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  • 1. What You Should Know about Gifts to Physicians from Industry Module 1: Overview of Ethical, Professional, and Legal Issues
  • 2. Authors
    • Karine Morin, LLM
    • Jacqueline M. Darrah, JD, MA
    • In collaboration with the Working Group for the Communication of Ethical Guidelines for Gifts to Physicians from Industry and its Educational Advisory Committee chaired by R. Van Harrison, PhD. University of Michigan School of Medicine. (See http://www. ama -assn.org/ ama /pub/category/8405.html for information about the Working Group)
    • Reviewers for this module included AMA staff, Working Group on Communication of Ethical Guidelines for Gifts to Physicians from Industry, and Kenneth V. Iserson, M.D., MBA, Director, Arizona Bioethics Program, University of Arizona.
    • Project Manager: Beverley D. Rowley, Ph.D. Medical Education and Research Associates, Inc. Tempe Arizona
    • Disclosure of Conflict of Interest
    • There are no conflicts to disclose from faculty, module authors, or members of the planning committee.
    • The content of this CME publication does not contain discussion of off-label uses.
  • 3. Disclosure of Conflict of Interest
    • Insert name and affiliation(s) of presenter
  • 4. Why the Increased Scrutiny?
    • Three key factors have prompted the medical profession to carefully consider the interactions between physicians and industry:
      • Media reports
      • Drug costs
      • Direct-to-consumer (DTC) advertising
  • 5. Quick Questions
    • Q1: How do the media present pharmaceutical industry practices?
    • Q2: Is the cost of drugs related to their promotion?
    • Q3: Does DTC advertising have an impact on prescribing habits?
  • 6. Module Goals and Objectives
      • To introduce general concepts related to professionalism, ethics, and the laws that pertain to physician-industry relations
      • To understand how these various factors are distinct or overlap, and to understand how they influence the interactions between physicians and industry
      • To analyze specific types of interactions between physicians and industry according to these factors
  • 7. Note
    • Laws are in constant evolution, as are the underlying precepts of professionalism and medical ethics. Federal agencies are constantly updating their regulations and providing interpretive guidance concerning the pharmaceutical industry and its relationship with physicians. As enforcement policies evolve or regulations change, taking any gift intended to affect prescribing may be defined as a bribe or kickback and may entail legal difficulty. Every physician should be aware of both current laws and ethical guidelines, and should consult with qualified legal counsel.
  • 8. Topic 1: Professionalism, Commerce, and Conflicts
    • This topic addresses:
      • Fundamental differences between professionalism and commerce in medical care
      • Issues related to conflicts of interest
  • 9. Physician vs. Industry Representative
    • A Physician
    • An Industry Representative
    In healthcare, what are the differences between physicians and industry representatives?
  • 10. Physician vs. Industry Representative
    • A Physician
      • Uses knowledge for altruistic purposes, highly valued by society
      • Is granted a large degree of freedom by society
      • Is regulated through a professional code of conduct
      • Has an obligation to provide impartial medical care that will benefit patients or promote public health
      • Has extensive scientific and medical training and expertise
      • Is trained to objectively analyze medical information
      • Has a lifetime commitment to education and training
    • An Industry Representative
      • Uses product-specific, generally proprietary knowledge for profit
      • Is self- and government-regulated
      • Engages in a for-profit, commercial activity
      • May have latest or detailed information on new agents, trials, treatment strategies, but…
      • May lack or be unable to disseminate relevant scientific knowledge due to restrictions (e.g., cannot discuss off-label applications)
      • Is trained to provide specific information about a product, often through promotion and advertising
    In healthcare, what are the differences between physicians and industry representatives?
  • 11. Medical vs. Promotional Information
    • Information among Medical Peers
    • Promotional Information
    What are the differences between general healthcare information and promotional information?
  • 12. Medical vs. Promotional Information
    • Information among Medical Peers
      • Balanced in terms of positive and negative content
      • Unregulated
      • Intended to facilitate good patient care
    • Promotional Information
      • Biased in terms of most advantageous content
      • Highly regulated by government agencies
      • Intended to increase sales
    What are the differences between general healthcare information and promotional information?
  • 13. Medical vs. Promotional Information
    • In the dissemination of information, physicians and industry…
    • a) share the same needs
    • b) have some needs in common
    • c) have only conflicting needs
  • 14. Medical vs. Promotional Information
    • In the dissemination of information, physicians and industry…
    • … have some needs in common.
