The future of direct sponsorship

August 3, 2015

The most recent high-profile case of a company’s direct sponsorship practices being heavily scrutinised is that of GlaxoSmithKline (GSK). The British pharmaceutical multinational was accused of misconduct in China because it allegedly bribed doctors to favour its drugs over those of its competitors. It was subsequently fined almost US$500 million.

The case seemed to signal the end of the road for direct sponsorship, with MedTech Europe, and alliance of European medical technology associations, aiming to phase it out by January 2018.

The practice of direct sponsorship is when a company pays a doctor in cash or expenses to, among other things, attend conferences, take part in research, or speak at events on behalf of the company. The investment is aimed at encouraging the doctor to use or promote the company’s products.

According to an article by Philosophy, Ethics, and Humanities in Medicine, entitled ‘Ethical pharmaceutical promotion and communications worldwide’, ‘Promotional information, as some regulators and codes have defined, encompasses advertising and sales material related to particular products, and may be distributed to patients through advertising campaigns or to healthcare professionals by pharmaceutical representatives.’

In many cases, the use of healthcare professionals (HCPs) has led to conflicts of interest, with doctors encouraging the use of drugs produced by their sponsors rather than those that might be in the best interests of the patients. This is the primary reason cited by MedTech for phasing out direct sponsorship.

But MedTech is by no means the only organisation to limit direct sponsorship. Many countries and organisations around the world limit advertising by pharmaceutical companies. For example, the United States Pharmaceutical Research and Manufacturers of America Code prohibits the direct sponsorship of attendance at scientific meetings (except for medical students). And organisations in countries such as France require an independent review of arrangements before they can go ahead.

Meanwhile, in China, new regulations have been put in place to monitor drug trials. Hospitals in China will now be required to establish a set of standardised rules for procedures associated with clinical studies, and to centralise the financing of studies. Companies will no longer be able to pay funds to specific departments; instead the funding will be paid to hospitals. The regulations are very clear that sponsors cannot cover participants’ expenses and then charge a hospital for those fees.

Hospitals must also approve clinical trials before they proceed. The physician in charge must provide comprehensive information about the trial and, once the study has begun, the hospital must maintain supervision throughout the process.
Some commentators have argued that it should not be the responsibility of the pharmaceutical firms to educate HCPs because they may have their own agenda. Instead, the information should be provided by a neutral organisation such as the European Medicines Agency.

In a paper by Health Action International (HAI) Europe, entitled, ‘The patient and consumer voice and pharmaceutical industry sponsorship’, one organisation said, ‘Some individual patients can be quite vulnerable and easily influenced because of their disease. Any information should be disconnected from commercial aspects.’ It would however be time consuming and costly for an independent firm to collect and distribute all of the information that private companies have at their fingertips.

Strict criteria

Direct sponsorship is for some the only way that doctors can effectively access training and new drugs in the event that they are unable to source funding from elsewhere. According to the Philosophy, Ethics, and Humanities in Medicine article, ‘ceasing sponsorship could deny healthcare professionals without access to sufficient funding the opportunity to hear and interact with world leaders in their chosen field’.

As a result, direct sponsorship will not be banned outright by MedTech given that the industry retains a responsibility to continue to educate HCPs on the use of products and procedures. Instead, the industry will persevere with directly sponsoring HCPs so long as the practice is in line with very specific and strict criteria.

On this, the MedTech Code of Ethics says, ‘The members shall not directly or indirectly offer, provide or approve the use of funds or other articles of material nature in order to unlawfully: a) influence the judgment or actions of any individual, customer or company; b) acquire or maintain business; c) influence any negotiations, decisions by government officials; and d) obtain any advantage. This requirement applies not only to direct payments of such nature but also to indirect payments, made by any member through agents, consultants or third parties. The members should devote special attention to laws and notices prohibiting bribes to physicians or other persons who make decisions on the use of medical devices.’

The Code adds that, during sales and promotion meetings, companies may pay for travel, accommodation and refreshment where appropriate. However, it says that these kinds of meetings should generally be organised close to HCPs’ place of work, and companies cannot reimburse travel expenses, meals and refreshments unless there is a direct professional involvement and an interest in information.

During training and education, members of Medtech, ‘may compensate the programme participants for any travel costs, or accommodation in reasonable amount, and in accordance with valid legal regulations. Nevertheless, the members may not refund any travel expenses or costs to partners or guests of the medical staff or to any other personnel without direct professional interest in information presented in the course of the programme’.


Policy and Medicine points out that, as MedTech limits sponsorship, it will be interesting to see if non-member countries follow suit or continue with direct sponsoring, and how this will affect the industry in Europe. Should non-member countries not amend the practice, the practice of direct sponsorship is likely to become even more controversial.

As direct sponsorship becomes an increasingly complicated and risky practice, HCPs are encouraged to ensure that their knowledge of the relevant laws remains up to date.

Previous Article
HCP sponsorship debate dominates GMTCC2015
HCP sponsorship debate dominates GMTCC2015

Eucomed Compliance Panel Chair John McLoughlin was the first recipient of a PwC Compliance Achievement Awar...

Next Article
Whistleblower corporate backlash has no place in a world of compliance
Whistleblower corporate backlash has no place in a world of compliance

When Countrywide Financial’s Michael Winston reported his employer for selling subprime mortgages in Februa...

Looking to build a perfect due diligence programme for your business?

Contact us