When a “Consulting” Contract is NOT a “Consulting” Contract
It all boils down to the definition of a “necessary interaction” with a physician.
According to the updated Code, a “necessary interaction” is one where “A legitimate need arises when a Company requires the services of a Health Care Professional to achieve a specific objective, such as the need to train Health Care Professionals on the technical components of safely and effectively using a product; the need for clinical expertise in conducting product research and development; or the need for a physician’s expert judgment on clinical issues associated with a product.”
“Designing or creating an arrangement to generate business or to reward referrals from the contracted Health Care Professional (or anyone affiliated with the Health Care Professional) are not legitimate needs for a consulting arrangement.”
How Much to Pay Physician Consultants?
The answer is: “fair market value.”
The Code explains, somewhat confusingly, that “fair market value” is determined when companies pay for the “necessary” services.
According to the Code, there are different ways to calculate fair market value. Or, you can hire a consultant.
“For example, many third-party vendors or other experts can assist a Company in developing an approach to assessing fair market value compensation. In all instances, a Company should use a method that incorporates objective criteria—for example, a Health Care Professional’s specialty, years and type of experience, geographic location, practice setting, the type of services performed, etc. A Company is encouraged to document its method(s) for evaluating whether compensation reflects the fair market value of the services provided.”
Also, be sure to hire physicians in high standing. Key Opinion Leaders, for example.
“Companies should pay special attention to understand possible conflict of interest of the physician. For example, in addition to his/her industry interactions, a physician could also hold a leadership role in a medical society, serve as a conference planning chair, or act as a medical journal editor. “A physician’s professional interest in advancing objective, clinical information may compete with his or her industry relationship. Companies should be aware that Health Care Professionals may have these conflicts. Companies should also be mindful of steps that may need to be taken to address these conflicts, including, for example, recusal from decisions that implicate the conflict.”
Grants, Sponsorships and Donations
In looking at third-party programs, the principles for providing grants, sponsorships, and donations remain largely unchanged.
AdvaMed consolidated the principles on those funding arrangements into one section. The updated Code also includes a checklist for reviewing educational grant requests and expands and clarifies requirements for providing independent research grants and charitable donations.
There are also new principles that address Satellite Symposia. A Satellite Symposium is defined as a “company-organized and funded program that is appended to a Third-Party Program agenda but that the Third-Party Organizer does not control.
“These programs often take place during meal breaks at the Third-Party Program and may address education and training topics that coincide with the Third-Party Program’s focus. A Satellite Symposium does not include a Company-organized meeting, training, or educational session (such as an advisory board, consultant meeting, or product education session) that (a) may be held in close physical and temporal proximity to a Third-Party Program and (b) is not appended to or included in the Third-Party Program’s official agenda.”