    • As a market-driven entity, the industry may have certain goals in disseminating information that do not perfectly overlap with healthcare’s need for medical information.
  • 15. Conflicts of Interest
    • What are the key underlying issues?
      • A referee who is the parent of a player
      • Politicians required to disclose sources of funding
      • Integrity of TV ad testimonials
      • Commissions for boosting sales
      • Physicians disclosing sources of funding
  • 16. Gift-Giving – Quick Case 1
    • Judge  Lawyer
    • MD  Representative
    What is the impact of gift-giving on relationships between the following?
  • 17. Gift-Giving – Quick Case 1
    • Judge  Lawyer
      • Lawyer represents client
      • Lawyer and client interests are aligned
      • Gifts from lawyer may influence judge’s decision
      • Severe sanctions can be imposed
    • MD  Representative
      • Representative represents product and company
      • Interests of representative may not align with interests of patients
      • Gifts from representative may influence MD’s decision
      • Until recently, only egregious instances sanctioned, but now there is increased scrutiny
    What is the impact of gift-giving on relationships between the following?
  • 18. Gift-Giving – Quick Case 1
    • To maintain the same level of integrity and independent decision-making as that expected of a judge, physicians must ensure that they maintain an impartial relationship with industry representatives – free of any influences.
    What is the impact of gift-giving on relationships between the following? A judge and a lawyer vs A physician and an industry representative
  • 19. Conflicts of Interest
    • In each case there is the potential for:
      • dual loyalties
      • subjectivity in conflict with objectivity
      • varying accountability
  • 20. Fiduciary Characteristics
    • A fiduciary is one who:
      • holds a specialized knowledge or expertise
      • holds the trust of others
      • is held to high standards of conduct
      • avoids conflicts of interest
      • does not seek personal gain
      • is objective
      • is accountable or obligated (ethically and legally)
    How many of these characteristics apply to physicians? All of the characteristics should apply to a physician. Therefore, a physician is, in effect, a fiduciary, and should avoid conflicts that could undermine patient care.
  • 21. Avoiding Conflicts of Interest
    • When you have a conflict, potential conflict, or perceived conflict of interest, the best action is to…
    • a) avoid the conflict
    • b) disclose the conflict
    • c) mitigate the conflict
    • d) all of the above
  • 22. Avoiding Conflicts of Interest
    • When you have a conflict, potential conflict, or perceived conflict of interest, the best action is to…
    • … consider all options, including consulting legal counsel, if it appears that a conflict of interest could undermine the integrity of judgment in the evaluation or presentation of scientific data, or the integrity of a medical recommendation in the clinical setting.
  • 23. Primary and Secondary Interest
    • Primary Interest
      • Patient welfare
      • Developing new medical knowledge
    • Secondary Interest
      • Personal gain
      • Financial reward
      • Peer recognition
    What are examples of primary and secondary interests in healthcare? Gifts to physicians can interfere – or be perceived as interfering – with the fiduciary relationship between a physician and a patient, creating a possible conflict of interest. To avoid this, a proactive position on gifts to physicians can help mitigate or avoid conflicts of interest altogether.
  • 24. Conflicts of Interest – Quick Case 2
    • While evaluating a new type of scanner for a clinic, one of the manufacturers of the scanner being considered offers to fly the physician doing the assessment to a training center in a distant resort area for two days with all expenses paid.
    • What are the possible conflicts in this offer?
  • 25. Conflicts of Interest – Quick Case 2
    • While evaluating a new type of scanner for a clinic, one of the manufacturers of the scanner being considered offers to fly the physician doing the assessment to a training center in a distant resort area for two days with all expenses paid.
    • What are the possible conflicts in this offer?
      • Will this offer assist the physician in choosing the best scanner for the clinic?
      • Will the physician’s knowledge of competitive products be similar?
      • How may the objectives of the manufacturer conflict with those of the physician?
      • Will training be the only activity?
  • 26. Conflicts of Interest – Quick Case 2
    • What could be done to ensure there are no conflicts of interest?
