Six Lessons Learned from Leading AdvaMed’s Recent Code of Ethics Revisions ?(MedTech Monday)

The Advanced Medical Technology Association (AdvaMed) – the world’s largest trade association of medical device and diagnostics makers – announced in early January that it revised the longstanding AdvaMed Code of Ethics in the United States.  Since the early 1990s, the AdvaMed Code – then the HIMA Code – has provided medtech makers with meaningful standards and a strong foundation in compliance.  In 2018, AdvaMed launched a project to reopen, revisit, and revise this longstanding and well-used Code.  As AdvaMed's Deputy General Counsel, I had the opportunity to lead the industry’s Code revision.  

Helping shape the next phase for medtech companies’ compliance standards and business operations – while keeping the industry’s focus on high-quality patient care and cutting edge innovation – has been a career highlight. Leading the effort, which took well over a calendar year, offers several lessons on what the Code means, why the Code is important, and how the Code should be read.  

Lesson 1: A well-represented constituency goes a long way

The medtech industry is one of great diversity.  Medical device and diagnostics makers cover a wide range of products, from cardiology to pain management to orthopedics; products that monitor and track patient recovery; capital equipment that diagnoses patients, delivers medical care, or performs robotic surgery; wound care products; surgical supplies; diagnostic testing equipment; and much much more.  

The range, scope, location, and clinical requirements of patient care can vary significantly depending upon the product used.  For example, a pacemaker may require a patient to undergo an outpatient procedure and may require the patient to interact with his or her PCP, cardiologist, rhythm management specialist, and cath lab nurse.  A hip implant, on the other hand, may require inpatient treatment, overnight hospital stays, and primary interaction with the patient’s orthopedic surgeon.   Companies’ legal and compliance needs can vary depending upon the type of product, the setting of care, and the degree of interaction with HCPs.

Company sizes can also vary significantly.  The medtech industry has major multinational corporations, but most companies are small- and mid-sized companies, many with fewer than 100 employees.  Companies’ legal and compliance risk tolerance and risk profiles can vary greatly depending upon size and the availability of resources. 

An effective Code requires that we account for these varied interests and risk profiles, especially in building consensus on the Code changes.  Accordingly, it was important that an active working group of lawyers, compliance officers, and other company representatives could articulate and share the interests of our varied constituency and reflect the diverse needs of medtech companies.  By pulling together a working group that represented all sectors and companies of all sizes, we forged a solid, middle ground path in our revisions that fully accounts for medtech’s varied needs.  And by forging a solid, middle ground path, we helped ensure broad stakeholder support for our Code revisions, clarifications, and additions.

Lesson 2:  Consensus is Built on Process, Not Policy

In December 2018, the AdvaMed Board of Directors unanimously voted to approve the revised Code of Ethics.  In driving towards this decision and in securing the unanimous support of several dozen medtech CEOs, we made sure a robust and thoughtful governance process was in place.  Indeed, in many respects, the process became equally important to the substance of the Code revisions themselves:

• While individual company employees are the primary users of the Code, physicians, nurses, hospitals, and other providers certainly feel the impact.  Further, sales organizations also have a critical stake in the Code as well, given that the Code governs much of their daily interactions with customers.  Accordingly, we started the process in early 2018 by holding stakeholder feedback meetingswith roughly a dozen groups representing physicians, hospitals, medical schools, distributors, former prosecutors, and sales organizations.  During these sessions, we collected feedback on their own interactions with the Code, where it has been a challenge, and where it has been a useful tool.  Starting the process with this effort allowed us to better understand – and shape solutions in response to – some of the challenges and obstacles that the Code has posed over the last 10 years.
• Outcomes matter, but participants need to feel as if their individual concerns are heard and discussed. Despite having a highly active working group of approximately 60 lawyers & compliance officers, every question, issue, concern, or observation was discussed, analyzed, and subject to a decision. Our goal was for everyone to be satisfied that they had an opportunity to ask their questionsand to have their concerns debated and discussed. The more solid the process, the less assailable the final product.  
• At the start of each working group meeting, we reminded company representatives to engage in internal feedback discussions with their business partners and with their executive leadership.  The idea was to elicit their questions and concerns early in the process and to make sure any issues or concerns from management were handled and addressed early on.  As a result, we had few surprise issues as we approached our Board vote on the revised Code in December 2018.  This also allowed our working group representatives to start socializing the concept of the Code revisions with their business partners.  Early planning in this way meant better communication and fewer surprises.
• As we moved the Code through our governance process – including escalating layers of review and approval – we kept the process transparent, and we laid the groundwork early on with individual calls to CEOs, GCs, CCOs, and others to ask for their feedback and input.  Top executives at our companies provided insight, direction, and guidancethat kept the Code (and our efforts to build consensus around Code changes) pointed in the right direction.  This also highlighted one of the great aspects of the medtech industry:  the great value that our senior-most executives place on compliance, ethics, and doing business the right way.  

