Thursday, February 28, 2008

An Unhappy Face Book for Pharma

The government’s got a new type of social networking site under consideration for pharma. It is likely to create a list of key names and contacts which will generate a lot of sad faces.

Pharma will not want to list its friends and the friends would rather have some relationships be not quite so public.

Pharma companies may not have been paying much attention to developments in the medical device field. They should pay a little more attention to the new rules for disclosing consulting relationships between medical device companies and their consultants, including their agreements with doctors for speaking arrangements and market advice.

In September of last year, four medical device implant manufacturers (Zimmer, DePuy Orthopaedics, Biomet, Smith & Nephew) signed agreements with the US Attorney’s Office for New Jersey to address allegations that the firms had used “consulting agreements, lavish trips and other perks” as marketing and sales tools.

The companies signed the “Deferred Prosecution Agreements” and made payments totaling $311 million to avoid further court proceedings on the charges.

To use the power of publicity as a restraining tool, the prosecutors called for the companies to create lists of all of their outside paid consultants and post it prominently on their websites. (See here for a link to the 14 pages of Zimmer's consultant listings.)

This is a stripped down type of social network: Zimmer’s key contacts, where they are located (city and state) and how much the device company paid them in the last year.

One listing for Zimmer, for example, is Robert Booth, the chief of orthopaedic surgery at Pennsylvania Hospital and one of the surgeons who worked with Zimmer on the NexGen Legacy Knee and a knee designed specifically for women. Booth is listed as receiving over $1.8 million from Zimmer in the ten months of 2007 through October.

The government now wants to apply its new web spotlight approach on pharma companies and their relationships with the medical community.

Greg Demske, assistant inspector for legal affairs at the Health and Human Services Office of the Inspector General, told a Senate Special Committee on Aging hearing on February 27 that the OIG “is considering requiring similar disclosure requirements in future CIAs [corporate integrity agreements] with device manufacturers and pharmaceutical companies.” (See here for Demske's testimony.)

That’s a nice way for OIG to warn pharma companies that the next negotiations with OIG over a fraudulent marketing practices agreement or over alleged inappropriate gifts or inducements to doctors will lead to the requirement that the drug company publicize all of its contacts and grants/payments to the medical profession.

Zimmer is taking the corporate responsibility seriously after its run-in in the New Jersey settlements. The company testified to the Senate Aging Committee that it would take further steps to distance itself from the recipients of its largesse.

"With respect to Zimmer’s future funding of medical fellowships, residencies, and general educational programs,” for example, the company testified that “we plan to make cash donations to one or more appropriate, independent third-party institutions. These third-party institutions will choose the programs and applicants that will receive Zimmer funding globally. Zimmer will have no control or influence over the selection of the ultimate recipients of these funds.”

The company also embraced the “Physician Payments Sunshine Act” introduced by Senate Special Committee on Aging Chairman Herb Kohl (D-Wisc.) and Iowa Republican Charles Grassley. Zimmer says that it is looking forward to the sunlight and public disclosure from its agreements and the Congressional action.

Some lucky pharma company is likely to be next in welcoming the chance to create its facebook of contacts.

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