Restrictions on Interactions Between Pharmaceutical Companies and Physicians

 

April 30, 2021

Anna Ivanova Associate at BRACE Law Firm ©

 

The Rules of Good Pharmacovigilance Practice of the Eurasian Economic Union, approved by Decision of the Council of the Eurasian Economic Commission No. 87 dated November 3, 2016, establish the principle of ensuring that the requirements of patients, medical professionals, and society as a whole are met regarding the safety of medicinal products.[1] One cannot deny that pharmaceutical companies contribute significantly to the development of medical and pharmaceutical science through scientific events, clinical trials, and clinical tests. On the other hand, patients must have access to medicinal products and the ability to choose both high-cost drugs and their analogs. Ultimately, the pharmacy purchases depend on the physician’s prescription. Therefore, it is essential to ensure that no hidden agreements exist between pharmaceutical companies and medical professionals that could harm patients or unfairly prioritize a specific drug on the pharmaceutical market.

Thus, a critical problem exists in the legal regulation of interactions between pharmaceutical companies and medical and pharmaceutical workers aimed at improving manufactured or distributed pharmaceutical products.

Federal Law No. 323-FZ dated November 21, 2011, On the Fundamentals of Health Protection of Citizens in the Russian Federation (the "Law on Health Protection") establishes restrictions on the activities of medical and pharmaceutical workers, including their interactions with pharmaceutical organizations.

Specifically, medical workers and heads of medical organizations may not:

1. accept gifts or cash from organizations involved in the development, production, or sale of medicinal products or medical devices, organizations holding rights to use a trade name of a medicinal product, pharmaceutical wholesalers, or pharmacy organizations (including their representatives or other individuals and entities acting on their behalf). This includes funds for entertainment, recreation, or travel to vacation spots, as well as participation in entertainment events paid for by companies or their representatives. Exceptions include remuneration under contracts for conducting clinical trials of medicinal products or clinical tests of medical devices, as well as remuneration related to the medical worker’s teaching or scientific activities;
2. enter into agreements with pharmaceutical companies and their representatives regarding the prescription or recommendation of medicinal products or medical devices to patients (except for contracts to conduct clinical trials of medicinal products or clinical tests of medical devices);
3. receive samples of medicinal products or medical devices from pharmaceutical companies and their representatives for distribution to patients (except for cases related to conducting clinical trials of medicinal products or clinical tests of medical devices);
4. provide inaccurate or incomplete information to patients regarding used medicinal products or medical devices when prescribing a course of treatment, including concealing information about the availability of interchangeable medicinal products or medical devices;
5. receive company representatives, except for cases related to conducting clinical trials of medicinal products or clinical tests of medical devices, or participating in meetings of medical workers and other events aimed at improving their professional level or providing information related to pharmacovigilance and medical device safety monitoring, as established by the medical organization’s administration;
6. issue prescriptions for medicinal products or medical devices on forms containing advertising or on prescription forms where the name of the medicinal product or medical device is pre-printed.

It is important to note that these prohibitions apply specifically to medical workers, rather than medical organizations themselves.

This distinction is justified because Article 582 of the Civil Code of the Russian Federation (the "Civil Code") expressly provides for the possibility of making donations to medical organizations.

According to Article 4 of Federal Law No. 135-FZ dated August 11, 1995, On Charitable Activities and Charity Organizations, legal entities may freely engage in charitable activities based on voluntariness and freedom of choice regarding its goals. No one may restrict the freedom to choose the goals of charitable activity or the forms of its implementation established by the Law on Charitable Activities.

The Ministry of Health of Russia provides corresponding clarifications. According to these clarifications, a medical organization, as a legal entity, may receive charitable donations from non-profit charitable organizations established to carry out charitable activities in the interest of society or specific categories of persons. The issue is more complex regarding commercial organizations, especially pharmaceutical companies. It is assumed that a medical organization may receive, for example, a batch of medicinal products as a donation on a gratuitous basis (provided they have certificates and sufficient shelf life), if this contributes to the medical organization’s charter activities and protects citizens’ interests, provided there is no corrupt interest from the administration or staff.[2]

According to Clauses 3.4.3 and 3.4.4 of the Code of Practice of the Association of International Pharmaceutical Manufacturers (the "AIPM"), companies may pay for or reimburse the expenses of healthcare professionals directly related to services rendered, including travel to the place of service, accommodation, and meals.