Lesson 3: Finding a Compass and an Anchor in MedTech Values

One of the key additions to the Code is the inclusion of six Cornerstone Values in the Introduction.  These values, which find their basis in the longstanding AdvaMed Code, in other codes around the world, and in the KL Principles, serve as a compass and an anchor for the industry. These are:  

• Innovation – Advance the development and availability of safe and effective Medical Technology that Health Care Professionals use to improve & save lives
• Education – Deliver high-quality training and education to help ensure that Health Care Professionals safely and effectively use Medical Technology
• Integrity – Conduct business with integrity at all times and avoid real or perceived conflicts of interest with Health Care Professionals
• Respect – Respect the independent clinical judgment of Health Care Professionals to decide the best manner and method for treating patients
• Responsibliity – Promote socially and ethically responsible business practices that protect patients, their rights, and their safety
• Transparency – Conduct interactions with Health Care pRofessionals fairly, openly, and transparently

These values are interpretive principles that companies can use when faced with an arrangement or interaction not squarely addressed under the Code.  These values answer the question, “For this new type of arrangement or relationship, what principles should guide the application of the Code and how we regulate our own practices?”  

As a compass, these values are the North Star for medtech companies, serving as a beacon and a measure for how medtech companies should operate and behave in the marketplace. As an anchor, these values help tether companies to common principles and goals.  

Lesson 4: An Industry Code Serves Many Purposes

The inclusion of the six medtech Cornerstone Values highlights another important dynamic of the revised AdvaMed Code.  While captioned a “Code of Ethics,” the Code is really one part mission statement, one part ethical code, one part code of conduct, and one part defensive document.  

• As a mission statement, the AdvaMed Code’s provisions, restrictions, and values all speak to protecting patients, their rights, and their safety; providing patients with high-quality care; supporting Health Care Professionalsin their delivery of high-quality, safe, effective care; and shielding collaborative and important relationshipsbetween industry and HCPs that result in cutting edge products that save and transform lives.
• As a code of ethics, the AdvaMed Code offers high level guidance and principles for companies.  For example, the Code may not state that a company must follow a specific process when engaging a physician to serve as a consultant, but the Code does require companies to have a process in place that addresses key topics (legitimate need, FMV payment, etc.).  The Code provides the why and the what, the company fills in the nuance and details around who, where, when, and how.  
• As a code of conduct, on the other hand, some aspects of the AdvaMed Code intentionally provide more detail and process points for companies to follow.  For example, the AdvaMed Code provides detailed and specific information about organizing a satellite symposium at a third-party conference (Section IV).  The Code also includes details about how to implement a jointly conducted education and marketing program (Section V).  
• Finally, as an umbrella for the entire industry, the AdvaMed Code highlights those practices and behaviors that we believe are appropriate (under the circumstances and subject to the restrictions described in the Code) and should be protected.  One recent example is the provision of meals and refreshments to physicians and other HCPs.  In addition to meals consistently being the most frequently reported line item under the Open Payments Program, meals were the subject of a recent AKS settlement in the medtech space.  While it is critical to have strong guardrails and parameters for meals in place (spending limits, appropriate settings, appropriate topics, etc.), discussing business over meals is a longstanding and appropriate practice, and the Code addresses meals from this perspective.

Lesson 5: The Substance May Remain the Same, but the Context May Change

For the most part, the revised AdvaMed Code does not contain sweeping new proscriptions or wholesale changes.  There are few surprises, and many of the edits and additions were intended to clarify existing best practices.  

The context of these best practices, however, may have changed and may highlight the importance of the Code’s provisions to an even greater degree.  One example is the Code’s extended provisions on Educational Grants & Commercial Sponsorship (Section IV).  While the Code’s language on funding Educational Grants does not change dramatically, but new language in the Code shows the change to context.  For example, the revised Code highlights the practices of commercial sponsorship and satellite symposia, common and longstanding practices associated with company support for a tradeshow, third-party conference, or other educational program.  Companies often have different review processes and criteria for different types of support, given the varied legal and compliance risks that each type of support poses.  Companies have also been bombarded with requests from conference organizers and CME providers for both educational grants and commercial support, often without regard to industry’s differing needs and interests associated with each.  Accordingly, while the principles of the Code have remained largely in tact, their context has changed; and it makes it all the more important for companies to have good guidance and guardrails.

Lesson 6: Planning, Planning, Planning

Because we launched the AdvaMed Code revision on our own timeline and not as a result of some precipitating event, we could establish our own timeline and planning process that kept us organized and on track:

• First, our working group met subject to a schedule of working group calls and meetings that was laid out months in advance.  We stuck to the schedule, and we made sure that each issue area received fair and equal airtime during these meetings.  
• Second, we were thoughtful about the implementation period for the Code. While we had batted around different effective dates, from Jan 1, 2019 to July 1, 2019 to the date we settled on – Jan. 1, 2020 – the key question was planning.  Do companies have sufficient time to plan for these changes?  To implement these changes?  To adjust policies, procedures, training, monitoring, and auditing plans, etc. to account for these changes?  
• Finally, we wanted to make sure all questions – even the smallest or most detailed – were answered.  Indeed, we made the decision to use 2019 to develop additional FAQs, resources, tools, and the like that would further enhance the Code.  Moving this work to 2019 allowed us to focus on the substance of the Code in 2018 (and to get it right), while giving us plenty of time to be thoughtful and comprehensive in the development of our tools and resources.

Along with this year’s anticipated changes to the AKS safe harbors to account for value-based arrangements and anticipated changes to the Sunshine regulations to account for the recent expansion, the revised AdvaMed Code marks one of the most significant compliance updates in 2019 for medtech companies.  While the substance of the Code remains close to the current version, the revisions reflect a significant effort on the industry’s behalf and represent over a year’s worth learning and lessons.

Do you have questions about the AdvaMed Code revisions or companies needs to update and enhance their internal policies?  Please contact me here at LinkedIn, and I will be happy to set up some time to discuss.