December 2002 Bulletin

PhRMA adopts new Code

Voluntary guidelines on interactions with healthcare professionals to enhance patient care

By Jeanne L. DelSignore, MD, and reviewed by Richard N. Peterson, JD, MHA

On April 18, 2002, the Pharmaceutical Research Manufacturers of America (PhRMA) adopted a new Code on Interactions with Health Care Professionals, establishing an effective date of July 1, 2002.

PhRMA represents research-based pharmaceutical and biotechnology companies that develop and market new medicines.

The intention of the new Code is to specifically address interactions with respect to marketed products and pre-launch activities. It does not address relationships with clinical investigators pertaining to pre-approval for drug studies.

PhRMA leaders have clearly stated that the intention of the new Code is to reinforce their belief that all interactions with healthcare professionals are to benefit patients and to enhance the practice of medicine.1 It is based on the principle that the health care professional should make all patient care decisions objectively and in the patient’s best interest. The need for a new Code arose because of the evolution of more aggressive marketing strategies that have been sharply criticized and publicized in the press.

Similar to most medical society Codes of Ethics, the new PhRMA Code is voluntary. The efforts put forth by the creators of the Code reflect their attempt to create guidelines that all pharmaceutical companies will hopefully follow. Although the new Code closely parallels those of the American Medical Association (AMA) and the American Academy of Orthopaedic Surgeons (AAOS), there are several areas where it is even more restrictive.

For example, the new PhRMA code prohibits practices that the AMA and AAOS Guidelines allow, or simply do not specifically address. These include the prohibition of industry-sponsored social events held in conjunction with an educational meeting, disallowing spouses to attend meals or social events, even if the cost is modest,2 and the prohibition of gifts to physicians—even if modest and related to patient care, if the gifts are given on "more than an occasional basis."3

The new Code specifically addresses industry involvement in Continuing Medical Education (CME) activities. Industry has played a major role in supporting educational events, grants and gifts to institutions and individuals.

Industry support of CME activities has become particularly prevalent lately due to the shrinking availability of funding from government and other private sources. According to the Accreditation Council for Continuing Medical Education (ACCME) 1999 annual report of data and income expenses for ACCME accredited providers, industry support for CME activities accounted for roughly half of the $1.1 billion spent for all CME in 1999. This represents a two-fold increase in industry contributions since 1996. Over the past five years, CME expenditures have seen a 71 percent increase. One third of the medical schools that sponsored CME courses received more than 40 percent of their CME revenue from industry.4 Thus, with decreased available funding for CME, sponsors of continuing education are looking more frequently to industry as a source of corporate sponsorship.

In reviewing the history of the development of ethical guidelines regarding industry’s relationship with health care organizations and professionals, it is helpful to look back to the early 1980s—when industry offered incentive programs and lavish gifts in possible return for the physician’s attention and eventual altered decision making.

Such gifts included free airline travel, vacation bonuses, gifts for personal use and all-expense paid trips for physicians and family members to attend meetings of questionable educational value.5 As a result of these aggressive marketing tactics, the AMA Council on Ethical and Judicial Affairs (CEJA) developed guidelines in 1991 addressing the topic of the physicians’ relationship with industry.6

CEJA guidelines stated that any gifts from industry should not be of substantial value and should entail a direct benefit to the patient. Cash gifts and gifts with "strings attached" were strictly prohibited. Receipt of gifts such as dinners and social events were considered ethical, providing that they were given in conjunction with an educational activity. Receipt of gifts such as golf outings, tickets to sporting events, dinners or other incentives in the absence of education were declared as unethical. Many specialty societies, including the AAOS, and industry adopted these guidelines in concept, but further clarification was requested by physicians, industry and the Department of Health and Human Services Office of Inspector General.7

In response to these inquiries, CEJA published an addendum "Clarification of Gifts to Physicians from Industry" in the Food and Drug Law Journal (1992) and redistributed to AMA members in March, 2000.8 Within the addendum, the question regarding whether a physician may ethically receive subsidies to defray the cost of travel, tuition and lodging was discussed in Guideline 4 (a) in which the AMA states, "Medical specialties are in a better position to advise physicians regarding the appropriateness of reimbursement with regard to these trips. In cases where the company insists on such visits as a means of protection from liability for improper usage, physicians and their specialties should make the judgment. In no case would honoraria be appropriate and any travel expenses should be only those strictly necessary."

