Part 1: Updated Pharmaceutical Industry Marketing Code May Help All Providers Understand Current Standards
The following article is about a revised Code developed by the pharmaceutical industry that helps to establish standards for all providers' interactions with referral sources.
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Elizabeth E. Hogue, Esq.
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PhRMA, a trade association whose members are pharmaceutical research and biotechnology companies, recently updated its Code on Interactions with Health Care Professionals. The revised Code takes effect on January 1, 2022. Although the Code applies only to members of PhRMA who voluntarily agree to follow it, the Code may help providers to understand current standards regarding acceptable marketing practices.
With regard to taking lunches to physicians' offices, for example, the revised Code says that PhRMA members who elect to adhere to the Code may present information to healthcare professionals and their staff members during the workday, including at mealtimes. In connection with such presentations or discussions, the Code also says that it is appropriate for occasional meals to be offered as a business courtesy to the participants. The presentations must, however, provide scientific or educational value and meals must meet the following standards:
- Modest, by local standards
- Not part of an entertainment or recreational event
- Provided in a manner conducive to informational communication
- Limited to in-office or in-hospital settings
- Meetings do not include significant others or guests
- Incidental meals are provided only when there is a reasonable expectation and reasonable steps are taken to confirm that each attendee has a substantive interaction or discussion with representatives of the company. Consequently, “grab-and-go” meals are not appropriate.
With regard to entertainment and recreation, the Code says that to ensure the appropriate focus on education and informational exchange and to avoid the appearance of impropriety, companies should not provide any entertainment or recreational items to the theater or sporting events, sporting equipment, or leisure or vacation trips to any healthcare professional who is not a salaried employee of the company that receives the items.
The Code also says that entertainment and recreational benefits should not be offered, regardless of:
- The value of the items
- Whether the company engages the healthcare professional as a speaker or consultant
- Whether the entertainment or recreation is secondary to an educational purpose
Home health agencies, hospices, private duty agencies, and home medical equipment (HME) companies may be especially interested in what the Code says about payments to healthcare consultants, including physicians.
The Code recognizes a legitimate need for providers to obtain information or advice from medical experts. The Code also points out, however, that decisions regarding the selection or retention of healthcare professionals as consultants should be made based on defined criteria; such as general medical expertise, reputation or knowledge, and experience regarding particular therapeutic areas.
In addition to legal requirements included in applicable criteria of the safe harbors of the federal anti-kickback statute and exceptions to the Stark laws, the Code specifically requires members of PhRMA who voluntarily adhere to it to meet the following additional requirements:
- Enter into a written contract that specifies the nature of the consulting services to be provided and the basis for payment of those services
- There must be a legitimate need for the consulting services that has been clearly identified in advance of requesting the services and entering into arrangements with prospective consultants
- Criteria for selecting consultants must be directly related to the identified purpose and persons responsible for selecting consultants must have the expertise necessary to evaluate whether particular health care professionals meet those criteria
- The number of health professionals retained is not greater than the number reasonably necessary to achieve identified purposes of the services
- Providers that pay consultants maintain records concerning and make appropriate use of the services provided by consultants
- The venue and circumstances of any meeting with consultants are conducive to the consulting services and activities related to the services are the primary focus of the meeting. Resorts are inappropriate venues, according to the Code.
Although the Code described above applies only to members of PhRMA who voluntarily agree to adhere to it, the Code may be viewed as establishing standards in the industry regarding relationships with referral sources.
©2021 Elizabeth E. Hogue, Esq. All rights reserved.
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