In a medical-education ruling expected to have broad consequences, regulators said they will consider advertising agencies and journal publishers as commercial entities, requiring those that own CME units to spin them off as separate companies, and providing an extra layer of independence to firewalls that may already exist between the two.
Medical education and communication companies (MECCs) could be especially hard hit by the policy, having to shoulder burdensome costs and deal with new tax and legal issues.
“Many, many MECCs would fall into the category covered by this policy,” said Karen Overstreet, president, North American Association of Medical Education and Communication Companies (NAAMECC). “We would have to set up new companies. This is going to be an expensive and time-consuming endeavor that perhaps isn’t necessary.”
The controversial rule, part of a set of policy changes issued last month, was created when the board of the Accreditation Council for CME (ACCME) amended a definition in its bylaws for what constitutes a “commercial interest,” a term that previously included only FDA-regulated entities.
By slapping the label on ad agencies and publishers, too, the ACCME sent for-profit medical education firms scrambling to determine whether they need to undergo a whole new round of restructuring. The rule is expected to impact the CME divisions of ad firms that are linked into large holding companies, as well as some journal publishers, depending on the individual company’s corporate structure and the types of services that that company provides.
Although many of these firms have erected firewalls between sister companies, some may feel they are working in a gray area. Their status became somewhat more defined after an e-mail to MM&M, in which Murray Kopelow, MD, ACCME chief executive, elaborated on the final version of the policy.
“ACCME does not intend for this rule to exclude medical education and communication companies (MECCs) from being accredited providers,” he wrote. “ACCME expects that if the ‘ad agency or publishing company’ is an ACCME-defined commercial interest, its owners will set up the two ‘companies’ as two separate and independent companies.”
In April, during a comment stage, advocacy groups like the Coalition for Healthcare Communication exerted a major push for the ACCME to explain its intent around this point, specifically whether the term “marketing” as used in the ACCME’s new definition extends beyond drug, device and biotech companies to other organizations. Kopelow’s response appears to settle the debate.
“We have some clarity,” said John Kamp, JD, PhD, executive director of the coalition. “Commercial interest’ is more than just an FDA-regulated entity.” It includes for-profit CME providers owned by or having a promotional or publishing arm.
Still, that raises new questions.
One is whether the change is really needed. The Office of Inspector General forced drug firms, and by extension CME providers, to separate in 2003. It goes back even further than that, said Kamp.
“With respect to firewalls, companies have spent the last 10 years working it out. The 1997 guidelines of the FDA…laid out in clear detail the ideas of independence of content.”
He added, “I think everyone would rather not reorganize again under new ACCME principles, because virtually every accredited provider has done so in order to meet FDA and HHS [attorney general] guidelines.”
To NAAMECC, which had also called for more clarity around the issue in April, Dr. Kopelow’s explanation came as cold comfort.
“The response is very clear, but it’s overly restrictive, and I think some of these requirements are unnecessary,” Overstreet said. “The firewalls many MECCs have in place include separate staff, incorporating as separate businesses, separate locations. They have processes and systems to ensure independence already.”
Another uncertainty involves the details of these special corporate structures. According to Kopelow’s explanation, MECCs, agencies and publishers would have to create a new holding company to own their educational partner or accredited provider. He laid out the criteria for these “sister” firms to maintain independence:
• not owned or controlled by a commercial interest
• separate management
• employer of record is not a commercial interest
• separate governance where the majority cannot represent a commercial interest
• receives funds from a commercial interest only as commercial support.
The executive director said he wants providers to submit their restructuring plans in writing before they are implemented to [email protected]g. The rule is scheduled to take effect in August 2008.
Kamp, a practicing lawyer for Wiley Rein & Fielding LLP, said the criteria need to be fleshed out. “I hope [Kopelow] sets out some more basic principles, so people can have pretty good idea before they make a submission.”
Also puzzling to some is why the rule, which acknowledges conflicts of interest among MECCs, does not extend the same strictures to institutional entities, like academic medical centers, physician groups, insurers and non profits. While these groups have conflicts in handling educational grants, they are exempted from the new policy.
“It amazes me that in the summer of [Michael Moore documentary] Sicko that insurance companies continue to get this broad exemption,” said one provider who wished to remain anonymous.
Overstreet theorized that ACCME’s policy shift seems like “an overreaction to what’s going on in the regulatory environment” and she wants to see “evidence that what we are currently doing is not working.”
The timing of the rule, which comes four months after the Senate Finance Committee released a report of its investigation of CME grants, lends credence to her point. However, the policy changes by the ACCME did not pertain to the concerns raised in the report—namely, the need to tighten up the tracking of providers and enforcement of ACCME’s Standards for Commercial Support.
The ACCME board is scheduled to meet again in November, at which time it could refine the policy further, as well as hone its response to the Senate findings.
To be sure, the ACCME’s added focus on corporate structure will make things more complicated for providers. Just how much is unknown.
“It’s not going to be impossible, but it will be difficult and costly for many companies,” said Kamp.