the new urgency for compliance: recent legal developments and their implications for conferences and...

The New Urgency for Compliance: Recent Legal Developments and their Implications for Conferences and Exhibitions

AIPC, July 1, 2013, Cape TownTanya Vogt, SAMED

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Agenda

I. About the MedTech industry

II. Broader perspective & environment

III. What does it mean for congress centres / organisers?

IV. Conclusion

I. About the MedTech industry

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MedTech: a diverse sector

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II. Broader perspective and environment

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Global issues of the MedTech industry

Regulatory• Clinical• Environmental• Market access

Financial• Pricing• Reimbursement• Procurement• HTA

Compliance• Codes of Ethics• Transparency• Third-parties

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Ethically responsible companies

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HCPs & companies are under the limelight

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Increasing enforcement

Enforcement of OECD Anti-Bribery Convention*:

199 individuals and 91 entities have been sanctioned under criminal proceedings for

foreign bribery in 13 countries (between 1999** and the end of 2010).

At least 54 of the sanctioned individuals were sentenced to prison for foreign bribery.

A record amount of EUR 1.24 billion was imposed in combined fines on a single

company for foreign bribery.

Approximately 260 investigations are ongoing in 15 countries. Criminal charges have

been laid against over 120 individuals and 20 entities in 5 countries.

Active enforcement in particular in Denmark, Germany, Italy, Norway, Switzerland, United

Kingdom, United States**

* Data collected as of March 2011; http://www.oecd.org/document/3/0,3746,en_2649_34859_45452483_1_1_1_1,00.html

** When Convention entered into force

***TI Progress Report on Enforcement of the OECD Convention: http://transparency.org/news_room/latest_news/press_releases/2011/2011_05_24_oecd_progress_report

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Public disclosure of individual relationships

Different disclosure requirements:

Recent trend in Europe (legal & self-regulatory): e.g. France, Czech

Republic, Slovakia etc.

Types: publication of payments to HCPs by companies; publication

of contracts between the industry and HCPs; publication of details of

donations made to institutions, etc.

Potential challenges:

How to deal with administrative burden (e.g. very low threshold)?

How to build up an internal tracking/reporting systems?

How to explain to HCPs that their finances will be public?

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Enforcement – FCPA HC industry cases

2013 […] Koninklijke Philips Electronics - SEC charged the Netherlands-based company with FCPA violations related to improper payments made by employees

at its Polish subsidiary to healthcare officials in Poland. Philips agreed to pay more than $4.5 million to settle the charges.

2012 Eli Lilly and Company - SEC charged the Indianapolis-based company for improper payments its subsidiaries made to foreign government officials to win

business in Russia, Brazil, China, and Poland. Lilly agreed to pay more than $29 million to settle the charges. […] Tyco International - SEC charged the Swiss-based manufacturer with violating the FCPA when subsidiaries arranged illicit payments to foreign officials in

more than a dozen countries.  Tyco agreed to pay$ 26 million to settle the SEC's charges and resolve a criminal matter with the Justice Department. […] Pfizer - SEC charged the company for illegal payments made by its subsidiaries to foreign officials in Bulgaria, China, Croatia, Czech Republic, Italy,

Kazakhstan, Russia, and Serbia to obtain regulatory approvals, sales, and increased prescriptions for its products. […] agreed to pay a combined $45 million in settlements.

Orthofix International - SEC charged the Texas-based medical device company with violating the FCPA when a subsidiary paid routine bribes referred to as “chocolates” to Mexican officials in order to obtain lucrative sales contracts with government hospitals.

[…] Biomet - SEC charged the Warsaw, Ind.-based company with violating the FCPA when its subsidiaries and agents bribed public doctors in Argentina,

Brazil, and China for nearly a decade to win business. […] Smith & Nephew - SEC charged the UK-based company with violating the FCPA when its U.S. and German subsidiaries bribed public doctors in Greece

for more than a decade to win business. The company and its U.S. subsidiary agreed to pay more than $22 million to settle civil and criminal cases.

2011 […] x2 Siemens executives - SEC charged seven former Siemens executives for their involvement in the company's decade-long bribery scheme to retain a $1

billion government contract to produce national identity cards for Argentine citizens. […] x5 Johnson & Johnson – SEC charged the New Brunswick, N.J.-based company for bribing public doctors in several European countries to win contracts

for their products and paying kickbacks to Iraq to illegally obtain business. J&J agreed to pay $70 million to settle cases brought by the SEC and criminal authorities.

