Interactions with Pharmaceutical Industry Representatives
Pharmaceutical manufacturers come under two voluntary but powerful guidance documents meant to establish the ground rules for interactions between drug producers and representatives and health care professionals. These documents include the 2003 Department of Health and Human Services Office of the Inspector General's (DHHS OIG) Compliance Program Guidance for Pharmaceutical Manufacturers and the 2002 Pharmaceutical Research and Manufacturers of America's (PhRMA) PhRMA Code on Interactions with Healthcare Professionals. The Health Insurance Portability and Accountability Act privacy regulations are also implicated by physician relationships with pharmaceutical representatives.
The AMA also offers FAQs.
OIG Compliance Program Guidance for Pharmaceutical Manufacturers
The Guidance provides pharmaceutical manufacturers with guidelines to consider when developing anti-fraud and abuse compliance programs. This document is the product of collaboration between members of the pharmaceutical industry, federal agencies and other interested groups, such as the AMA. Only parts of this Guidance speak to industry interactions with physicians. Most significant are the "Anti-Kickback law" considerations.
The OIG identifies a number of situations that have a "significant potential for abuse." While the guidance approaches this subject from the perspective of the manufacturer's potential liabilities, a physician would be wise to steer clear of risky scenarios. Remunerative relationships between the manufacturer and physician, or others who are in a position to generate federal health care business for the manufacturer, could be problematic. If the purpose of the remuneration is to induce or reward the referral of business payable by a federal health care program, the Anti-Kickback statute may be implicated.
Physicians should beware of gifts or other incentives offered by manufacturers or their representatives if the underlying intent is to create business billable to the federal government. Even where the gift or service supplies a legitimate benefit to the doctor or is provided at fair market value, any illegal intent will make the whole gift suspect. Potential legal issues will be abated with certainty only if the incentive arrangement fits squarely into a safe harbor.
The Guidance document discusses the most common potentially illegal arrangements, including:
- "switching" arrangements (in which the physician is encouraged to switch patients to the manufacturer's drug from a competing drug);
- consulting and advisory payments (e.g., where the physician is given a fee for listening to a marketing pitch);
- payments for detailing (e.g., where the physician is given a substantial fee for completing minimal paperwork);
- business courtesies and other gratuities; and
- educational and research activities (e.g., where physicians are paid above market rates for unnecessary research).
When an arrangement between a provider and manufacturer cannot be made to fit exactly into a safe harbor, a number of factors will be taken into consideration to determine the propriety of the arrangement. Factors include:
- the nature of the relationship between the parties;
- how remuneration is determined;
- the value of the remuneration;
- the potential impact of the remuneration on federal programs; and
- the existence of conflicts of interest.
Since these factors must be balanced in order to determine if an arrangement is appropriate, there is a good deal of uncertainty involved. Legal counsel should be consulted to assess risk.
PhRMA Code on Interactions with Healthcare Professionals
The PhRMA Code establishes voluntary guidelines for pharmaceutical manufacturers as related to marketing interactions with health care professionals, and specifically the gifts and gratuities given to health care professionals. The OIG Guidance reminds that compliance with the Code does not constitute a safe harbor. The OIG does state, however, that compliance "will substantially reduce the risk of fraud and abuse and help demonstrate a good faith effort to comply [with applicable federal laws]."
The Code attempts to ensure that "all interactions [between manufacturers and health care professionals are] focused on informing healthcare professionals about products, providing scientific and educational information, and supporting medical research and education," according to PhRMA.
The Code suggests that manufacturer gifts and services to physicians must primarily benefit patients or be for the education of the physician, not be of substantial value (under $100) and only offered occasionally. For example, it would be appropriate for a physician to receive a stethoscope, but not a golf bag.
Certain sales traditions of the past are no longer allowable under the HIPAA privacy regulations. Drug representatives may not have free access to exam rooms or patient records. While the regulations do not require a drug representative to sign a Business Associate Agreement or a more general confidentiality agreement, physicians should take basic precautions to protect patient confidentiality. Records must not be left out in plain view, nor should representatives have free access to the office. Of course, if a physician would feel more comfortable to have a confidentiality agreement in place, the regulations do not prohibit such measures.
Any activity that would give a sales representative access to protected health information (PHI), such as sitting in the exam room or viewing an patient's file for general data, first requires that the patient sign an authorization allowing the PHI to be shared.
To learn more about appropriate disclosures under HIPAA, see all of the piece on Gifts to Physicians.
Search AMA's PolicyFinder for all policies on gifts to physicians.