Addressing New and Often Overlooked Conflict of Interest and … · Conflict of Interest and...

Addressing New and Often Overlooked Addressing New and Often Overlooked Conflict of Interest and Violation Conflict of Interest and Violation

Reporting RequirementsReporting Requirements

2011 South Atlantic Regional Annual 2011 South Atlantic Regional Annual ConferenceConferenceConferenceConference

Darrell ContrerasDarrell Contreras

Gary Gary KeiltyKeilty

Jennifer StricklandJennifer Strickland

January 28, 2011January 28, 2011

Why Do Conflicts of Interest Matter?Why Do Conflicts of Interest Matter?

Kyphoplasty

� Started with relationships between reps and physicians

� Whistleblower lawsuit against Medtronic for medicare fraud

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medicare fraud

� Initial settlement - $75 million

� One whistleblower was a former regional sales rep for Kyphon

� Expanded to DOJ investigation of hospitals

� To date, 25 hospitals have settled for $101 million

Joint Commission Leadership Standards*Joint Commission Leadership Standards*

Hospital LeadershipHospital Leadership

“The“The governinggoverning body,body, seniorsenior managersmanagers andand leadersleaders ofof thethe

organizedorganized medicalmedical staffstaff addressaddress anyany conflictconflict ofof interestinterest

involvinginvolving leadersleaders thatthat affectaffect oror couldcould effecteffect thethe safetysafety oror qualityquality

ofof care,care, treatment,treatment, andand services”services”

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ofof care,care, treatment,treatment, andand services”services”

�� Leadership work together to define, in writing, what Leadership work together to define, in writing, what constitutes a conflict of interestconstitutes a conflict of interest

�� Leadership work together to develop a policy that Leadership work together to develop a policy that defines how conflict of interest will be addresseddefines how conflict of interest will be addressed

�� Conflicts of interest are disclosed as defined by the Conflicts of interest are disclosed as defined by the hospitalhospital

**A Guide to Joint Commission Leadership Standards, a Governance Institute White Paper, Winter 2009A Guide to Joint Commission Leadership Standards, a Governance Institute White Paper, Winter 2009


Hospital StaffHospital Staff

“Leadership“Leadership addressaddress anyany conflictconflict ofof interestinterest involvinginvolving licensedlicensed

IndependentIndependent practitionerspractitioners and/orand/or staffstaff thatthat affectsaffects oror hashas thethe

PotentialPotential toto affectaffect thethe safetysafety oror qualityquality ofof care,care, treatment,treatment, andand

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services”services”

�� Leaders define, in writing, what constitutes a COILeaders define, in writing, what constitutes a COI

�� Leaders develop a policy that defines how COI will be Leaders develop a policy that defines how COI will be addressedaddressed

�� Existing or potential COI are disclosed as defined by the Existing or potential COI are disclosed as defined by the hospitalhospital



Hospital Staff (cont.)Hospital Staff (cont.)

�� Relationships with other care providers, educational Relationships with other care providers, educational institutions, manufacturers, and institutions, manufacturers, and payorspayors are reviewed to are reviewed to ensure that they are within law and regulation, and to ensure that they are within law and regulation, and to determine in COI existdetermine in COI exist

�� Policies and procedures and information about the Policies and procedures and information about the

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�� Policies and procedures and information about the Policies and procedures and information about the relationship between care, treatment, and services and relationship between care, treatment, and services and financial incentives are available upon request to all financial incentives are available upon request to all patients, and those individuals who work in the hospitalpatients, and those individuals who work in the hospital


Officers and DirectorsOfficers and Directors

IRS (taxIRS (tax--exempt charitable organizations) exempt charitable organizations) –– “a transaction or“a transaction or

arrangementarrangement thatthat mightmight benefitbenefit thethe privateprivate interestinterest ofof anan

officerofficer oror directordirector ofof thethe organizationorganization oror mightmight resultresult inin aa

possiblepossible excessexcess benefitbenefit transaction”transaction” couldcould jeopardizejeopardize itsits taxtax--

exemptexempt statusstatus (http(http:://www//www..irsirs..gov/pub/irsgov/pub/irs--pdf/ipdf/i10231023..pdf)pdf)

