Observation Deck

‘My sales reps don’t love me anymore’

Have you noticed a drop-off in the number of branded promotional items, such as pens and Post-It pads, being distributed by your sales reps? Fewer bagels-and-cream-cheese spreads? Have your clinicians commented about the “spartan” nature of the accommodations for their last vendor-sponsored training session, or perhaps the rather ordinary food and wine served there?

Times are tough, but that’s not the only reason your sales reps are getting skimpy on the goodies. The fact is, sales reps and their companies are feeling the heat to meet tougher standards of openness and transparency. They’re especially sensitive to the public perception – and yours too – that they’re way too tight with clinicians.

In December, AdvaMed – an association representing 1,200 manufacturers – came out with a tougher version of its Code of Ethics, derived from the federal Anti-Kickback Statute, among other authorities. The most recent update, which becomes effective July 2009, makes for interesting reading. First off, AdvaMed defines “healthcare professional” as “individuals who purchase, lease, recommend, use, arrange for the purchase or lease of, or prescribe companies’ medical technologies.” That includes you.

The new Code allows sales reps to provide “modest meals” as an “occasional business courtesy in connection with business interaction with [healthcare professionals] that involve the presentation of scientific, educational or business information.” That includes substantive discussion of pricing or other contract terms. But the meals may only be provided to professionals who actually attend the meeting. “No meals for office staff where everyone does not attend,” says the Code. “No ‘dine and dash’ or take-out.”

Gifts of modest value are OK, but only if they benefit patients or serve a genuine educational function. No more non-educational, branded promo items, even if they are of minimal value, such as pens, mugs, etc. No more scrubs or office supplies either. And no more cookies, wine, flowers, holiday gifts, etc.

Among other provisions:

  • Training on medical technologies or techniques must be conducted “in a setting that is conducive to the effective transmission of information.”
  • Vendors may provide grants and sponsor meals and speakers for professional conferences or organizations, but they “should be modest in value, subordinate in time and focus to the purpose of the conference, and clearly separate from the CME portion of program.”
  • Vendors may continue to pay consulting fees or royalties to clinicians who help them develop technologies. But the company must write down its criteria for such arrangements, and “[c]ompensation should be consistent with fair market value …”
  • Vendors can provide single-use products or capital equipment for the healthcare professional to evaluate. But the number of single-use products must not exceed the amount “reasonably necessary for the adequate evaluation.” And multiple-use products “should be furnished only for a period of time that is reasonable to allow an adequate evaluation.”

Vendors that adhere to the revised Code are encouraged to submit to AdvaMed an annual certification to that effect. AdvaMed will publish that information on its Web site, so you can see if your vendors are on it.

Despite the sophisticated supply-chain systems in place today, buying and selling are still relationship-based activities. AdvaMed’s Code of Ethics is designed to help everyone in the supply chain build strong relationships while keeping in mind the goals of superior patient care and the lowest cost.

To read more about AdvaMed’s Code of Ethics, go to http://www.advamed.org/MemberPortal/About/code

About the Author

Mark Thill
Mark Thill is the Editor of The Journal of Healthcare Contracting and has been reporting on healthcare supply chain issues since 1985. He is a graduate of Dominican University in River Forest, Ill., and he received a master's degree in journalism from Northwestern University in Evanston, Ill.