    • The physician could:
      • accept training only after a supplier has been chosen
      • clarify that the training schedule and agenda are appropriate for the physician’s objectives
      • arrange transportation, lodging, and meals at own expense
  • 27. Professionalism, Commerce, and Conflicts Summary
    • To maintain the appropriate balance between “profession” and “commerce” of healthcare, physician-industry interactions should:
      • ensure the integrity of the physician-patient relationship
      • promote patient welfare
      • avoid any actual or apparent conflicts of interest
  • 28. Topic 2: Relevant Laws
    • This topic addresses three general legal issues regarding gifts:
      • Fraud
      • Kickbacks
      • Self-referral
  • 29. The Law In General
    • Government laws regarding fraud address financial issues:
      • filing false claims
      • paying or soliciting for or receiving bribes or kickbacks for referrals
      • self-referral schemes
    Fraud
  • 30. Fraud
    • False claims
      • Billing for goods or services for which reimbursement claims were filed, but which were not provided, or were not provided or billed in accordance with relevant rules
  • 31. Fraud
    • False claims
      • Billing for goods or services for which reimbursement claims were filed, but which were not provided, or were not provided or billed in accordance with relevant rules
    • 2. Bribes or kickbacks
      • Payments from a seller back to the buyer to induce a referral or purchase, including fee-splitting
  • 32. Fraud
    • False claims
      • Billing for goods or services for which reimbursement claims were filed, but which were not provided, or were not provided or billed in accordance with relevant rules
    • 2. Bribes or kickbacks
      • Payments from a seller back to the buyer to induce a referral or purchase, including fee-splitting
    • 3. Self-referral schemes
      • Physicians who have a financial relationship with a provider of designated healthcare services who refer Medicare or Medicaid patients to such providers
  • 33. Fraud
    • Unethical relations with industry…
    • A pharmaceutical company marketing a prostate cancer drug agreed to an out-of-court settlement of approximately $875 million in criminal penalties and damages under the False Claims Act.
    • This was in relation to practices considered improper, such as manipulating drug reimbursement regulations; providing improper incentives to physicians that influenced ordering of the drug; and violating FDA prohibitions on the sale of free drug samples.
  • 34. Fraud
    • Unethical relations with industry…
    • Although public attention focused on the fraud aspect, the inappropriate inducements between manufacturers and physicians led to the prosecution of physicians.
  • 35. Kickbacks
    • In general, the law prohibits individuals from knowingly and willfully soliciting or receiving, as well as offering to pay any remuneration, in return for or to induce:
      • referral of an individual to a person for the furnishing (or arranging for the furnishing) of any item or service…
      • purchasing, leasing, ordering (or arranging for, or recommending purchasing, leasing, or ordering) any good, facility, or item …
    • … covered by a federal healthcare program.
    Anti-Kickback Laws and Gifts
  • 36. Kickbacks
    • In August 1994, the Office of Inspector General (OIG) issued a Special Fraud Alert regarding suspicious behavior, such as:
      • marketing practices that appear to extend beyond traditional advertising or educational activities
      • certain arrangements that could undermine providers’ obligation “…to provide treatments and recommend products in the best interest of patients”
    Anti-Kickback Laws and Gifts
  • 37. Kickbacks
    • A gift would be considered in violation of the anti-kickback statute if it is…
      • made to a person in a position to generate business for the paying party
      • related to writing specific prescriptions
      • related to the volume of business generated
      • more than nominal in value and/or exceeds fair market value (of any legitimate service rendered to the payer)
      • related to the referral of patients
    Anti-Kickback Laws and Gifts
  • 38. Kickbacks Anti-Kickback Laws and Gifts
    • Before accepting a gift or any other financial benefit from a pharmaceutical or medical device company, a physician should consider the following questions:
      • Is the gift/reward/payment conditioned in whole or in part on referrals or other business generated?
      • Is the gift/reward/payment more than trivial in value?
      • Do fees for services exceed fair market value?
      • Does the gift/reward/payment have the potential to affect costs to any federal health care programs or their beneficiaries or to lead to over utilization or inappropriate utilization?
      • Would acceptance of the gift/reward/payment diminish, or appear to diminish, the objectivity of professional judgment?
    • If the answer to any of these questions is “yes”, then a potential legal concern arises.