When paying for or reimbursing expenses, the following requirements must be met:

• the use of hotels or facilities that the public associates with luxury or exclusivity is prohibited, regardless of their class;
• meals must be within reasonable limits;
• for healthcare professional travel not exceeding four hours during daytime, economy class airfare should be purchased;
• reimbursement of any expenses for accompanying persons is prohibited.

Exceptions must be justified by objective necessity and coordinated with company management.[3]

Similar restrictions in the Law on Health Protection are established for pharmaceutical workers and heads of pharmacy organizations.

Pharmaceutical workers and heads of pharmacy organizations may not:

1. accept gifts, cash, or payment for entertainment, recreation, or travel to vacation spots, or participate in entertainment events paid for by a company or its representative;
2. receive samples of medicinal products or medical devices from a company or its representative for distribution to the public;
3. enter into agreements with a company or its representative to offer specific medicinal products or medical devices to the public;
4. provide inaccurate or incomplete information to the public about the availability of medicinal products, including those with the same International Nonproprietary Name ("INN"), or medical devices, including concealing information about the availability of lower-priced medicinal products and medical devices.

It is also important to note that these restrictions do not apply directly to pharmacy organizations.

By virtue of Article 45 of the Law on the Circulation of Medicinal Products, manufacturers of medicinal products may sell or transfer medicinal products in accordance with the procedure established by Russian legislation to pharmacy organizations, veterinary pharmacy organizations, or individual entrepreneurs holding a pharmaceutical or medical license.

To strengthen confidence that a physician's decision is unbiased, objective, and balanced, the international pharmaceutical industry adopted an initiative to make relationships between pharmaceutical companies and healthcare workers clear and transparent to the public.

According to Clause 6.5.1 of the AIPM Code of Practice, representatives of pharmaceutical companies may visit pharmacy organizations to inform pharmaceutical workers and heads of pharmacy organizations about manufactured or sold pharmaceutical products.

Article 67.1 of the Law on the Circulation of Medicinal Products establishes restrictions imposed when carrying out activities in the sphere of medicinal product circulation. Organizations involved in the development, production, or sale of medicinal products for medical use, organizations holding rights to use the trade name of a medicinal product, pharmaceutical wholesalers, and pharmacy organizations (including their representatives or other individuals and entities acting on their behalf) may not:

1. present gifts, pay cash, or pay for entertainment, recreation, or travel to vacation spots, or involve medical workers and heads of medical organizations in entertainment events paid for by their own funds. Exceptions include remuneration under contracts for conducting clinical trials of medicinal products or remuneration related to the medical worker’s teaching or scientific activities;
2. enter into agreements regarding the prescription or recommendation of medicinal products for medical use to patients (except for contracts to conduct clinical trials of medicinal products);
3. provide samples of medicinal products for medical use for distribution to patients (except for cases related to conducting clinical trials of medicinal products);
4. provide inaccurate or incomplete information about medicinal products for medical use;
5. visit them during working hours at their workplaces, except for cases related to conducting clinical trials of medicinal products or participating in meetings and other events aimed at improving their professional level or providing information related to pharmacovigilance, in the manner established by the head of the medical organization;
6. induce the prescription of medicinal products for medical use on forms containing advertising or on prescription forms where the name of the medicinal product is pre-printed.

It is important to note that during the pandemic, these restrictions do not apply to medicinal products not registered in Russia for which the Ministry of Health has issued a temporary circulation permit.[4]

Effectively, the above rules (both the restrictions and the exceptions for certain drugs) aim to eliminate the corruption factor in interactions between pharmaceutical companies and representatives of the medical community and pharmaceutical workers, while maintaining the ability to provide patients with necessary medicinal products.

Next, this article examines the practice of applying these restrictions when organizing interactions between pharmaceutical companies and physicians.

Practical Application of Restrictions in Interactions Between Pharmaceutical Companies and Physicians; Settlement of Conflicts of Interest

Summarizing the above restrictions, one may conclude that interaction between pharmaceutical companies and medical workers should occur during clinical trials of medicinal products, as well as within the framework of the medical worker’s teaching or scientific activities.