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exemptexempt statusstatus (http(http:://www//www..irsirs..gov/pub/irsgov/pub/irs--pdf/ipdf/i10231023..pdf)pdf)

SOXSOX CodeCode ofof EthicsEthics RequirementsRequirements (for(for seniorsenior financialfinancial

officers,officers, [[1515 USCUSC 72647264])]) –– “honest“honest andand ethicalethical conduct,conduct,

includingincluding thethe ethicalethical handlinghandling ofof actualactual oror apparentapparent conflictsconflicts

ofof interestinterest betweenbetween personalpersonal andand professionalprofessional relationships”relationships”

2009 Biennial Survey of Hospital Systems**2009 Biennial Survey of Hospital Systems**

�� 57% of boards have developed Director “disabling 57% of boards have developed Director “disabling guidelines” in connection with conflict of interest issuesguidelines” in connection with conflict of interest issues

�� 65% of boards have developed a specific definition, with 65% of boards have developed a specific definition, with measurable standards, of an “independent Director”measurable standards, of an “independent Director”measurable standards, of an “independent Director”measurable standards, of an “independent Director”

�� 63% of boards have a policy stating deliberate Director COI 63% of boards have a policy stating deliberate Director COI violations constitute grounds for removalviolations constitute grounds for removal

**The 2009 Biennial Survey of Hospitals and Healthcare Systems**The 2009 Biennial Survey of Hospitals and Healthcare Systems66

Research FundingResearch Funding

National Institute of Health*National Institute of Health*

“There“There isis inin effecteffect atat thethe organizationorganization aa writtenwritten andand enforcedenforced

administrativeadministrative processprocess toto identifyidentify andand manage,manage, reduce,reduce, oror

eliminateeliminate conflictingconflicting financialfinancial interestsinterests withwith respectrespect toto researchresearch

projectsprojects forfor whichwhich NIHNIH fundingfunding isis sought”sought”

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projectsprojects forfor whichwhich NIHNIH fundingfunding isis sought”sought”

“When“When requested,requested, thethe institutioninstitution willwill makemake informationinformation

availableavailable toto NIHNIH regardingregarding allall identifiedidentified conflictingconflicting interestsinterests

andand howhow thosethose interestsinterests havehave beenbeen managed,managed, reduced,reduced, oror

EliminatedEliminated toto protectprotect thethe researchresearch bias”bias”

**http://grants.nih.gov/grants/policy/nihgps_2010/nihgps_ch4.htm (4.1.10)http://grants.nih.gov/grants/policy/nihgps_2010/nihgps_ch4.htm (4.1.10)

�� In June 2008, the AAMC Task Force issued a report* In June 2008, the AAMC Task Force issued a report* outlining suggested policies to be developed and outlining suggested policies to be developed and implemented in connection with COI in research and implemented in connection with COI in research and education. Potential conflict of interest areas included:education. Potential conflict of interest areas included:

�� Vendor gifts to physicians and staffVendor gifts to physicians and staff

�� Treatment of pharmaceutical samplesTreatment of pharmaceutical samples

AAMC Task ForceAAMC Task Force

�� Treatment of pharmaceutical samplesTreatment of pharmaceutical samples

�� Site access by pharmaceutical and medical device Site access by pharmaceutical and medical device manufacturer representativesmanufacturer representatives

�� VendorVendor--sponsored scholarships and other educational sponsored scholarships and other educational funds for traineesfunds for trainees

�� Vendor supplied foodVendor supplied food

�� Vendor funding of physician travel costsVendor funding of physician travel costs

* http://services.aamc.org/publications/showfile.cfm?file=version114.pdf* http://services.aamc.org/publications/showfile.cfm?file=version114.pdf8

�� In June 2008, the AAMC Task Force issued a report In June 2008, the AAMC Task Force issued a report outlining suggested policies to be developed and outlining suggested policies to be developed and implemented. Potential conflict of interest areas included implemented. Potential conflict of interest areas included (cont.):(cont.):

�� Ghostwriting of physician professional presentationsGhostwriting of physician professional presentations

�� Purchasing of vendor products where physicians have a Purchasing of vendor products where physicians have a


�� Purchasing of vendor products where physicians have a Purchasing of vendor products where physicians have a financial interestfinancial interest

