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Final AUA OIG Comments

December 2, 2002

Janet Rehnquist
Inspector General
Department of Health and Human Services
Attn: OIG-8-CPG
Room 5246
Cohen Building
330 Independence Avenue, SW
Washington, DC 20201

Re: OIG-8-CPG - Draft OIG Compliance Program Guidance for Pharmaceutical Manufacturers

Dear Ms. Rehnquist:

  1. Introduction

    The American Urological Association ("AUA"), which represents more than 10,000 practicing urologists in the United States, respectfully submits the following comments to the Office of Inspector General ("OIG") of the Department of Health and Human Services ("HHS") on its Draft Compliance Program Guidance for Pharmaceutical Manufacturers ("Draft Guidance"), which was published in the Federal Register on October 3, 2002. The AUA appreciates the OIG's effort to provide useful guidance to the pharmaceutical industry, and believes that many elements of the Draft Guidance will be very valuable for pharmaceutical companies as they establish internal controls and implement monitoring procedures to identify, correct and prevent fraudulent or wasteful activities.

    The AUA understands that the Draft Guidance was intended to be broad and to outline all potential risk areas for pharmaceutical entities that market and sell drugs that are reimbursable by federally-funded health programs. In fact, the AUA agrees with the OIG that many of the risk areas identified in the Draft Guidance clearly have the potential to violate the Anti-Kickback Statute and the Prescription Drug Marketing Act of 1987. In particular, the AUA applauds the specific references to "active marketing of the spread" and "switching arrangements."

    However, the AUA does have grave concerns about the statement on page 62062 of the Draft Guidance that lists "Sponsorship or other financing related to third-party educational conferences and meetings attended or taught by physicians or others in a position to generate or influence referrals" as a potential violation of the Anti-Kickback Statute. Clearly, a strict interpretation of this statement by those entities that choose to rely on the Draft Guidance could force national medical specialty organizations, such as the AUA, to eliminate entire portions of their physician education programs-including CME and non-CME education. Currently, financial support by pharmaceutical companies is provided to AUA, as the sponsor of an educational conference or meeting, and AUA, in turn, uses this financial support to reduce the overall conference registration fee for all physician attendees. Without this funding, however, the AUA (as well as other physician associations) would have to so substantially increase registration fees for these educational courses. It is our fear that the effect of this would be to deprive many physicians of the opportunity to take advantage of these courses.

    For the reasons outlined below, the AUA respectfully requests that the OIG omit the sentence outlined above related to sponsorship of third-party educational conferences and meetings from the final guidance it issues, at least until such time as a fuller discussion of this issue can take place and more complete guidance can be offered. We are disturbed by OIG's apparent lack of understanding of how third party sponsorship works and the failure of the initial request for comments to give notice to affected parties, like the AUA, that third party sponsorship might be an issue addressed by the OIG.

  2. Failure to Involve Medical Associations in the Development of the Draft Guidance Creates Serious Concerns about the Adequacy of the Notice Given to the Public and the Sufficiency of OIG's Factual Basis for Offering Any Guidance.

    While the AUA certainly appreciates this opportunity to provide input and information about how medical associations educate their members, it is unfortunate that the OIG did not involve medical associations such as the AUA, who are clearly affected by the Draft Guidance, in the discussions that led to the issuance of the Draft Guidance, while other entities, such as pharmaceutical manufacturers, were involved very early on in the process. In fact, it was not until October 3, 2002, when the Draft Guidance was first published in the Federal Register, that medical associations were put on notice that, in the OIG's view, drug company sponsorship of third-party educational conferences implicated the Anti-Kickback Statute. We fear that this poor procedure had led, inevitably, to guidance that reflects a fundamentally inadequate understanding of the situation that OIG seeks to address.

    Notably, in its June 11, 2001 "Solicitation of Information and Recommendations for Developing a Compliance Program Guidance for the Pharmaceutical Industry," the OIG sought "the input and recommendations of interested parties as the OIG develops a compliance program guidance for the pharmaceutical industry, especially those segments of the industry related to manufacturing, marketing, or providing goods or services to Medicare, Medicaid, and other Federal health care program beneficiaries" (emphasis added).