  • 39. Self-Referral
    • If a physician has a financial relationship with an entity:
      • The physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under a federal health program
      • The entity may not present or cause to be presented a claim to any individual, third-party payer, or other entity for designated health services furnished pursuant to a referral prohibited by this law
      • [42 USC §1395nn(a)(1)]
    Anti-Self-Referral Laws and Gifts
  • 40. Relevant Laws Summary
    • To ensure compliance with laws addressing kickback and self-referral, physicians should be familiar with the specific language of any relevant federal and state statutes, as well as any applicable exceptions.
    • It is always advisable to seek qualified legal counsel .
    • The role of the FDA in issues related to physicians and industry representatives is addressed in Module 2: Physicians’ Expectations of Industry and Sales Personnel.
  • 41. Topic 3: Consulting
    • This topic addresses fundamental ethics and guidelines regarding:
      • Consulting for industry
      • Conducting research for industry
      • Speaking or writing on behalf of industry
  • 42. Consulting
    • Law
      • Specific description of professional services
      • Written agreement for services (more than one year)
      • Compensation established in advance
      • Fair market value compensation
      • Compensation independent of value or volume of referrals paid by federal or state healthcare
      • Reasonable to accomplish intended purpose of the agreement
      • Does not otherwise violate federal or state law
    • PhRMA Code
      • Legitimate need for the services identified
      • Selection of consultants directly related to the identified purpose
      • Appropriate use of services provided
      • Written contract specifies nature of services
      • Specified basis for payment
      • Appropriate venue and circumstances of any meeting
    How is legitimate consulting defined in law and the PhRMA Code? Service Agreements
  • 43. Consulting – Quick Case 3
    • Physicians are invited to a one-day consultants’ forum sponsored by a pharma company at a luxury hotel. Their opinions will be solicited on issues surrounding the management and care of patients with disease X and on a product’s marketing plan and positions.
    • The afternoon is free with tickets provided to the ball game and a gourmet buffet with open bar. Air transportation and hotel accommodations are covered, and participants will receive a $500 honorarium.
    • Are the physicians acting as true consultants?
  • 44. Consulting – Quick Case 3
    • Service
      • Legitimate need of service?
      • True exchange of professional services?
      • Appropriate use of specified services?
    • Contract
      • Written contract or agreement?
      • Services specified in contract?
      • Compensation specified in contract?
    • Compensation
      • Specified basis for compensation?
      • Fair market value compensation?
      • Compensation established in advance?
    • Other Considerations
      • Appropriate meeting venue?
      • Appropriate reason to meet?
      • Independent of referral value or volume?
    Are the physicians acting as true consultants?
  • 45. Consulting – Quick Case 3
      • Exchange of professional services is vague
      • No specific criteria determining the selection of consultants
      • No clear objective to the session
      • Honorarium assumed to be fair market value and set in advance
    • However, the absence of a contract, and the appropriateness of the venue and some of the activities, all shed doubt on the legitimacy of the activity.
    Are the physicians acting as true consultants?
  • 46. Compensation – Quick Case 4
    • Some physicians are demanding that drug company sales personnel pay for the physicians’ time.
    • Would “dollars for detail” be considered ethical according to government or industry regulations?
  • 47. Compensation – Quick Case 4
    • Some physicians are demanding that drug company sales personnel pay for the physician’s time.
    • Would “dollars for detail” be considered ethical according to government or industry regulations?
    • In a detail visit, physicians rarely provide a service – they are the recipients of information.
    • Therefore, the AMA’s Council on Ethical and Judicial Affairs recently stated that accepting compensation for a detail visit was inappropriate.
  • 48. Conducting Research for Industry
    • Physicians who participate in industry-sponsored research should ensure:
      • integrity of research and protection of human subjects
      • sound medical judgment is not influenced by third-party interests
      • compensation is related to services performed
      • compliance with ethical guidelines on potential conflicts of interest
      • adherence to funding, review, or publishing disclosure requirements
    Guidelines
  • 49. Research – Quick Case 5
    • Interested primary care physicians are invited to join a consultant program involving an educational conference on a common clinical condition. Each physician is asked to enlist 10 patients to participate in a clinical monitoring program that does not advocate any preferred pharmaceutical product.
    • Physicians also participate in two teleconferences to help educate colleagues. An honorarium of $200 is paid for each of the two-hour teleconferences.
    • What does or does not qualify this arrangement as
    • bona fide consulting?
