PhRMA Code on Interactions with Healthcare Professionals

July 28, 2008

The Pharmaceutical Research and Manufacturers of America (PhRMA) recently published its first ever update to the Code on Interactions with Healthcare Professionals. To take effect in January 2009, this voluntary Code “reflects and builds upon the standards and principles set forth in its predecessor, the PhRMA Code on Interactions with Healthcare Professionals that took effect on July 1, 2002.” Stated in 15 enumerated sections and a lengthy Frequently Asked Questions appendix, the updated Code makes a number of significant changes to the self-imposed restrictions on participating manufacturers’ sales and marketing practices and interactions with healthcare professionals.

1. Meals. The Code continues to allow the offering of meals in connection with presentations on pharmaceutical products so long as the presentations “provide scientific or educational value and the meals are a) modest as judged by local standards; b) not part of an entertainment or recreational event; and c) provided in a manner conducive to informational communication.” The key change for manufacturers to be aware of is that that meals are to be limited to office or hospital settings, and cannot be located outside of physician offices. The Code specifically enumerates that so-called “dine and dash” programs are not appropriate. As was true under the earlier guidelines, entertainment and recreation are banned entirely regardless of the value of the entertainment or whether the entertainment is secondary to an educational purpose.

2. Continuing Medical Education. The Code continues to allow pharmaceutical manufacturers to support independent continuing medical education events. However, the updated Code specifies that companies should separate CME grant making functions from sales and marketing departments and should develop and apply objective criteria for making grant decisions so that financial support is not an inducement to prescribe or recommend a particular medication. The Code clearly sets forth the requirement that financial support must be given directly to the CME provider, rather than to a healthcare provider. PhRMA recommends compliance with standards for commercial support established by the Accreditation Council for Continuing Medical Education (“ACCME”) or other accrediting entities. Organizers of a CME event should control selection of content, faculty, educational methods, materials and venue and a supporting pharmaceutical manufacturer should have no control or input over these facets of a CME event. Further, a company should not support the cost of attendance for non-faculty healthcare professionals.

3. Consultants and Speakers. Companies may retain medical consultants so long as such arrangements are neither inducements nor rewards for prescribing or recommending a particular medicine or course of treatment. Reasonable compensation and reimbursement for expenses are permissible at fair market value. Indicia of a bona fide consulting arrangement include a written contract, a legitimate need for the services, selection of consultants in a fashion related to the identified purpose, retention of only a reasonable number of professionals, and maintenance of records and selection of venues conducive to consulting. Once again, recreational and entertainment events are prohibited if they involve healthcare professionals.

Companies may train speakers for speaker programs to enable health professionals to educate others. However, the Code emphasizes that all compensation must be reasonable and reimbursement can be made only for reasonable expenses. The Code specifically dictates that speaker training held at resort locations is not appropriate. Further, the Code FAQ section emphasizes the fact that training of a large number of speakers that will not actually be used for speaking programs is suspect. Each company should cap the total amount of compensation it will pay to an individual professional in connection with such arrangements. Speakers and the materials should identify the company that is sponsoring the presentation, the fact that the speaker is presenting on behalf of the company, and that the speaker is presenting information consistent with FDA guidelines.

4. Formulary Committee Members. Under a new provision, the Code states that a company should require any healthcare professional who is a member of a formulary committee and also serves as a speaker to disclose to the committee the existence and nature of his relationship with the company. This disclosure requirement should extend for at least two years beyond termination of any speaking or consulting arrangement. If the committee requires it, such professionals should recuse themselves from relevant decisions.

5. Gifts. Non-educational and practice-related gifts may no longer be distributed by manufacturers. Additionally, items intended for the personal benefit of healthcare professionals should not be offered. Under the Code, as revised, a company may not provide stethoscopes, pens, clipboards, mugs or other so-called “reminder” trinkets to providers. The Code continues to prohibit the distribution of non-practice related items such as golf balls, sports bags, and the like. Educational items for the benefit of providers or patients, such as textbooks, subscriptions to journals, or anatomical models for exam rooms may be offered so long as their value is $100 or less.

6. Data. The Code sets forth various parameters pursuant to which Companies may use non-patient identified prescriber data to facilitate communication with healthcare professionals. If companies elect to utilize this data, they should respect the confidential nature of prescriber data, develop policies regarding their use, educate employees and agents about those policies, maintain an internal contact person to handle inquires regarding data use, and identify appropriate disciplinary actions for misuse. The preferences of those healthcare professionals requesting that data not be made available to company sales representatives should be respected.

7. Training. Under a new provision, the Code requires companies to train their representatives about applicable laws, regulations, and industry codes of practice governing the representatives’ interactions with healthcare professionals. Companies should also train their representatives to have sufficient knowledge of general science and product-specific information to provide accurate and up-to-date information consistent with FDA requirements.

8. Annual Certification. In a provision that is reminiscent of portions of the Sarbanes-Oxley Act, PhRMA asks CEOs and compliance officers to certify annually that they have a mechanism in place to comply with the Code. Companies that publicly announce their commitment to abide by the Code and complete the annual certification will be identified by PhRMA on a public website. PhRMA encourages companies to obtain external verification of compliance at least once every three years.