[…] x 6

In http://www.sec.gov/spotlight/fcpa/fcpa-cases.shtml

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Specific challenges

General framework – Cross-sectoral:

Þ Anti-corruption regulation (e.g. FCPA, OECD, UK bribery Act, …)

Healthcare companies (MedTech, pharma)

Þ Public money – Governmentally controlled social security

Þ Complexity of the stakeholders interactions

Þ Physicians are to the industry :

o Customers (in their prescribing role) and users

o Service providers (as Speakers, Experts, Trainer, Researchers...)

o Decision-makers (as Pricing Committee Members, Expert etc.)

Þ Who else is a customer ?

o Wholesalers, Distributors, Pharmacists, Retail Chains, Hospitals, Clinics ....

o The Sick Funds, the Managed Care Organizations

o The Ministry of health (through Public Hospitals etc..)

o The patient as co-payer and as the one who receives the treatment

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What are companies willing to risk?

Do the maths!Þ Development of healthcare compliance programs in the companies

Þ One big risk for healthcare companies is the relationship

with healthcare professionals (R&D and training/education)

III. What does it mean for congress centres / organisers?

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Industry’s support to medical education

Educational grants to a hospital or scientific society

Grants to congress organisers

Individual support of physicians to congresses by companies

Needed or/and

Suspicious?

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Support of HCPs to congresses

Recent developments popping up all around the world, but slightly different

from country to country:

More and more countries prohibit or limit company support to individual

HCPs to congresses (e.g. USA, Australia, Korea, Norway, Netherlands,

Sweden)

Transparency – reporting of payments and transfers of value from the

companies to HCPs in public databases (e.g. France, USA, Slovakia)

Industry codes of ethics (e.g. Eucomed, EFPIA, IFPMA, MCA) – Review

of the “appropriateness” & “image projected to the public” of congresses

− Eucomed Conference Vetting System (CVS) – binding decisions for members

− EFPIA’s code of ethics

IV. Conclusion

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Potential consequences

Fewer participants

HCPs to pay from their own pocket

Selection of most “valuable” congresses [from an educational

perspective for HCPs]

Less industry funding – exceptionally no industry funding if “non-compliant”

Þ More competition between congresses and congress centers

Þ Value of staying connected and monitor developments

Caveat: Global development & specificity of the healthcare sector.

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Eucomed Conference Vetting System

The Eucomed Conference Vetting System is reviewing compliance of third

party educational conferences with the ethical rules established by the

Eucomed Code

Managed by the independent Compliance Officer

Binding decisions on the Eucomed members

No sponsorship of HCPs at inappropriate conferences

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The Assessment Criteria

Conference programme:

Detailed schedule

Available in advance

Relevant to HCPs

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The Assessment Criteria

Geographic location & Conference venue

Location

Seasonal resorts, golf resorts, cruise

ships and spas not allowed

Time of the year

Easy to access/central location

Local HCP exception

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The Assessment Criteria

Hospitality and accommodation

Not excessive or could be

considered « entertainment »

Reasonableness of hospitality

Separate additional charge

included for spouses, partners,

family & guests

Duration

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The Assessment Criteria

Entertainment

Not allowed, except for modest and incidental gatherings such as an

opening cocktail and /or conference dinner which must be open to all

HCP delegates

Does not dominate or interfere with scientific aspect of the programme.

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The Assessment Criteria

Communication / registration support

Inappropriate design of the

advertising support

Unauthorized activities advertised

Combined registration fee which

includes spouses, guests,

partners, family

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What conferences?

European conferences

Participants from more than one European country

Europe:

EEA countries

Switzerland

Associate members’ countries

International conferences taking place in Europe.

N.B: The Compliance Panel may, exceptionally and at its discretion, extend the scope

to national and/or international conferences.

EU 27 + Iceland, Liechtenstein & Norway

Russia, Turkey and the Middle East

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What is the process?

Submission Assessment Ruling

Completed online form Submitted at the latest 90

days prior to the event Early submissions are

highly encouraged

Handled on first-come, first-served basis

Assessed within 30 days of submission

Organiser stakeholders to be notified at the latest 10 days prior to the publication of a negative decision

Published in the event database

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Conclusion

Thank you. Questions?

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