�� Vendor funding of Continuing Medical Education Vendor funding of Continuing Medical Education (“CME”)(“CME”)

�� Participation of physicians in vendorParticipation of physicians in vendor--sponsored sponsored programsprograms

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�� Task Force Policies include:Task Force Policies include:

�� Prohibiting any acceptance of giftsProhibiting any acceptance of gifts

�� Prohibiting the acceptance of food, except when in Prohibiting the acceptance of food, except when in compliance with Accreditation Council for Continuing compliance with Accreditation Council for Continuing Medical Education (ACCME) guidanceMedical Education (ACCME) guidance


Medical Education (ACCME) guidanceMedical Education (ACCME) guidance

�� Limitations on site access for pharmaceutical and Limitations on site access for pharmaceutical and medical device manufacturer representativesmedical device manufacturer representatives

�� Participation in only accredited CME programsParticipation in only accredited CME programs

�� Discouragement of participation by physicians in Discouragement of participation by physicians in industryindustry--sponsored speakers’ bureaussponsored speakers’ bureaus

�� Disclosure of all financial interests and recusal by Disclosure of all financial interests and recusal by individuals involved in purchasing decisionsindividuals involved in purchasing decisions

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�� June 2010 new guidelines for including conflicts of interest June 2010 new guidelines for including conflicts of interest in clinical care:in clinical care:

�� Evaluate payment methods to ensure that patient care Evaluate payment methods to ensure that patient care isn’t affected adverslyisn’t affected adversly

�� Develop mechanisms to identify financial relationships Develop mechanisms to identify financial relationships

AAMC Task Force Report AAMC Task Force Report –– June 2010*June 2010*

�� Develop mechanisms to identify financial relationships Develop mechanisms to identify financial relationships between physicians and industry groups, and examine between physicians and industry groups, and examine the impact on patient carethe impact on patient care

�� Establish policies for institutional relationships with Establish policies for institutional relationships with industry groupsindustry groups

�� Create uniform methods of disclosing industry Create uniform methods of disclosing industry relationships at all levels to the public, including dollar relationships at all levels to the public, including dollar valuesvalues

*https://services.aamc.org/publications/showfile.cfm?file=version163.pdf&prd_id=303&prv_id=375&pdf_id=163 *https://services.aamc.org/publications/showfile.cfm?file=version163.pdf&prd_id=303&prv_id=375&pdf_id=163 11

�� June 2010 new guidelines for including conflicts of interest June 2010 new guidelines for including conflicts of interest in clinical care (continued):in clinical care (continued):

�� Involve patient representitives in setting policiesInvolve patient representitives in setting policies

�� Inform patients of potential benefits and risks of financial Inform patients of potential benefits and risks of financial relationships with industry, and how those relationships relationships with industry, and how those relationships


relationships with industry, and how those relationships relationships with industry, and how those relationships are managedare managed

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Vendor Compliance ResourcesVendor Compliance Resources

�� Pharmaceutical and medical device manufacturers can get Pharmaceutical and medical device manufacturers can get guidance to develop or enhance their compliance program guidance to develop or enhance their compliance program from the following resources:from the following resources:

�� OIG Compliance Program Guidance for Pharmaceutical OIG Compliance Program Guidance for Pharmaceutical

ManufacturersManufacturers

�� The Pharmaceutical Research and Manufacturers of America Code The Pharmaceutical Research and Manufacturers of America Code

on Interactions with Healthcare Professionals (“PhRMA Code”)on Interactions with Healthcare Professionals (“PhRMA Code”)on Interactions with Healthcare Professionals (“PhRMA Code”)on Interactions with Healthcare Professionals (“PhRMA Code”)

�� The International Federation of Pharmaceutical Manufacturers The International Federation of Pharmaceutical Manufacturers

Association code of Pharmaceutical Marketing Practices (“IFPMA Association code of Pharmaceutical Marketing Practices (“IFPMA

Code”)Code”)

�� Advanced Medical Technology Association Code of Ethics on Advanced Medical Technology Association Code of Ethics on

Interactions with Health Care Professionals (“AdvaMed Code”)Interactions with Health Care Professionals (“AdvaMed Code”)

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�� Add federal reporting requirements to an array of Add federal reporting requirements to an array of state laws that: state laws that:

�� regulate drug and device manufacturers’ marketing regulate drug and device manufacturers’ marketing behaviorbehavior

�� require them to disclose payments or transfers of value require them to disclose payments or transfers of value to applicable healthcare providersto applicable healthcare providers

PPACA “Sunshine Provisions”PPACA “Sunshine Provisions”

to applicable healthcare providersto applicable healthcare providers

�� Tracking to begin in 2012, annual reporting Tracking to begin in 2012, annual reporting

beginning March 31, 2010beginning March 31, 2010

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Case StudyCase Study

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New Drug or

Therapy Introduced

Physician Submits a

Request to Add a Drug to

Hospital

P&T Committee Reviews

Drug is Added toHospital

Advocacy occurs despite evidence or conflicting evidence

New Formulary Requests

Physician campaignsto add Drug A

to the Formulary

Introduced Hospital Formulary

Reviews Request

HospitalFormulary

Drug Rep hostsdinner with Physician to

talk about newdrug

Drug ADrug A

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Is there something else at play here?

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Issues of InfluenceIssues of Influence

�� A one minute encounter between physician A one minute encounter between physician and sales rep typically results in a 16% and sales rep typically results in a 16% increase in prescriptions of the rep’s increase in prescriptions of the rep’s products.products.11products.products.11

�� A four minute encounter prompts a 52% A four minute encounter prompts a 52% jump in ordering and prescribing habits.jump in ordering and prescribing habits.11

�� $12 increase in prescription sales for each $12 increase in prescription sales for each dollar paid to a physician consultant. dollar paid to a physician consultant. 22

1 Walsh, Tom. "Massachusetts Medical Society | Home." Massachusetts Medical Society | Home. 21 Sep. 2009 <http://www.massmed.org>. 2 Hundley, K. (n.d.). “Drugmakers willing to pay to get doctor's approval - St. Petersburg Times”. 30 Sep. 2009< http://www.tampabay.com/news/health/medicine/drugmakers-willing-to-pay-to-get-doctors-approval/1031817# >.

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When is influence illegal? When is influence illegal?

�� Pfizer Pfizer –– Department of Justice SettlementDepartment of Justice Settlement�� $$2.3 billion settlement for improper marketing.2.3 billion settlement for improper marketing.22

�� Largest health care fraud settlementLargest health care fraud settlement�� Included both criminal and civil allegationsIncluded both criminal and civil allegations�� Criminal allegation: Pfizer promoted the sale of Criminal allegation: Pfizer promoted the sale of BextraBextra for several uses for several uses

and dosages that the FDA specifically declined to approve due to safety and dosages that the FDA specifically declined to approve due to safety concerns concerns concerns concerns

�� Civil allegation: Pfizer paid kickbacks to healthCivil allegation: Pfizer paid kickbacks to health--care providers to induce care providers to induce them to prescribe their drugsthem to prescribe their drugs

�� Some of the Settlement Requirements:Some of the Settlement Requirements:�� Post on its website a list of physicians and related entities who received, Post on its website a list of physicians and related entities who received,

or receive, payments from Pfizer until 2014;or receive, payments from Pfizer until 2014;�� Disclose on Pfizer web site information about grants it awards, including Disclose on Pfizer web site information about grants it awards, including

continued medical education grants, for at least two years following each continued medical education grants, for at least two years following each grant and maintain the information for five years; andgrant and maintain the information for five years; and

�� Contractually require CME providers to disclose Pfizer's financial support Contractually require CME providers to disclose Pfizer's financial support of their programs and any financial relationship with faculty and speakers.of their programs and any financial relationship with faculty and speakers.

ROCKOFF, JONATHAN D., and BRENT KENDALL. "Pfizer to Plead Guilty To Improper Marketing - WSJ.com." Business News & Financial News - The Wall Street Journal - WSJ.com. 21 Sep. 2009 <http://online.wsj.com/article/SB125190160702979723.html>.

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““You can’t give somebody a You can’t give somebody a $10,000 gift for 5 hours of work $10,000 gift for 5 hours of work

when really what you’re asking to when really what you’re asking to

Minnesota State Senator Minnesota State Senator John Marty: John Marty:

when really what you’re asking to when really what you’re asking to do is use your productdo is use your product.”.”

