Survey: Medtech Firms Adopting AdvaMed Code of Ethics
According to a recently released survey from PricewaterhouseCoopers LLP (PwC; New York City), medtech firms are recognizing the need to put in place compliance systems and procedures to combat the potential for fraud and abuse in their marketing programs and sales practices. The findings revealed a nearly 100% adoption rate for the “Code of Ethics on Interactions with Healthcare Professionals” developed by industry association AdvaMed (Washington, DC).
Additionally, the survey reported that two-thirds of company presidents or CEOs have personally endorsed the AdvaMed code in a letter to employees or customers. In addition, 90% apply it to every level of their organization, regardless of seniority or title, and 75% have posted information about their compliance with the code on their companies’ Web sites. About 70% track all meals, gifts, travel, lodging, and honoraria provided to healthcare professionals, and nearly all have linked sales compensation with code compliance in some manner.
According to the survey results, most large medical device firms have instituted controls for interactions with healthcare professionals. These controls include agreements that promote ethical behavior, as well as methods for determining the fair market value of gifts, entertainment, and other remuneration of services, and for ensuring that value is actually received in return for the engagement of healthcare professionals.
The survey notes that companies are increasingly placing restrictions on the involvement of sales forces in relation to grant requests. In addition, committees are frequently established for grant review and approval.
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| PwC’s Peter Claude: Efficient adoption is key. |
“The industry has taken the AdvaMed code to heart,” says Peter Claude, a partner in PwC’s life sciences advisory practice. “It is clear that medical device firms have seized the opportunity to better integrate ethical standards into their organizations. The key will be to do this in an efficient manner and to connect their compliance obligations with broader corporate goals to improve their performance and competitive advantage.”
Claude adds, “Medical device companies largely enjoy a positive image among healthcare providers and the public—a status they obviously want to maintain and enhance. Initiating systems and procedures to guard against fraud and abuse is seen as a logical, proactive step for most of the surveyed companies.”
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| PwC’s Riewerts: Challenges in implementation. |
Brian Riewerts, also a partner in PwC’s life sciences advisory practice, notes, “Acceptance of the need for compliance with the AdvaMed code is one thing, but implementation is quite another. Putting these kinds of systems and procedures in place often goes to the heart of a company’s culture and the way it conducts its business. It’s serious stuff. While practices are mixed across the industry, we hope that by creating a series of compliance benchmarks, we can share better practices in hopes that they will encourage more-effective implementation of compliance across the industry.”
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The survey was distributed in March 2006 to 40 medtech firms, including the largest medical device firms in the United States with global annual sales of more than $1 billion. The reported results are based on responses from the 20 companies that completed the survey.
In related news, AdvaMed recently announced that medtech companies will soon be able to “self-certify that they have implemented compliance policies consistent with the code and maintain a robust compliance infrastructure, enabling them to display the AdvaMed code logo.”
AdvaMed was aware of the PwC survey, but had no involvement in its development, analysis, or funding.
© 2006 Canon Communications LLC
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