However, current legislation lacks a definition for the term "teaching activity". According to the Model Law On the Status of an Education Worker, adopted by the Interparliamentary Assembly of the CIS Member States on November 16, 2006, "teaching activity is the process of instruction and upbringing aimed at the comprehensive development of the student and carried out both in institutionalized forms and through individual labor activity". It is important to note that this concept is broader than the term "educational activity" established by Federal Law No. 273-FZ dated December 29, 2012, On Education in the Russian Federation, which is defined as the implementation of educational programs. According to the Model Law On the Status of a Scientist and a Scientific Worker, approved by the Interparliamentary Assembly of the CIS Member States on November 25, 2008, scientific activity is "creative activity aimed at obtaining new knowledge about nature, man, and society and using scientific knowledge and new ways of its application in the interests of scientific and technical progress, economic well-being, humanitarian cooperation, cultural and moral development, ensuring human health, life safety, and environmental preservation".

In accordance with Article 2 of Federal Law No. 127-FZ dated August 23, 1996, On Science and State Scientific and Technical Policy, scientific and technical activity is "activity aimed at obtaining and applying new knowledge to solve technological, engineering, economic, social, humanitarian, and other problems, and ensuring the functioning of science, technology, and production as a unified system". Effectively, the disclosure of this term suggests its broad application. We believe that scientific events held by pharmaceutical companies can be classified as scientific activity.

However, questions sometimes arise regarding the legality of scientific events held by pharmaceutical companies involving medical workers as speakers. In such cases, to avoid disputed situations, it is extremely important to formulate the terms of the services provided by the medical worker within the contract with the pharmaceutical company.

Attention must also be paid to the event venue. There are risks that holding a scientific event at a resort or other recreational site may be recognized as a violation of the restriction on physicians receiving remuneration. When concluding contracts with medical workers, it is advisable to recommend limiting the distribution of photographic materials from the event on social media or regulating the posting of photos subject to the organizer’s approval.[5]

Effectively, a physician may attend an event as either a speaker or a listener. In both cases, the format of the event itself must be observed. For instance, Article 67.1 of the Law on the Circulation of Medicinal Products establishes requirements that pharmaceutical companies must follow when holding scientific events or other events aimed at improving the professional level of medical workers or providing pharmacovigilance information. It is prohibited to prevent the participation of other organizations that produce or sell medicinal products with a similar pharmacological mechanism of action or to create discriminatory conditions for some participants compared to others.

It is also prohibited to provide different amounts of time for participant presentations or different amounts of space for demonstrating samples or promotional materials at exhibitions and stands, unless such conditions are fixed in financing agreements and are due to different costs incurred by the participants.

Furthermore, it is prohibited to set a participation fee that exceeds the actual costs of organizing the event, as this would restrict the number of participants.

Events should be aimed at educating the maximum number of representatives of the pharmaceutical and medical community. Consequently, these legal norms are aimed at ensuring equality for all participants.

At the same time, it is important to note that the amount of remuneration for physicians invited as lecturers or speakers to a scientific event organized by a pharmaceutical company is not legally limited and can be quite substantial.[6] We believe the absence of such limits is justified, given that the physician performs scientific or teaching activity requiring additional time outside of their primary work.

When holding scientific events, it is crucial to carefully define the topics and content of the presentations and the placement of promotional materials. The presentation topic should be scientific rather than promotional. The specialist’s presentation itself should not contain promotional materials for medicinal products. A separate question often arises regarding the possibility of distributing promotional materials at scientific or professional development events.

Article 24 of Federal Law No. 38-FZ dated March 13, 2006, On Advertising (the "Law on Advertising") allows the advertising of medicinal products at medical or pharmaceutical exhibitions, seminars, conferences, and similar events. Such materials are not subject to the requirements that advertising must not contain expressions of gratitude by individuals or create an impression of advantages by referencing mandatory state registration studies. To prevent the distribution of such promotional materials outside the events, it is recommended to include warning notices such as "for distribution at the seminar". Participants should also be warned against further distributing materials after the event, as in practice, handouts may end up in medical facilities accessible to patients, which would be considered a violation of advertising legislation.

It should be noted that according to Article 67.2 of the Law on the Circulation of Medicinal Products, pharmaceutical organizations and their representatives that organize or finance events must ensure access to information about the date, place, time, plans, programs, topics, and participants by posting such information on their official websites at least two months before the start of the event.

This information is posted in the automated system titled "List of Notices on Scientific Events". In accordance with Roszdravnadzor Letter No. 01I-2001/14 dated December 16, 2014, to obtain access to the system, information must be sent to the specified email address using the required form.