  • 50. Research – Quick Case 5
    • Bona Fide
      • Compensation specified in advance
      • Fair market value
      • No value or volume of referral
    • Questionable
      • Vague specification of professional services
      • Questionable scientific basis of clinical monitoring program
      • No evidence of Institutional Review Board approval
      • No written or executed contract
      • Unspecified period [<1 year?]
      • Legitimate need for services not identified
      • Nonspecific physician selection criteria
      • Appropriate use? unknown
      • Appropriate venue? unknown
    What does or does not qualify this arrangement as bona fide consulting?
  • 51. Research – Quick Case 5
    • The guidelines for consulting for industry and for conducting research for industry have many similarities.
    • Before physicians participate in any research activity, they:
      • must have received Institutional Review Board approval of the protocol
      • must have received informed consent.
      • should consult federal and state laws and regulations
      • should consult relevant professional codes
    What does or does not qualify this arrangement as bona fide consulting?
  • 52. Speaking or Writing for Industry
    • When appropriate, physicians should follow:
      • guidelines applicable to CME programs
      • guidelines established by the International Committee of Medical Journal Editors
      • instructions from peer-reviewed publications
    Guidelines
  • 53. Speaking or Writing for Industry
    • Is the use of “guest authors” or “ghost authors”
    • an ethical practice?
  • 54. Speaking or Writing for Industry
    • Is the use of “guest authors” or “ghost authors”
    • an ethical practice?
    • Authors must take public responsibility for the work and have participated in the research, according to the International Committee of Medical Journal Editors (ICMJE), which sets the Uniform Requirements for Manuscripts Submitted to Biomedical Journals.
    • Whether as guest or ghost authors, there is misrepresentation: physicians who are identified, but who have not done the work they are credited with, receive professional recognition. This is unethical as it undermines the integrity of the research endeavor.
  • 55. Clinical Trials – Quick Case 6
    • Of 107 clinical trials published in 1984, industry-sponsored studies were:
      • 5 times more likely to favor new therapy
      • 11 times more likely to reach favorable conclusions
    • In 70 articles debating the efficacy of calcium-channel antagonists (CCAs), supportive authors were more likely to have:
      • relationships with manufacturers of CCAs than were neutral or critical authors
      • ties with competitor manufacturers as well as any manufacturer
  • 56. Clinical Trials – Quick Case 6
    • Physician
      • Independent, objective evaluation
      • Patient benefit
      • Obligation to share promising information
    • Industry
      • Positive interpretation
      • Market dominance and return on investment
      • Patent protection
    What does this suggest about the interests and obligations of physicians and industry in industry-sponsored clinical trials and articles? These data bring into question the objectivity of industry-sponsored trials and articles written by physicians on behalf of industry, emphasizing the importance of mechanisms put in place by medical journals, such as peer review and disclosure of research funding.
  • 57. Consulting Summary
    • Physicians should be familiar with potential conflicts of interest and potential legal concerns regarding ownership and investment interests in medical resources.
    • Service agreements should satisfy applicable guidelines when consulting, conducting research, or speaking or writing on behalf of industry.
    • The issue of gifts to physicians is addressed in detail in:
    • Module 3: Professional Issues Concerning Gifts to Physicians from Industry
    • Module 4: AMA Ethical Guidelines on Gifts to Physicians from Industry
  • 58. Module Review
    • General concepts related to professionalism, ethics, and laws regarding physician-industry relations:
      • Professionalism and commerce in medical care
      • Issues related to conflicts of interest
    • Laws that influence interactions between physicians and industry:
      • Fraud
      • Kickbacks
      • Self-referral
    • Specific types of interactions between physicians and industry:
      • Consulting for industry
      • Conducting research for industry
      • Speaking or writing on behalf of industry
  • 59. Take-Away Points
      • Physicians are professionals and retain unique responsibilities.
      • The “fiduciary” nature of the patient-physician relationship requires physicians to act according to high standards of conduct.
      • Physicians should ensure that interactions with industry are free of any conflicts of interest that could compromise or appear to compromise their judgment.
      • Most financial arrangements with industry should be reviewed with qualified legal counsel to verify that they conform to ethical guidelines and the law.
  • 60. What You Should Know about Gifts to Physicians from Industry
    • Module 2: Physicians’ Expectations of Industry and Sales Personnel
    • Module 3: Professional Issues Concerning Gifts to Physicians from Industry
    • Module 4: AMA Ethical Guidelines on Gifts to Physicians from Industry
  • 61. Feedback
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