Regarding the issue of physicians receiving subsidies to defray the cost of a meeting, the PhRMA Code expressly prohibits any reimbursement to physicians attending the course.9 The only exception applies to those providing genuine consulting services, course faculty members and physicians-in-training.10

The AMA, although opposed to the concept of physicians receiving any subsidies to defray the cost of attending a course, deferred such decision making to the specialty societies.

AAOS revised Opinion Statement on gifts from industry

In December 2001, the AAOS Board of Directors approved a revised Opinion Statement on Gifts from Industry, which addresses the issue of physicians receiving subsidies to attend courses.11 The revised statement was based on information received from the Board of Councilors meeting in October 2001, knowledge of the Academy’s decision to allow the Council on Education "broad latitude to collaborate with industry in the development of CME courses with the provision that all efforts be within the ACCME Guidelines and the AAOS Code of Ethics and the 1992 AMA Clarification statement.

Given the knowledge that industry plays a major role in supporting continuing education events, the AAOS Ethics Committee members developed the revised opinion statement to be more contemporary, reflect current practice and provide guidelines to assist the membership with making appropriate decisions. Within these revised guidelines, the AAOS acknowledged that it may be appropriate for industry to provide financial and other support to orthopaedic surgeons to attend educational events if such support is modest, limited to expenses that are strictly necessary, has significant educational value, improves patient care and is able to withstand public scrutiny.

The guidelines further state that the orthopaedic surgeon should ensure that any interaction with industry should be critically analyzed, with the physician retaining completely independent decision-making. The orthopaedic surgeon should assume the responsibility to remain objective and make decisions that are based strictly on what is best for the patient. It is important for all orthopaedic surgeons to recognize that a conflict of interest exists whenever one receives a gift from industry, regardless of the size or nature.

The medical profession is unique among other professions in that the majority of those who enter the field do so because of their genuine interest in providing service to others, placing the patients’ concerns ahead of their own. Unfortunately, all medical professionals today are being challenged by increasing costs, decreasing reimbursement, greater restrictions due to managed care influences and growing unfavorable public sentiment.

Although altruism is more common among physicians than among most other professions, there must be an acute awareness of the potential for loss of professionalism and erosion of patient trust in this new era. Orthopaedic surgeons should never lose sight of their primary ethical responsibilities to remain current via continuing education, to provide competent, compassionate patient care and to maintain professionalism and objectivity at all times.

As clearly stated in the AAOS Code of Ethics, the patient is the central focus of all ethical concerns.12


  1. PhRMA Code preamble April 2002.
  2. PhRMA Code paragraph 2.
  3. PhRMA Code paragraph 7.
  4. Daugherty JM, Sweeney HA: Industry Pays the Doctor Bill for Escalating CME Costs. Medical Marketing and Media 35: 88-90, 2000.
  5. Graves, J: Frequent–flyer programs for drug prescribing. New England Journal of Medicine, 1987, 317:252.
  6. Council on Ethical and Judicial Affairs, American Medical Association: Ethical Opinion 8.061 in Code of Medical Ethics, Current Opinions with Annotations, Chicago: Council on Ethical and Judicial Affairs, American Medical Association, 2000.
  7. Office of Inspector General, Prescription Drug Promotion Involving Payments and Gifts: Physicians’ Perspectives, OEI-01-90-00481, 1992.
  8. American Medical Association, Ethical Opinion/Guidelines. E-Addendum II: Council on Ethical and Judicial Affairs, Clarification of "Gifts to Physicians from Industry" Opinion E-8.061, cited in Food and Drug Law Journal, 1992, and reiterated in AMA letter from Herbert Rakatansky, MD, Chair of the AMA Council on Ethical and Judicial Affairs, to members of the AMA House of Delegates, March 8, 2000.
  9. PhRMA Code paragraph 3. b.
  10. PhRMA Code paragraph 4. a.
  11. American Academy of Orthopaedic Surgeons, Opinion on Ethics, Gifts and the Orthopaedic Surgeon’s Relationship with Industry, Chicago, December 2001.
  12. American Academy of Orthopaedic Surgeons, Guide to the Ethical Practice of Orthopaedic Surgery, 3rd Edition, 1998; updated on the AAOS Web site

Jeanne L. DelSignore, MD, is a clinical associate professor of orthopaedic surgery, University of Rochester School of Medicine, and chair of the AAOS Committee on Ethics. She can be reached at (585) 359-1670 or via e-mail at

Richard N. Peterson, JD, MHA is AAOS General Counsel. He can be reached by phone at (847) 384-4048 or via e-mail at

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