    Nowhere in this Notice was there any solicitation of comments from other parties such as medical societies or associations. Further, there was no indication whatsoever in this Notice that the OIG would seek to make a blanket, sweeping statement that will effectively chill any real continued pharmaceutical sponsorship of hundreds of third-party educational conferences and meetings. Medical associations such as AUA were, therefore, never given the opportunity to provide meaningful "input and recommendations" on the development of the Draft Guidance, like other interested parties were. Such an omission clearly left a large segment of the interested parties who will eventually be impacted by the Draft Guidance without the early opportunity to have input and to educate the OIG about the process used to ensure that the AUA's education is not biased or influenced by outside parties. This lack of what we believe to be appropriate procedure seems to be flatly inconsistent with the Bush Administration's commendable (and much appreciated) commitment to an open process for the development and implementation of regulatory requirements and guidance.

  3. Because Recent Guidelines Issued by the Pharmaceutical Research and Manufacturers of America Specifically Permit Pharmaceutical Sponsorship of Third-Party Educational Conferences, the OIG's Guidance Is Internally Inconsistent.

    On April 18, 2002, the Executive Committee of the Pharmaceutical Research and Manufacturers of America ("PhRMA"), the trade association for pharmaceutical and biotechnology companies, adopted a voluntary set of guidelines for its members, entitled "Code on Interaction With Healthcare Professionals." The Code went into effect July 1, 2002. With respect to sponsorship of third-party educational or professional meetings, the Code specifically states as follows:

    Continuing medical education (CME) or other third-party scientific and educational conferences or professional meetings can contribute to the improvement of patient care and therefore, financial support from companies is permissible. Since the giving of a subsidy directly to a healthcare professional by a company may be viewed as an inappropriate cash gift, any financial support should be given to the conference's sponsor which, in turn, can use the money to reduce the overall conference registration fee for all attendees.

    The Code also provides that, when companies underwrite medical conferences for a third-party, responsibility for, and control over, the selection of content, faculty, educational methods, materials, and venue, must belong to the organizers of the conferences or meetings in accordance with their guidelines. Significantly, the sponsorship of the AUA's conferences by pharmaceutical companies fully complies with the Code. We believe that it is clear that, under circumstances such as these, there is no even "indirect" inducement or reward that occurs, such as to implicate the prohibition of the statute. Suggesting otherwise, in our view, jeopardizes a host of valuable programs, many of which act to improve physician compliance with federal law, without any real benefit in reducing the risk of violations of the statute.

    In the Draft Guidance, the OIG actually recommends that pharmaceutical manufacturers comply with the standards set by the Code. Accordingly, the Draft Guidance is internally inconsistent in that, on the one hand, it embraces the PhRMA Code, which specifically approves of sponsorship of third-party educational conferences, but, on the other hand, it specifically states that such sponsorship implicates the Anti-Kickback Statute. The OIG needs to resolve this internal inconsistency when it issues its final guidance by making clear that sponsorship activities related to third-party educational conferences that fully comply with the PhRMA Code do not present significant risks under the Anti-Kickback Statute. This can easily be achieved by noting that the third party sponsorship restrictions noted in the Code are sufficient to reduce substantially or eliminate the risk of a statutory violation. In the absence of this kind of clarification, we fear that the existing Draft is an example of the kind of inconsistent guidance that the Bush Administration has pledged itself to eliminate.

    In addition to the fact that the sponsorship of AUA's educational conferences and meetings fully complies with the PhRMA Code, it is important to note that, because the AUA is accredited by the Accreditation Council for Continuing Medical Education ("ACCME") as a provider of CME for physicians, the content and funding of the AUA's CME courses are regulated and monitored by the stringent standards of the ACCME, and are in full compliance with those standards. These standards are very clear about the limitation on product information supplied as part of a presentation specifically to assure that there is no inappropriate influence on prescribing patterns. One possible alternative would be for the OIG to state, in its final guidance, that compliance with these standards adequately addresses the underlying statutory concern.

    For your information, the AUA has enclosed with these comments a copy of the ACCME's Essential Areas and Their Elements and Standards for Commercial Support of Continuing Medical Education. Also provided is a copy of the association's disclaimer which is included in the handouts for all of its CME courses, which clearly identifies any companies that have supported the course and states that "The scientific programs and faculty are independently developed and finalized by the Director of Education and Program Director with no influence or input from these or any companies providing either an unrestricted educational grant or technical support."

  4. Pharmaceutical Sponsorship of Third-Party Educational Meetings and Conferences Presents No Real Risks Under the Anti-Kickback Statute when Appropriate (and Commonly Undertaken) Safeguards Are Implemented.

