Developments and outlook re anti-kickback and corruption in the Dutch devices sector

Although no significant things happened in business compliance developments on a EU level for some time since Eucomed asked itself about guidance for sponsorship of conferences, things are very much in flux in the Netherlands. That may not be very exciting for many of our readers because the Netherlands is not such a big market and because they don’t read Dutch anyway, but for those who do and/or have activities in the Netherlands this should be interesting. Don’t forget, what your Dutch colleagues are doing could for example lead to Anti-Bribery Act prosecution in the UK, or get your company stuck with a big fine and a deferred prosecution agreement in the US under the FCPA. Even if your company is not doing anything wrong presently, the issue may pop up if you unsuspectingly acquire a company active in the Dutch medical devices market.

There is a great political push to provide for regulation with respect to business compliance in the medical devices sector, since the broadcast of an investigative reporting programme Reporter earlier this year. The government had already started to commission reports to do a quantitative analysis of possible business compliance issues in the Dutch medical devices industry, but this did not yield any evidence of kickbacks and other influencing of the medical profession by the medical devices industry. The Reporter program did not provide any evidence in that respect either, except suggest that any consultancy contract between a physician and a medical devices manufacturer would corrupt that physician. It also showed that orthopedic surgeons have a staggering lack of knowledge about medical devices legislation, which seems prevalent in the clinical profession. Anyway, the responsible minister felt obliged to do something and decided that she would impose a carbon copy of the CGR code system for medicinal products that works to satisfaction in the Netherlands. The branch associations of the Dutch devices industry were called upon to make this happen before 1 January 2012, or suffer the consequences.

And so they did, despite the fragmentation and number of branch associations active in such a small market (six) with links to different European associations such as Eucomed and COCIR (at least three). It resulted in a self-regulatory code that borrows heavily from the Eucomed code, but does conflict with it at some points. It also envisages setting up a similar dispute resolution system, which is more or less ready in the mean time but has not been made public.

I had the pleasure and honor of presenting the code to the members of FHI Medische Hulpmiddelen, one of the branch associations, on 16 November 2011. You can download my presentation here. As observed, those companies that already implement Eucomed will not find these rules shocking or impossible. What is different is that the code contains some – in my view – completely superfluous rules about advertising that moreover are not consistent with the legal requirements already in place for medical devices advertising in the Netherlands. I won’t go into a lot of detail here on the exact content of all the rules, as this is already in the presentation.

Just remember that on the demand side everybody that has something to do with the purchase decision is included in the concept of HCP, so also staff of the purchasing department or technical staff deciding on specs. On the supply side not only manufacturers are subject to the rules, but all resellers in the entire supply chain of the manufacturer. This is something that will take some time to settle in and may lead to misunderstandings, is my expectation.

What did become clear is that there is a lot of work to do in business compliance on the demand side – at the healthcare professionals. What you may not offer may not be requested, you might say. This is where the government still has some nuts to crack: although the minister has promised the industry that she will make the clinical profession comply with the code as well, these promises come back watered down significantly in a recent written deliberations containing answers to questions in parliament, published on 7 December 2011. The document merely mentions that there is ‘active attention’ for getting the clinical side to accept to be bound by the same rules, without any actually SMART statement how this would be accomplished. Physicians in the Netherlands are of course already bound by their own code.

Even more interesting is the next step: full transparency of relations between industry and healthcare professionals for the medical devices sector. The pharmaceutical sector will start with this in the Netherlands per 1 January 2012 and the medical devices sector is already subject to it in the US under the Sunshine Act. Before long the devices sector will have their own Sunshine Code in the Netherlands too, as some of my more compliant clients already predicted beginning of this year, as the Minister clearly hinted in her letter to Parliament of 24 November 2011. She does not mention any specific date for it, but it is clear that the devices industry is expected to get to work on this. There is of course nothing to stop companies from starting with this already. A client recently informed me they would start since they needed to do it in the US anyway.

So, interesting times ahead for the devices industry in the Netherlands. As I have argued in the past when discussing “business compliance reloaded”: compliance is an opportunity, a tool to out-comply and thus out-compete your competitors.

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