AdvaMed and Eucomed Join Forces On Ethical Relationships With Distributors

Abstract

The Advanced Medical Technology Association (AdvaMed) and the European Medical Technology Industry Association (Eucomed) have approved “Joint Guidance for Medical Device and Diagnostics Companies on Ethical Third Party Sales and Marketing Intermediary (SMI) Relationships.”

Not before time we say. While both Advamed and Eucomed already have their own guidance documents, this initiative must carry more weight.

Background

For many years the relationship between a manufacturer and its overseas distributor has been, like a bad golf shot that somehow gets the ball to the right place, one of those things that works, but is less than ideal and may be ugly.

Now Advamed and Eucomed have collaborated on new joint guidance which is intended to protect companies from the vagaries of distributor behaviour in a far flung land. According to an Advamed press release; “The new guidance encourages companies to adopt a compliance program that integrates individual risk analyses and local laws to ensure ethical interactions between medical device companies and third-party entities hired for assistance in marketing, sales and/or distribution of their products or services.”

SMI arrangements can be complex and implicate a variety of U.S., overseas and local laws. The guidance recommends elements of a successful SMI compliance program and serves as an important resource for any medical technology company engaging in SMI interactions overseas.

Advamed comments

“Many medical device and diagnostic companies work with third parties to assist with marketing, sales and distribution of advanced medical technology overseas,” said Christopher White, AdvaMed executive vice president and general counsel. “We believe clear, established compliance programs will safeguard the integrity of medical decision making and promote further public confidence in our industry. This guidance complements the AdvaMed Code of Ethics, as well as Eucomed’s, and is the latest in our ongoing commitment to provide ethical guidance on appropriate industry interactions.”

So what form does the guidance take? 

The guidance identifies the following elements of an effective SMI compliance program:

  • Comprehensive anti-bribery policy;
  • Established process for evaluating risk profiles of third-party SMIs;
  • Risk-based pre-engagement and renewal due diligence program;
  • Contract terms providing adequate controls and implementation of the policy;
  • Training and education for third-party SMIs and the company employees that manage these relationships;
  • Routine, risk-based assessment of third-party SMI relationships; and
  • Appropriate corrective measures when needed.

A cursory look at the document, which can be found here, reinforces the point that  “joint, harmonized, ethical guidance with respect to Company interactions with Third Party SMIs can be helpful to ensure integrity in medical decision making”.

The document is of course only as good as its implementation by companies willing to stay on side, potentially at the expense of revenue, because there’s no doubt that, by complying with the guidance, companies (or more likely their distributors, or the parties in collaboration) will sometimes have to turn down “opportunities” in order to remain in compliance.

That’s just how it is though… US companies make SEC filings of their financials every year and in these there exist statements implying that the company exerted enough influence over its distributors to be sure that it, as a collective entity, behaved in an ethical manner in its business dealings. So “guidance” it may be, but smart companies will have in place compliance programmes which render it anything but guidance. Bear in mind also, it applies to member companies, although there is no reason that non members should not embrace it.

If you’re a medical professional and you’re in any doubt about the behaviour of your local distributor of a global brand, you might just consider how big a role you can play in ensuring the industry behaves itself.

It’s another essential fundamental principles guiding the future of the medtech industry in support of efficient future-proof healthcare delivery.

Source: Advamed, Eucomed, medlatest staff