Table Of Content

M ANAGING R ELATIONSHIPS I WITH NDUSTRY •••••••••• A Physician’s Compliance Manual This page intentionally left blank M ANAGING R ELATIONSHIPS I WITH NDUSTRY •••••••••••••••••• A Physician’s Compliance Manual Steven C. Schachter, MD William Mandell, Esq L. Scott Harshbarger, Esq Randall Grometstein, JD, PhD AMSTERDAM•BOSTON•HEIDELBERG•LONDON NEWYORK•OXFORD•PARIS•SANDIEGO SANFRANCISCO•SINGAPORE•SYDNEY•TOKYO AcademicPressisanimprintofElsevier AcademicPressisanimprintofElsevier 30CorporateDrive,Suite400,Burlington,MA01803,USA LinacreHouse,JordanHill,OxfordOX28DP,UK Firstedition2008 Copyright©2008StevenSchachter,WilliamMandell,ScottHarshbarger,andRandall Grometstein.PublishedbyElsevierInc.Allrightsreserved. TherightsofStevenSchachter,WilliamMandell,ScottHarshbarger,andRandallGrometstein tobeidentifiedastheauthorsofthisworkhavebeenassertedinaccordancewiththeCopyright, DesignsandPatentsAct1988 Nopartofthispublicationmaybereproduced,storedinaretrievalsystem ortransmittedinanyformorbyanymeanselectronic,mechanical,photocopying, recordingorotherwisewithoutthepriorwrittenpermissionofthepublisher. PermissionsmaybesoughtdirectlyfromElsevier’sScience&TechnologyRights DepartmentinOxford,UK:phone(+44)(0)1865843830;fax(+44)(0)1865853333; email:permissions@elsevier.com.Alternativelyyoucansubmityourrequestonlineby visitingtheElsevierwebsiteathttp://elsevier.com/locate/permissions,andselecting ObtainingpermissiontouseElseviermaterial. Notice Noresponsibilityisassumedbythepublisherforanyinjuryand/ordamagetopersons orpropertyasamatterofproductsliability,negligenceorotherwise,orfromanyuse oroperationofanymethods,products,instructionsorideascontainedinthematerial herein.Becauseofrapidadvancesinthemedicalsciences,inparticular,independent verificationofdiagnosesanddrugdosagesshouldbemade. BritishLibraryCataloguinginPublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary. LibraryofCongressCataloging-in-PublicationData Managingrelationshipswithindustry:aphysician’scompliancemanual/StevenC.Schachter(cid:2)(cid:2)(cid:2)[etal.]. p.;cm. Includesbibliographicalreferencesandindex. ISBN978-0-12-373653-6(alk.paper) 1. Medicalethics—UnitedStates. 2. Medicalinstrumentsandapparatusindustry—UnitedStates. 3. Advertising—Medicine—UnitedStates. 4. Medicallawsandlegislation—UnitedStates. I. Schachter,StevenC. [DNLM: 1. Physicians—ethics—UnitedStates. 2. Physicians—legislation&jurisprudence— UnitedStates. 3. DrugIndustry—ethics—UnitedStates. 4. DrugIndustry—legislation& jurisprudence—UnitedStates. 5. Ethics,Institutional—UnitedStates. 6. HealthCareSector— ethics—UnitedStates. 7. HealthCareSector—legislation&jurisprudence—UnitedStates. W50M2662008] R724.M1732008 174.2—dc22 2008011043 ISBN:978-0-12-373653-6 ForinformationonallAcademicPresspublications visitourwebsiteatbooks.elsevier.com PrintedandboundinUnitedStatesofAmerica 08 09 10 10 9 8 7 6 5 4 3 2 1 Working together to grow libraries in developing countries www.elsevier.com | www.bookaid.org | www.sabre.org •••••••••• D EDICATIONS •••••••••••••••••• Steven C. Schachter: To my wife Susan for her loving support; to my co- authors for their hard work and encouragement; to Scott, who inspired me to launch this project; and to patients everywhere and their physicians. William Mandell: Writing a book is a very selfish endeavor, particularly when you do not give up your day job, as one must spend countless nights and weekends focused on researching and writing, taking precious time away from family. I thank Janette, Edward and Robbie for their patience and David, Alyce and Ilenna for their moral support. I want to express my appreciation for my co-authors who contributed their unique perspectives andmadetheprocessofplanningandexecutingthisbookatrulyenjoyable experience. A debt of gratitude must also be conveyed to my law firm col- leaguesatPierce&Mandellwhoallowedmethetimenecessarytocomplete this project. I also must thank those clients and friends, from the fields of medicine and the drug and device industries, who shared their views and storiesandprovidedvaluablefeedback.Finally,Idedicatemycontributions to this book to my late father, Eddie, and my late mother-in-law, Rebecca. L. Scott Harshbarger: I am grateful for the dedication of my co-authors to the ethical imperatives of medical practice in this increasingly complex and financially driven profession. I welcome this opportunity to recognize thedevotionofmywife,JudyStephenson,tothelawasateacherandtrue