    The AUA cannot agree with the OIG's substantive position, articulated in the Draft Guidance, that pharmaceutical sponsorship of third party educational meetings or conferences necessarily implicates the Anti-Kickback Statute. The mere fact that a pharmaceutical company provides financial support for a third-party educational conference which includes attendees who are physicians who may be in a position to prescribe the pharmaceutical company's products does not automatically mean that the Anti-Kickback Statute has been violated. As a threshold matter, there must be some linkage between payments and referrals in order for the federal statute to come into play.

    There is no such link, however, when, as is the case with the AUA's meetings, the financial support is not provided directly to the physician attendees, but is provided directly to the conference's sponsor (i.e., AUA), which, in turn, uses this support to reduce the overall conference registration fee for all attendees, including any non-physician attendees, as well as physicians who may not be in a position to order products manufactured by the pharmaceutical sponsors. Also significant to note is that the content of the educational meetings is determined by the AUA, not the pharmaceutical sponsors. Since sponsors do not determine which AUA members participate in AUA programs and enrollment is not based on the "volume or value" of any pharmaceutical purchases, we simply fail to see any linkage that could implicate the statute in any meaningful manner.

    Accordingly, the AUA respectfully requests that the OIG omit the relevant statement from the final guidance. Alternatively, to the extent that the OIG does not feel it is appropriate to strike the statement at issue in its entirety, the AUA would request that the Agency add the following language to the final guidance it issues:

    The OIG is not intending by this comment to discourage third-party sponsorship where a medical specialty association offers a broad array of scientific, clinical and practice-related educational programs on a member-wide basis and the physicians who choose to attend do so voluntarily without regard to whether they use sponsor products or to the volume or value of the products that they could potentially use from the sponsor.

    In the absence of this kind of clarifying statement, we fear that the OIG guidance will have a fundamentally negative effect and will be viewed by the physician community as the product of a lack of clear understanding of the medical profession, the specialty associations that are dedicated to the highest standards of patients under their care and the education offered in order to fulfill that mission.

  5. The OIG's Statement in the Draft Guidance on Sponsorship of Third-Party Conferences Would Chill the Conduction of Conferences Designed to Educate Physicians and Promote Compliance.

    As we have indicated above, the AUA's conferences and seminars that are financially supported, in part, by pharmaceutical companies, are designed to educate its physician members and promote compliance. For example, through its Practice Managers' Network, the AUA provides regional coding and compliance seminars annually to urology practice managers and urologists to educate them about proper coding and billing practices and also how to comply with the various federal health care regulations that affect their practice, including HIPAA, the Anti-Kickback Statute, the Stark Law, and the False Claims Act.

    Educational grants allow associations such as the AUA to offer these courses at a lower fee than would otherwise be charged, enabling more of the association's members and their office staff to receive this vital education from a trusted source. Because these activities focus on promoting compliance and adherence to pertinent rules and regulations, these efforts actually contribute to the reduction of activities that the OIG considers inappropriate.

    However, it is clear that the OIG's vague and sweeping statement about the applicability of the Anti-Kickback Statute to such conferences will act as a harsh deterrent to the continued sponsorship of these seminars by pharmaceutical companies, meaning that these educational seminars will not be able to be offered at a financially affordable rate for physicians. Unfortunately, this will inevitably mean that access to the most current relevant scientific and compliance education will be substantially impeded, to the detriment of the medical profession, the government, and, most importantly, our members' patients.

  6. Conclusion

    For the reasons set forth above, the AUA respectfully requests that, when the OIG issues its final guidance, it omit the unqualified statement from its Draft Guidance relating to sponsorship of third-party educational conferences. The AUA believes that it would be helpful for the OIG to engage in some type of a process by which it gives separate guidance on this issue, be it through a Special Fraud Alert, the creation of a new regulatory safe harbor, or other means, so long as that process is fair and equitable, and all interested parties are provided an opportunity to weigh in with their comments and recommendations.

    Alternatively, as outlined above, to the extent that the OIG does not feel it is appropriate to strike the statement at issue in its entirety from the final guidance, the AUA respectfully requests that the clarifying language offered above be added.

Again, we appreciate your consideration of our comments. If you have any questions or would like more information, please contact Robin Hudson, Manager of Regulatory Affairs, at 410-689-3762 or


Winston K. Mebust, MD
American Urological Association

cc: William F. Gee, MD, AUA Health Policy Chair
David L. McCullough, MD, AUA Education Council Chair
Michele Dinkel, AUA Director of Education
Cherie L. McNett, AUA Director of Government Affairs
Rick Rutherford, AUA Director of Practice Management


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