By Jeffrey B. Miller, Esq.
Manufacturers, physicians and hospitals around the world strive to provide the highest quality health care products and services to their patients. It is no secret, however, that while they share a common goal for quality patient care, they have disparate financial interests. This dynamic creates an incentive for manufacturers to support physician education, including continuing medical education, to ensure knowledgeable physicians that can utilize their products. This support often comes in the form of financial grants for continuing medical education courses. Many view this financial support suspiciously, however, warning that it can inappropriately influence physicians’ relationships with individual manufacturers, or their views of products’ uses. The purpose of this article is to provide an introduction to the primary U.S. federal laws as they apply to manufacturer support of continuing medical education, and to provide an update on current federal initiatives designed to regulate these relationships.
The primary federal law that governs physician-manufacturer financial arrangements is the Federal Anti-kickback Statute. This statute broadly prohibits what many refer to as bribery – knowingly and willfully offering, paying, soliciting or receiving anything of value (including free CME) with the intent to induce the referral of patients or business. In the CME context, value could include paying tuition for courses, funding physician expenses such as travel or lodging, or providing entertainment, meals or gifts. In reviewing these matters, enforcement authorities generally need only show that one purpose of a transaction is to induce business. Violation of the statute is a serious crime. It is classified as a felony, and is punishable by exceedingly large fines and imprisonment for up to five years. Upon conviction, the government is required to exclude persons and/or entities from participation in government-related health care programs (e.g., Medicare, Medicaid and Tri-Care).
A second significant law governing physician-manufacturer relationships is the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA imposes limits on how manufacturers of regulated products may advertise. Under the FDCA, manufacturers are limited to promoting FDA-approved products, and only for FDA-approved uses. Significantly, the FDA has no jurisdiction over physicians’ practice of medicine. As a result, the FDA can not and does not regulate discussions or exchanges of information regarding off-label uses solely by or between physicians. This is significant for CME events, which are forums for physician discussions of clinical practice. Importantly, such discussions must be solely attributable to physicians, without manufacturer influence designed to encourage prohibited discussions.
Arising Issues and Attempted Solutions
For many years, institutional academic-industry relationships have been prevalent and have had the potential to result in physician-related conflicts of interest. In a recent attempt to analyze the nature, extent and consequences of this matter, the Institute on Medicine as a Profession (IMAP) conducted a survey of a large sample of U.S. physicians. Published in the New England Journal of Medicine in April, 2007, this survey reported that 60 percent of all physician department chairs had some form of personal financial relationships with industry. Sixty-seven percent of academic-institutional departments, as administrative units, had financial relationships with industry, including 65 percent of all clinical departments benefiting from the support of continuing medical education. As demonstrated in this survey, the influx of industry support for continuing medical education appears to be pervasive.
The considerable support that industry has provided for CME has not gone unnoticed by physicians. Not surprisingly, physicians were the first to react to allegations that industry support of physician education could create conflicts of interest that would compromise patient care. As early as 1992, the American Medical Association (AMA) began issuing guidelines for its member-physicians regarding the receipt of financial support for continuing medical education. While approving of the acceptance of this support as “contributing to the improvement of patient care,” the AMA nevertheless warned physicians that the acceptance of any financial support personally could influence, or appear to influence, the physicians’ use of industry products. As a result, physicians were advised not to personally accept financial support to attend CME events. Instead, all financial support from manufacturers should be provided to the organization providing the CME event, which may in turn use the funds to defray the costs of the event. To further guard against inappropriate influence or appearance, the AMA also advised that financial subsidies should not be accepted, directly or indirectly, to pay for the costs of physicians’ travel, lodging or other personal expenses, nor for physicians’ time. Subsidies for hospitality should only be accepted for modest meals or social events that are held as part of the conferences or meetings.
Following the AMA’s led, manufacturer industry associations also worked to develop guidelines for their own members. In 2002 the Pharmaceutical Research and Manufacturers Association of America (PhRMA) developed and published a code of conduct governing academic-institution industry relationships. Entitled the “Code of Interactions with Healthcare Professionals” (PhRMA Code), this code supports pharmaceutical companies in their efforts to provide financial support for CME events, proffering that such support “contributes to the improvement of patient care.”
Similarly recognizing that “adherence to ethical standards and compliance with applicable laws are critical to the medical device industry’s ability to continue its collaboration with health care professionals,” the medical device industry entered the fray as well. On January 1, 2004 the Advanced Medical Technology Association (AdvaMed) created its own set of guidelines specifically designed for medical device manufacturers. These guidelines, known as the Code of Ethics on Interactions with Health Care Professionals (AdvaMed Code), were generated to help to ensure that medical device company financial support for physician education serves the goals of quality patient care and patient safety.
Similar in their intent and content, these industry codes generally provide a series of limitations and safeguards on manufacturer support of CME. For example, the codes provide that manufacturers should only support CME events that are held at “appropriate locations.” To determine appropriateness, manufacturers should consider whether the locations demonstrate that the gatherings are primarily dedicated, both in time and effort, to promoting objective scientific and educational activities, and that the main incentives for bringing attendees together are to further their medical education. Desiring to avoid direct conflicts of interest, the codes also provide that manufacturers should not provide financial support to any individual physicians. Instead, all financial support should be provided directly to the CME sponsors, which should then use the support to defray the overall costs of the CME events. Similarly, the codes provide that manufacturer-supported meals and receptions are permissible where they are both modest and conducive for discussion among CME faculty and attendees, and are subordinate in the amount of time spent at the CME event on educational activities. Finally, the codes direct that the CME sponsors should have exclusive control over the CME course content, the CME faculty, the educational methods used, the educational materials provided and the CME venue.
Despite the voluntary promulgation of guidelines and limitations by these organizations, this issue appears to be headed towards a boiling point in the halls of the United States Congress. In June, 2005 Senators Max Baucus (D-MT) and Charles Grassley (R-IA), Chairman and Ranking Member of the Senate Committee on Finance, began formal inquiries of the 23 largest drug manufacturers in the U.S. following allegations that they were utilizing educational grants to promote off-label uses for their medications. This past April, the U.S. Senate Committee on Finance released a committee staff report to the Chairman and Ranking Member on the use of educational grants by pharmaceutical manufacturers. In the report, the committee staff concluded that while the pharmaceutical industry is paying increased attention to its compliance with federal law, some CME events, and their associated physicians, are still improperly influenced by industry sponsors. Supporting its conclusions, the report cited several specific instances of improper influence, including a 2004 instance where Warner-Lambert paid $430 million to settle allegations that it funded purportedly independent educational events to promote its anti-epilepsy drug, Neurotin for off-label uses, and a 2005 instance where Serono Laboratories paid $704 million to settle allegations that it engaged in the same improprieties related to its drug, Serostim.
While physicians, industry and the OIG have worked to protect the interests of patients, in light of the current activity in Congress it is likely that the development of additional law and regulation will be an important issue for some time.
Jeffrey B. Miller, Esq., is Chief Compliance Officer of Synthes, Inc.