believer, and to my executive assistant, Angela Frontiera, for her immense skill and patience. We all need, and depend on, the skill and compassion of our Doctors for a healthy, quality life. v vi Dedications Randall Grometstein: To my husband, John Pustell, and my parents, Alan andMargaretGrometstein,fortheirloveandsupport;toScott,foradecade of discussions about ethics and other fascinating topics; to Bill and Steve, for their engagement with putting ethics into practice; and to my students, whose explorations have enriched my own. •••••••••• C ONTENTS •••••••••••••••••• FOREWORD XIII PREFACE XXV CONTRIBUTORS XXXIII 1. BACKGROUND 1 The Era of Big Business 4 Physicians and Industry Sales Representatives 7 Physicians Involved with Marketing to Other Physicians 15 Continuing Medical Education 16 Paying Doctors to Enroll Patients in Clinical Trials 17 Other Conflicts of Interest 18 2. OVERVIEWOF LEGAL SOURCES 21 Anti-kickback Laws 23 Safe harbors 27 Interplay Between Anti-kickback and Stark Laws 39 Stark and Physician Self-Referral Laws 39 DruganddevicecompaniesaregenerallynotStark“entities” 40 Financial relationships under Stark 42 Sanctions 43 Indirect financial relationships and exceptions 44 Direct financial relationships 46 Federal False Claims Act 50 Whistleblower Qui Tam Actions 52 vii viii Contents Use of the Federal False Claims Act (FCA) to Pursue Alleged Anti-kickback and Stark Violations 52 Civil Monetary Penalties 54 Exclusion from Medicare and Medicaid Programs 54 State False Claims Acts and Whistleblower Laws 55 State Laws Regulating Marketing to Physicians 56 Food and Drug Administration 60 Off-label Uses and Marketing 62 Medicare Part D, Medicaid Drug Coverage and Other Program Changes to Prescription Drugs Coverage 67 Risks to Physicians 70 3. SUMMARYOF RECENT PROSECUTIONSAND INVESTIGATIONS 73 Active Enforcement 73 The Prosecutable Case 76 Whistleblower as Private Attorney General 77 Settlements and Dispositions 78 Case Examples 79 Anti-kickback cases 79 Off-label marketing cases 84 Free sample/“marketing the spread’’ cases 94 Food, Drug, and Cosmetic Act False Statements Cases 100 Group purchasing organization cases 100 Physician Defendants in Cases Involving Financial Relationships with Industry 102 4. APPLICATIONSOF LAWAND PROFESSIONALAND TRADE ASSOCIATION STANDARDS TO PHYSICIAN RELATIONSHIPS WITH INDUSTRY 107 Office of Inspector General Reports 108 Office of Inspector General Special Fraud Alert 111 Office of Inspector General Compliance Program Guidance 112 Hospitals 113 Medical practices 115 Pharmaceutical manufacturers 116 Centers for Medicare and Medicaid Services Drug Manual 120 Corporate Integrity Agreements 122 Trade Association Codes of Conduct 122 PhRMA Code 123 AdvaMed Code 125 Contents ix International Federation of Pharmaceutical Manufacturers and Associations Code of Pharmaceutical Marketing Practices 127 URAC Pharmacy Benefit Management Draft Standards 129 Medical Association and Society Codes of Conduct 130 American Medical Association Ethical Opinion 8.061 on Gifts to Physicians from Industry 130 The American Medical Association Position versus the No-Gift Movement 132 Other societies 134 Continuing Medical Education 139 Food and Drug Administration 140 Accreditation Council for Continuing Medical Education 141 Government interest 145 Medical education and communication companies 146 Clinical Practice Guidelines 147 Academic Medical Center Conflict-of-Interest Policies 147 Community Hospitals and Physician-Owned Medical Practices 151 5. LEGALAND ETHICAL ASPECTSOF SPECIFIC PHYSICIAN–INDUSTRY FINANCIAL RELATIONSHIPS 153 Gifts, Meals and Visits by Company Sales Representatives 158 The law on gifts to physicians 164 Manufacturer’s support 167 Applicable state laws 168 The ethics of gifts to physicians 171 Detailing and Training 179 The law on detailing and training sessions 180 The ethics of detailing and training sessions 181 Continuing Medical Education 198 The law on continuing medical education 199 The ethics of continuing medical education 201 Non-CME Activities/Company Speakers Bureaus 205 The law on speaking for companies 205 The ethics of non-CME educational activities 206 Consulting and Other Service Arrangements 207 The law on consulting 208 The ethics of consulting 210 Preceptorships 211 Research Funding 212 The law on research funding from industry 213 The ethics of research funding from industry 214