AdvaMed’s 2009 Guidelines Effect on Health Care Provider Consulting Agreements Massachusetts Biotech Council

1. AdvaMed’s 2009 Guidelines Effect on Health Care Provider Consulting AgreementsMassachusetts Biotech Council March 12, 2009

2. What is AdvaMed and Why Do We Care? • Advanced Medical Technology Association (AdvaMed) • On December 18, 2008, AdvaMed's Board of Directors unanimously approved a major update of the Code of Ethics on Interactions with Health Care Professionals.  Effective July 2009. • The revised Code further clarifies and distinguishes between appropriate and inappropriate activity between health care professionals and representatives of AdvaMed member companies. • It also presents non-member companies with an opportunity to adopt the AdvaMed Code’s principles and unite industry in addressing common issues in a consistent manner.

3. Primary Reason We Care About AdvaMed • Rep. Henry Waxman: Chairman of House Energy and Commerce Committee • In January 2009, characterized FDA guidance on journal articles concerning off-label use of approved drugs: "In the final hours of this [Bush] administration, political appointees at FDA have given drug companies a long-coveted parting gift." • AdvaMed had argued that the original wording would have disadvantaged 510(k)-cleared products, which generally do not undergo randomized, controlled clinical trials. • The new wording is very close to what the trade group had requested in April 2008 comments to FDA.

4. PhRMA Guidelines for Healthcare Professional Consultants • No “token consulting or advisory” arrangements; must provide evidence of a “bona-fide consulting arrangement”. • Requirement of a written contract which includes basis for payment • Number of healthcare professional consultants should not be greater than that which is reasonably necessary for the purpose of the project • Company must maintain adequate records of services provided and demonstrates appropriate use of those services

5. AdvaMed Guidelines On December 18, 2008, AdvaMed's Board of Directors unanimously approved a major update of the Code of Ethics on Interactions with Health Care Professionals.  Effective July 2009. The revised Code further clarifies and distinguishes between appropriate and inappropriate activity between health care professionals and representatives of AdvaMed member companies. It also presents non-member companies with an opportunity to adopt the AdvaMed Code’s principles and unite industry in addressing common issues in a consistent manner.

6. Consulting Arrangements with HCP’s Purpose. Companies pay fair market value compensation for consulting services that are intended to fill a legitimate business need and do not constitute unlawful inducement.

7. AdvaMed Guidelines Suggest: Criteria for HCP Consulting Agreements • When a Company contracts with a consultant to conduct clinical research services, there should be a written research protocol appended to the contract. • Consulting arrangements should be entered into only where a legitimate need for the services is identified in advance and documented. • Selection of a consultant should be made on the basis of the consultant’s qualifications and expertise to meet the defined need. • Compensation paid to a consultant should be consistent with fair market value in an arm’s length transaction for the services provided . • A Company may pay for documented, reasonable and actual expenses incurred by a consultant that are necessary to carry out the consulting arrangement, such as costs for travel, modest meals, and lodging. Every effort should be made to avoid need for travel.

8. Contracts Associates Suggested Language No Obligations. The financial support provided to Physician under this Agreement imposes no obligation, express or implied, to purchase, order, lease or give favorable formulary treatment to any Company product, or to arrange for or recommend the purchase, order, lease or favorable formulary treatment of any Company product. Compliance with Policies. If Physician is a faculty member at or employee of a university or hospital (“Institution”) or of another company, Physician represents and warrants that pursuant to Institution’s or company’s policies concerning professional consulting and additional workload, Physician is permitted to enter into this Agreement. If Physician is required by Physician’s Institution to disclose to it any proposed agreements with industry, Physician has made that disclosure.

9. Where Can We Get More Detail on HCP Relationships? • http://www.advamed.org/MemberPortal/About/code/

10. Closing Comments • Colleen M. Sproul, Contracts Associates, Inc. • Phone: 617.669.8080 • Email cms@contractsassociates.com or visit us at www.contractsassociates.com THANK YOU!