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How to Address InfluenceHow to Address Influence

�� 2008 2008 PhRMAPhRMA codecode

“In interacting with the medical community, we “In interacting with the medical community, we are committed to following the highest ethical are committed to following the highest ethical standards as well as all legal requirements. We standards as well as all legal requirements. We standards as well as all legal requirements. We standards as well as all legal requirements. We are also concerned that our interactions with are also concerned that our interactions with healthcare professionals not be perceived as healthcare professionals not be perceived as inappropriate by patients or the public at large.”inappropriate by patients or the public at large.”

�� Requires disclosureRequires disclosure

�� Limit on giftsLimit on gifts

�� Attempts to make financial relationships more credibleAttempts to make financial relationships more credible

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2008 2008 PhRMAPhRMA Code Code -- P&T Committee P&T Committee ProvisionsProvisions

�� Rule 8: “To avoid even the appearance of Rule 8: “To avoid even the appearance of impropriety, companies should require any impropriety, companies should require any healthcare professional who is a member of a healthcare professional who is a member of a committee to disclose the nature of his/her committee to disclose the nature of his/her relationship.”relationship.”relationship.”relationship.”

��Disclosure should extend for two years beyond Disclosure should extend for two years beyond termination of speaker or consultant agreementtermination of speaker or consultant agreement

��Healthcare Professionals who serve as Healthcare Professionals who serve as consultants should be required to follow the consultants should be required to follow the procedures set forth to recuse themselves from procedures set forth to recuse themselves from decisions related to medicine for which they decisions related to medicine for which they speak.speak.

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�� VoluntaryVoluntary��Suggestive language instead of mandatory Suggestive language instead of mandatory

language:language:�� Rule 8: “To avoid even the appearance of Rule 8: “To avoid even the appearance of

impropriety, companies should require any healthcare impropriety, companies should require any healthcare professional who is a member of a committee to professional who is a member of a committee to

Limitation on CodesLimitation on Codes

professional who is a member of a committee to professional who is a member of a committee to disclose the nature of his/her relationship.”disclose the nature of his/her relationship.”��Disclosure should extend for two years beyond Disclosure should extend for two years beyond

termination of speaker or consultant agreementtermination of speaker or consultant agreement��Healthcare Professionals who serve as consultants Healthcare Professionals who serve as consultants

should be required to follow the procedures set forth to should be required to follow the procedures set forth to recuse themselves from decisions related to medicine recuse themselves from decisions related to medicine for which they speak.for which they speak.

�� People are cleverPeople are clever�� What happens if the Code is violated?What happens if the Code is violated?

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�� State LegislationState Legislation��Massachusetts LawMassachusetts Law –– The Massachusetts The Massachusetts

StateState Senate has voted to ban all gifts to physicians Senate has voted to ban all gifts to physicians from pharmaceutical companies. from pharmaceutical companies. from pharmaceutical companies. from pharmaceutical companies.

��Vermont LawVermont Law –– “The Vermont Legislature has “The Vermont Legislature has enacted legislation (S.48) that prohibits drug and enacted legislation (S.48) that prohibits drug and medical device manufacturers from offering gifts to medical device manufacturers from offering gifts to health care providers and imposes broad financial health care providers and imposes broad financial relationship reporting requirements.”relationship reporting requirements.”

��Minnesota LawMinnesota Law --prohibits bestowing "any gift of prohibits bestowing "any gift of value" to a practitioner.value" to a practitioner. Minnesota exempts $50 or Minnesota exempts $50 or less.less.

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Patient Protection and Affordable Care Act Patient Protection and Affordable Care Act (a.k.a. Health Care Reform Act)(a.k.a. Health Care Reform Act)

�� Payment to Physicians Sunshine Act:Payment to Physicians Sunshine Act:

–– Transparency Reports and Reporting of Physicians Transparency Reports and Reporting of Physicians –– Transparency Reports and Reporting of Physicians Transparency Reports and Reporting of Physicians Ownership Or Investment InterestsOwnership Or Investment Interests

–– Requires disclosure of ALL payments to physiciansRequires disclosure of ALL payments to physicians

–– Applies to Pharmaceutical and Device manufacturersApplies to Pharmaceutical and Device manufacturers