Liability for failure to fulfill this notification obligation is provided for by Article 19.7.8 of the Code of Administrative Offenses of the Russian Federation ("CAO RF"), titled "Failure to Submit Information or Submission of Knowingly Inaccurate Information to the Federal Executive Body Exercising Control and Supervision Functions in the Sphere of Healthcare", and entails an administrative fine on officials in the amount of 10,000 to 15,000 rubles; on legal entities – in the amount of 30,000 to 70,000 rubles.

In addition to the restrictions mentioned above, the prohibition on issuing prescriptions for medicinal products or medical devices on forms containing advertising or on prescription forms with pre-printed names causes many disputes in practice. Advertising should be understood as information about a person, goods, ideas, or initiatives distributed in any form by any means, intended for an indefinite circle of persons, and designed to form or maintain interest in such persons or goods to facilitate their sale.

For instance, there is practice of a control authority initiating a case regarding a physician issuing a prescription with an image of a medical device. The Chelyabinsk FAS established that an orthopedic traumatologist issued a prescription on a form from a store selling medical devices, which depicted a medical device. The physician explained that he took the form to demonstrate the appearance of the prescribed device to patients. There were no contractual or other legal relationships between the physician and the manufacturers or sellers. Consequently, the physician was held disciplinarily liable; however, since it was an isolated violation, the authority decided not to issue an order to the medical facility, although the complaint was recognized as substantiated.[7]

We believe that each violation should be considered individually, taking into account the factual circumstances, as the physician’s actions in the above case were aimed at helping patients find the necessary medical device and maximizing their information within the scope of the diligent performance of their duties.

Furthermore, it is essential to avoid any corruption component in interactions between pharmaceutical companies and medical workers.

For example, the Investigative Committee of the Russian Federation for the Chelyabinsk Region initiated a criminal case under Part 5 of Article 291 of the Criminal Code (giving a bribe to an official personally or through an intermediary in an especially large amount). According to investigators, an employee of a commercial organization transferred bribes totaling more than 1 million rubles through intermediaries to physicians at medical institutions for prescribing drugs produced by a specific pharmaceutical company.[8]

It should be noted that liability under Articles 290 (receiving a bribe) and 291 (giving a bribe) of the Criminal Code applies to bribes given to officials. Officials are defined as persons who permanently, temporarily, or by special authority exercise the functions of a representative of authority or perform organizational, administrative, or economic functions in state bodies or local government bodies. Thus, it may be possible not to qualify the transfer of funds to a physician who does not hold a management position in a medical organization as a criminal offense.

However, the physician remains liable under Article 6.29 of the CAO RF regarding conflicts of interest. Failure by a medical worker to provide information about a conflict of interest to the head of the medical organization, or by a pharmaceutical worker to the head of the pharmacy organization, entails an administrative fine of 3,000 to 5,000 rubles. Failure by the head of a medical or pharmacy organization to timely notify the authorized federal executive body about a conflict of interest entails a fine of 5,000 to 10,000 rubles.

Federal Law No. 273-FZ dated December 25, 2008, On Countering Corruption provides a general definition of a conflict of interest: "a situation in which the personal interest (direct or indirect) of a person holding a position that requires taking measures to prevent and settle conflicts of interest affects or may affect the proper, objective, and impartial performance of their official duties".

The Law on Health Protection establishes what constitutes a conflict of interest for a medical or pharmaceutical worker: a situation in which, in the course of their professional activities, a personal interest arises in obtaining material benefit or another advantage personally or through a company representative, which affects or may affect the proper performance of professional duties, including those related to the development and review of clinical recommendations, due to the contradiction between personal interest and the interests of patients.

The Law on Health Protection obliges workers to inform the head of their medical or pharmacy organization in writing when a conflict of interest arises; individual entrepreneurs must inform the Ministry of Health of Russia. To settle a conflict of interest, a commission is created, which, if it establishes signs of an administrative offense or a crime, transfers the information to law enforcement agencies within three working days.[9]

It is important to note that the legislation does not establish exact criteria for determining the presence or absence of a conflict of interest. This can lead to many disputes. For example, after examining a patient at a state clinic, a physician recommended an MRI at a private clinic where he worked as a part-time employee. Reviewing this dispute, the Orenburg Regional Court (Decision dated November 11, 2016, Case No. 21-578-2016) found no evidence of personal interest, as it is essential to establish the fact of the worker’s actual interest in receiving profit from the patient.[10]

