of healthcare.

But in truth, it is never a good time to engage in questionable promotional practices. Yet it's not just because such actions are ethically wrong and legally iffy. It's also because a large part of industry's standing depends on the integrity of its products and the science behind them. Public and clinician acceptance of a medical product cannot be based on anything but its own merits. Otherwise, trust in the product and its maker is lost. Even the perception that a product is being adopted because of incentives to caregivers can undermine its standing and harm its sales.

“Good ethics is good business,” says Blair Childs, executive vice president of AdvaMed. “It is not only good business for industry in terms of how it is viewed by the public, but also because it is the way responsible companies behave and want to behave.”

This is the main reason why AdvaMed created a more stringent Code of Ethics, which has been in place since January 2004. Regardless of whether political winds affected the timing of the code's introduction, its concepts are essential for industry to grasp no matter what the future brings. All device companies, not just AdvaMed members, should become familiar with it and adopt it to whatever extent feasible.

“It addresses everything from physician-education conferences to grants to charitable donations to gifts to consulting arrangements,” says Childs. “All major areas in which companies interact with healthcare professionals are addressed. If things are not done correctly, allegations could be made that a company is doing something illegal.”

Encouragingly, it appears more device companies are taking the guidelines to heart. Results of a survey of AdvaMed members by McKinsey & Co. were released in March at AdvaMed's annual meeting. It shows that 85% of respondents have policies in place regarding the ethics of promotion. It also found that 50% of respondents had updated or created new ethics policies in the past year. Many of those changes likely arose in response to the new AdvaMed code.

The message, however, must extend to those in the trenches, and not just be confined to platitudes from senior management. “We've noticed that when there are problems with promotional ethics, the company's management often did not know that these practices were going on,” says Childs. “They are done under the radar, by a rogue sales representative or people of that nature.”

Luckily, it appears that device companies are making an effort to get the message to the rank-and-file. The McKinsey survey shows that 75% of responding companies have trained sales representatives, marketing personnel, senior executives, and general managers in promotional ethics. The typical training program is once a year for 1–5 days.

In addition, many device companies now have a healthcare compliance officer that reports directly to the CEO. The officer is responsible for investigating any ethics complaint reported by a physician or other interested party. To ease the initiation process, AdvaMed's Web site shows how to find the healthcare compliance officers at most of its member companies.
These are very positive steps, but industry must remain vigilant. It cannot afford to regress once the political climate becomes more favorable again.

The Editors

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