–– Data will be posted for the publicData will be posted for the public

–– Reporting begins March 31, 2013, and every 90 days Reporting begins March 31, 2013, and every 90 days thereafterthereafter

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Corporate Integrity Agreements (CIA) with Corporate Integrity Agreements (CIA) with Pharmaceutical Manufacturers:Pharmaceutical Manufacturers:

�� Typical Cause Typical Cause –– OffOff--label promotionlabel promotion

Corporate Integrity Agreements

�� Typical Cause Typical Cause –– OffOff--label promotionlabel promotion

�� Every recent government settlement has Every recent government settlement has included a CIAincluded a CIA

�� Requires Requires public posting of payments to public posting of payments to physicians on company’s websitephysicians on company’s website

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So What?So What?

�� Reporting is comingReporting is coming

�� Some states already require disclosureSome states already require disclosure

�� Pharmaceutical Companies under a CIA Pharmaceutical Companies under a CIA must disclose NOWmust disclose NOWmust disclose NOWmust disclose NOW

�� The data is availableThe data is available

Now What?Now What?

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Proposed suggestionProposed suggestion

�� Leverage the P&T committeeLeverage the P&T committee

�� 22--Part Approach:Part Approach:1.1.Require disclosure of influence Require disclosure of influence 1.1.Require disclosure of influence Require disclosure of influence

activitiesactivities

2.2.Require disclosures from Require disclosures from Pharmaceutical Companies when Pharmaceutical Companies when reviewing new formulary requestsreviewing new formulary requests

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Required DisclosuresRequired Disclosures

�� New Formulary Request requires completion of New Formulary Request requires completion of a druga drug--specific disclosure formspecific disclosure form

��Disclosure lists all types of possible paid activityDisclosure lists all types of possible paid activity

��Requires initials if no activityRequires initials if no activity��Requires initials if no activityRequires initials if no activity

��Attestation explicitly states hospital’s reliance on Attestation explicitly states hospital’s reliance on disclosuredisclosure

�� Annual disclosure by all P&T Committee Annual disclosure by all P&T Committee membersmembers

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Will It Work?Will It Work?

�� P&T Committee has leverage to approve P&T Committee has leverage to approve or disapprove formulary requestsor disapprove formulary requests��Approvals are based on many factors, Approvals are based on many factors,

including whether a request was biased or including whether a request was biased or including whether a request was biased or including whether a request was biased or influencedinfluenced

�� Pharmaceutical Companies maintain logs Pharmaceutical Companies maintain logs of their paid consultantsof their paid consultants

�� Many are required to publish this listMany are required to publish this list

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PhysicianSubmits

Request to New Drug

Physician Prepares

New Formulary Request

P&T Committee

Chair reviews

disclosure and

P&T Committee

New Drug is Added

New Formulary Requests - Proposed

Request to Add drug to

HospitalFormulary

New Drug or

Therapy Introduced

Physician Completes

New Product Business

ComplianceDisclosure

Form

andRequests

Information fromDrug

Company

CommitteeReviewsRequest

Addedto the

Formulary

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�� PurposePurpose

�� BackgroundBackground

�� Institution PolicyInstitution Policy

�� ApplicabilityApplicability

�� DefinitionsDefinitions

COI Policy COI Policy -- Key ComponentsKey Components

�� DefinitionsDefinitions

�� ProceduresProcedures

��Duty to discloseDuty to disclose

�� Investigation/fact finding approachInvestigation/fact finding approach

��Determination approachDetermination approach

��Prohibited activities (if applicable)Prohibited activities (if applicable)

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�� Procedures (cont.)Procedures (cont.)

��Consequences of violationsConsequences of violations

��Annual statementsAnnual statements

��Applicable documentationApplicable documentation

��Periodic reviews/monitoringPeriodic reviews/monitoring

COI Policy COI Policy -- Key ComponentsKey Components

��Periodic reviews/monitoringPeriodic reviews/monitoring

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Questions / DiscussionQuestions / Discussion

Gary Keilty

Managing Director

RESOLVE Advisory Partners, LLC

[email protected]

813.309.1139

Darrell Contreras

Partner

JD HealthCare Partners

[email protected]

863.797.9917

3535

Jennifer Strickland

Partner

JD HealthCare Partners

[email protected]

863.944.6918

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