Notably, the Ministry of Health of the Ulyanovsk Region published guidelines outlining signs of conflict of interest and settlement procedures, including:

1. the worker participates in decisions that may bring material or non-material benefits to relatives, friends, or other persons of interest – settlement method: recusal from the decision;
2. the worker participates in personnel decisions regarding relatives or friends – settlement method: recusal, transfer to another position, or changing the scope of duties;
3. the worker or a person of interest receives material goods or services from a third-party organization that has business relations with the medical organization – settlement method: recommendation to refuse the goods/services, recusal from decisions, or changing labor duties;
4. the worker or a person of interest receives expensive gifts from a subordinate or another worker over whom they exercise control – settlement method: recommendation to return the gift, transfer, or changing the scope of duties;
5. the worker uses information learned during labor duties for profit or competitive advantage for themselves or a person of interest – settlement method: establishing corporate conduct rules prohibiting the disclosure or personal use of such information.[11]

We consider these recommendations to be quite substantive and believe that developing such recommendations at the federal level would provide necessary universal guidelines for resolving conflicts of interest.

It should be noted that a new model of interaction between pharmaceutical companies and physicians is gradually emerging in Russia. Specifically, the pharmaceutical company GlaxoSmithKline ("GSK") has refused any payments to physicians and scientists, including payments for educational activities (where the company pays for a physician's participation in a scientific conference). As the head of this company noted: "We provide grants for independent medical education to medical professional organizations. The organization itself distributes the funds in the way it deems necessary, without any influence from GSK".[12] Recall that under Russian law, grants are funds and other assets transferred gratuitously and irrevocably by citizens and legal entities to carry out specific scientific or innovation programs and projects on terms provided by the grantors.

Based on the analysis performed, it is important to note that the interaction between pharmaceutical companies and physicians is a vital component of the development of both the medical and pharmaceutical industries. At the same time, it is impossible to deny the need to exclude any corruption factors and other situations entailing a violation of patient interests from these legal relationships.

_____________

References

[1] Rules of Good Pharmacovigilance Practice of the Eurasian Economic Union, approved by Decision of the Council of the Eurasian Economic Commission No. 87 dated November 3, 2016.

[2] Clarifications of Article 74 of Federal Law No. 323-FZ dated November 21, 2011, On the Fundamentals of Health Protection of Citizens in the Russian Federation. Ministry of Health of the Ulyanovsk Region.

[3] Code of Practice of the Association of International Pharmaceutical Manufacturers (AIPM).

[4] Decree of the Government of the Russian Federation No. 441 dated April 3, 2020, On the Features of the Circulation of Medicinal Products for Medical Use Intended for Use in Conditions of the Threat of Emergence, Emergence, and Liquidation of an Emergency and for Organizing the Provision of Medical Care to Persons Affected by Emergencies, Preventing Emergencies, and Treating Diseases Representing a Danger to Others, as well as Diseases and Injuries Resulting from the Effects of Adverse Chemical, Biological, and Radiation Factors.

[5] Physicians go on exotic trips at the expense of pharmaceutical companies. March 11, 2011. News of Estonia.

[6] Millionaire physicians: who and what pharmaceutical companies pay for // provrach.ru. July 10, 2019.

[7] Decision of the Chelyabinsk FAS Russia No. 57-08/2018 dated September 12, 2018.

[8] Collusion behind the patient's back. Pharmacists paid physicians for prescribing their drugs // Rossiyskaya Gazeta. June 5, 2014.

[9] Regulations on the Commission of the Ministry of Health of the Russian Federation for the Settlement of Conflicts of Interest in the Performance of Medical and Pharmaceutical Activities, approved by Order of the Ministry of Health of the Russian Federation No. 1350n dated December 21, 2012.

[10] Zaitseva G.G., Professional Conflict of Interest: Who is in the Risk Zone? // Head of an Autonomous Institution. 2019. No. 2. pp. 39 - 47.

[11] Order of the Healthcare Department of the Kostroma Region No. 246 dated April 1, 2016, On the Approval of Methodological Recommendations for the Settlement of Conflicts of Interest in Regional State Medical Organizations.

[12] "We collaborated with 370 physicians". Nick Hirons tells how many physicians in Russia GSK paid, when it stopped doing so, and why the company, physicians, and patients will benefit from this // Vedomosti. August 5, 2016.