OIG issues drug marketing guidelines

It's unclear whether physicians also will be subject to investigation for violations.

By Andis Robeznieks, AMNews staff. Oct. 21, 2002. Additional information

Pharmaceutical marketing practices are likely to face more scrutiny now that the federal government has weighed in on what could make the companies the subject of fraud and abuse investigations.

The making and marketing of pharmaceutical products was the subject of a 44-page document released by the Dept. of Health and Human Services' Office of Inspector General on Sept. 30.

The federal government report is the latest look at the relationship between pharmaceutical representatives and physicians and others who interact with them.

The Pharmaceutical Research and Manufacturers of America in July enacted stringent guidelines for its members, and the AMA has stepped up its campaign to educate doctors on guidelines it has had for several years.

In some areas, the document -- signed by Inspector General Janet Rehnquist -- hints that it is merely a handy guide to be used for manufacturers' own in-house policing efforts:

"This guide is not a compliance program," the OIG document states. "Rather, it is a set of guidelines that pharmaceutical manufacturers should consider when developing and implementing a compliance program or evaluating an existing one."

More than half of pharmaceutical marketing and advertising aimed at physicians involves free samples.

In other passages, it warns that adhering to the PhRMA Code on Interactions with Healthcare Professionals is merely a "good starting point" and "will not necessarily protect a manufacturer from prosecution or liability for illegal conduct."

"The OIG recommends that pharmaceutical manufacturers at a minimum comply with the standards set by the PhRMA code," the document states. "Arrangements that fail to meet the minimum standards set out in the PhRMA code are likely to receive increased scrutiny from government authorities."

Arnold & Porter, a Washington, D.C., law firm that counsels pharmaceutical and medical device companies, released an analysis of the document explaining that "while the pharmaceutical guidance, like prior OIG guidances, is voluntary, the OIG's suggestions could become 'de facto' standards for the industry."

The OIG guidance also notes that any compensation arrangement between manufacturers and sales agents involving items or services paid for by federal health care programs "potentially implicates the anti-kickback statute." This statute, according to Arnold & Porter, "is a criminal prohibition against payments made purposefully to induce or reward referrals of federal health care business."

Possible violations of the anti-kickback statute noted in the guidance include consulting arrangements that do not reflect actual and necessary services and were created "to disguise otherwise improper payments."

The public has been given 60 days to comment on the document. Several groups, including the AMA, are expected to weigh in.

"The AMA will work closely with its federation societies to carefully review the draft compliance program guidelines for pharmaceutical manufacturers before submitting our comments to the Office of Inspector General," said AMA Board Chair J. Edward Hill, MD, in a statement.

Jeff Trewhitt, spokesman for the 80 drug and biotechnology companies represented by PhRMA, said pharmaceutical companies should view the document as a resource.

"Much of what is covered in [the] guidelines, but not all, involves issues that have already been addressed," Trewhitt said. "But we now have a document from the government that provides a guide, and some companies will find it potentially valuable."

The PhRMA code, which now forbids practices such as phony consulting arrangements and giving prescribing doctors gifts that have no value to patients, went into effect July 1.

Rather than being insulted by having the PhRMA code described as a "starting point," he said it was gratifying to see the prominence the code was given by the inspector general.

Alan R. Nelson, MD, a former AMA president and leader of the AMA education campaign on industry gifts, said there was one clear difference between what the government proposes and what the AMA and PhRMA already have on the books.

"The big story would be that the AMA and PhRMA codes are voluntary," he said, noting that -- although compliance to OIG guidelines appears to be voluntary -- government investigators have the power to "make life miserable with their demands for information."

"Also, you have to remember that a lot of companies don't belong to PhRMA," Dr. Nelson added. This "suggests the government will be paying additional attention to this area of concern because of the escalating costs."

This point was echoed in the Arnold & Porter analysis, which noted that the OIG guidance "represents a significant attempt by HHS to address certain pharmaceutical practices that could affect federal reimbursement rates and rebates, as well as the drugs prescribed to beneficiaries of federal health care programs such as Medicare and Medicaid."

Trewhitt disagreed with the notion that the cost of drugs could be reduced by curbing excessive marketing practices. "When you look at all aspects of marketing and advertising, more than half -- at least 55% -- involve free samples," he said. "And we believe most doctors support that."

The OIG document states that, while beneficial to patients, free drug samples can be "an area of potential risk" to drug companies and warns that selling drug samples could violate the Prescription Drug Marketing Act of 1987 and trigger false claim or kickback investigations.

While the hint has been dropped that pharmaceutical marketing is going to be subject to greater oversight, Dr. Nelson believes physicians who follow the basic rules will not be at risk of being investigated.

"It certainly isn't clear from this point that it poses a particular threat to physicians," he said. "It seems the initial scrutiny would be on the industry ... [which] almost certainly is going to be making special efforts so they won't have to tangle with them."

Dr. Nelson admitted that a certain attitude persists among physicians that, because sales representatives in every other industry can wine and dine their customers, doctors are entitled to the same treatment.

"One can make that argument," he said. "What the AMA working group has said is that physicians have a fiduciary duty to patients to not have personal financial considerations be included in the advice they give and should not have any financial conflicts of interest."

ADDITIONAL INFORMATION:

Yes is a no-no

An affirmative answer to any of these questions means the gift arrangement could attract government attention.

Is the gift or other benefit made to a person in a position to generate or influence business for the paying party?
Does the gift or other benefit take into account, directly or indirectly, the volume or value of business generated (e.g., is the payment or gift only given to persons who have prescribed or agree to prescribe the product?)
Is the gift or benefit more than nominal in value and/or does it exceed the fair market value of any legitimate service rendered to the payer?
Is the gift or benefit unrelated to any services at all other than the referral of federal health care business?

Source: Dept. of Health and Human Services' Draft OIG Compliance Program Guidance for Pharmaceutical Manufacturers

Weblink

Draft OIG compliance guidelines for pharmaceutical manufacturers (http://www.seniors.gov/articles/1002/draft-pharma-guide.htm)

Arnold & Porter analysis of OIG draft guidance, in pdf (http://www.arnoldporter.com/pubs/files/drugpricingguide.pdf)

AMA on ethical guidelines for gifts to physicians from industry (http://www.ama-assn.org/ama/pub/category/5689.html)

PhRMA Code on Interactions with Healthcare Professionals, in pdf (http://www.phrma.org/publications/policy//2002-04-19.391.pdf)

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