June 27, 2006

Device and diagnostics companies should integrate compliance standards more effectively into their sales and marketing efforts if they want to meet evolving regulatory requirements and avoid government enforcement actions, experts said at a recent industry conference.

Federal and state regulations are increasingly restricting the largesse firms can legally shower upon existing or prospective customers. As a result, aggressive promotional campaigns to purchasers are becoming a thing of the past and manufacturers need to revamp their way of doing business accordingly, Neal Roach, former vice president of ethics and compliance at Roche Diagnostics, said.

Agencies such as the HHS' Office of the Inspector General (OIG) pay close attention to promotions firms engage in with healthcare professionals (HCPs) that may breach fraud and abuse laws, said Roach, who is currently a partner with the law firm Sommer Barnard in Indianapolis. Addressing the Medical Device and Diagnostics Marketing Compliance Congress, June 20, he said firms should carefully monitor programs such as rebates, coupons, off-label promotions, consulting arrangements and physician training.

Roach suggested that firms build AdvaMed's code of ethics into their compliance programs. The code tells firms "how you can interact with your customers in ways that don't conflict with the anti-kickback statute."

The anti-kickback statute has existed since 1972 and "prohibits anyone from knowingly and willfully receiving or paying anything of value to influence the referral of federal healthcare program business," according to OIG. "Violations of the law are punishable by up to five years in prison, criminal fines up to $25,000, administrative civil money penalties up to $50,000, and exclusion from participation in federal healthcare programs," the agency notes.

The AdvaMed code reminds firms that, while they may provide reimbursement information to HCPs regarding their products, it is inappropriate for manufacturers to provide technical or other support "for the purpose of unlawfully inducing [HCPs] to purchase, lease, recommend, use, or arrange for the purchase, lease or prescription of [their] products." ()a href="http://www.fdanews.com/ddl/33_26/" target=_blank>