On March 25, 2022, the MedTech board of directors approved a new version of the MedTech Europe Code of Ethical Business Practice (the Code). Eline van Nimwegen, international senior associate, Eversheds Sutherland, takes us through the updates that become effective 1 January 2023
The Code is a self-regulatory instrument developed by the medical technology industry that regulates all aspects of the industry’s relationship with healthcare professionals (HCPs) and healthcare organisations (HCOs) and that is binding for its members.
The last update of the Code was in 2015. The revised Code reflects evolving standards and best business practices that have been developed in recent years.
Apart from readability improvements and a general clean-up, the revised Code contains, among other things:
- A new annex on calculating the value of in-kind educational grants
- A new section on collaborative research
- A new chapter providing guidance on third-party intermediaries
This article explains each of these updates.
In-kind educational grants
‘In-kind educational grants’ have been defined as non-cash contributions to HCOs to support an event or educational programme.
The new annex describes how the value of such grants should be calculated. MedTech companies are advised to check whether the valuation of in-kind educational grants is done correctly in order to ensure that they are correctly disclosed, and any maximum values prescribed under local laws and regulations are not exceeded.
The new section describes that – provided that this is allowed by local laws and regulations – MedTech companies may collaborate with non-industry partners on scientific research if the work has a ‘legitimate purpose’.
Each partner must actively contribute ‘significant skills, experience and/or resource complementary to the collaboration’, according to the Code.
The question-and-answer section clarifies the definition of the term ‘legitimate purpose’ in the context of collaborative research, which in essence means that the research ‘must enhance patient care or be for the benefit of patients, or alternatively benefit the HCO and, as a minimum, maintain patient care’.
When considering collaborations, MedTech companies should take this new guidance into account.
The Code states that MedTech companies:
must be mindful of the fact that they may be liable for the activities of third-party intermediaries who interact with HCPs or HCOs in connection with the sale, promotion or other activity involving member companies’ products and/or services.
Provided that local laws and regulations permit, this means that contracts should impose obligations on intermediaries and measures should be taken to mitigate risks.
MedTech companies are encouraged to include terms regarding compliance with laws, audit rights and early termination rights in case of non-compliance in their contracts.
Measures that are mentioned include a risk-based pre-engagement assessment, an evaluation of the risk profile of the intermediary and continuous due diligence, as well as onboarding and ongoing training of intermediaries. MedTech companies are advised to assess their contracts and internal procedures to ensure that necessary terms and measures are in place.
This article was originally published in the Life Sciences Newsletter of the International Law Office – www.lexology.com/commentary