NEW YORK, June 29, 2009 (GLOBE NEWSWIRE) -- The medical device industry has been quick to adopt, implement, and give further definition to the Advanced Medical Technology Association (AdvaMed) Code of Ethics and its provisions, according to a survey released today by PricewaterhouseCoopers LLP in consultation with AdvaMed and its Device and Diagnostic Compliance Group (DDCG) working group. According to the survey, 90 percent of respondents, representing 32 companies, have policies in place that address all provisions of the AdvaMed Code of Ethics
Conducted for three consecutive years, the 2008/09 survey reports the AdvaMed Code of Ethics continues to gain notable acceptance within the medical device industry. AdvaMed, the largest medical technology association in the world, developed the Code to assure a high standard of ethical conduct by the medical technology industry. A major update to the Code was unanimously approved by the AdvaMed Board of Directors in December 2008 and goes into effect on July 1, 2009.
The 2008/09 survey, which built upon prior efforts over the last three years, included an electronic survey, follow-up interviews, and webcast polling on topics such as policies and procedures, auditing and monitoring, fair market value, and sales compensation. Highlights of the survey include:
* Ninety percent of respondents have policies in place that address all provisions of the current AdvaMed Code of Ethics. * Thirty-eight percent of respondents apply the Code globally, with revisions for legal and cultural differences based upon geography, while 43 percent apply the Code to U.S. operations only with international having its own policies. * Ninety-four percent plan to implement new policies and procedures to reflect the changes of the new 2009 AdvaMed Code of Ethics being implemented on July 1, 2009.
Respondents also reported the endorsement of ethics and compliance programs and the AdvaMed Code by company leaders has grown and continues to grow. Specifically:
* Three-fourths of respondents indicated the chief executive officer shows robust support for the AdvaMed Code, or its corresponding company policies, by participating in various company activities, such as making statements to employees at live meetings, written statements in a letter to employees and periodic written statements in an email. * Sixty-three percent of respondents require that acquired companies comply with corporate-level compliance policies within 90 days of the acquisition, and 25 percent of those require the acquired company to comply immediately. * More than three-fourths (78%) of respondents indicated that the board, or a board committee, has oversight responsibility for compliance, and 65 percent have written policies/procedures or an established practice for notifying the board of compliance-related investigations or issues.
"The medical device industry has made great strides in the past several years since the AdvaMed Code of Ethics was substantially revised in 2004," said Doug Mowen, advisory leader of the medical device industry practice at PricewaterhouseCoopers. "They have made a clear commitment to ethical business practices through adoption of the Code, putting openness and transparency on their relationships with healthcare providers at the forefront. Ultimately, this benefits patients by removing any perceived bias, thus increasing the quality of care."
Companies continue to consider compliance issues in sales and marketing compensation planning. More than half of respondents stated that compliance with existing policies and procedures is a factor in determining annual performance reviews for both sales representatives (56%) and marketing personnel (59%). However, better practices are still needed with regard to this area. Other areas where respondents cited challenges include:
* When asked about the reaction of their customers, 44 percent of survey respondents said customers reacted with "partial acceptance" to the AdvaMed Code of Ethics, while another 19 percent of respondents noted there was "some resistance." However, only three percent noted there was "substantial resistance" from their customers. * Despite the hesitation from customers, three-fourths of respondents stated that customers of medical device companies within the industry comply with the AdvaMed Code of Ethics "fairly well," while 13 percent comply "well" and only nine percent comply "not at all." * Companies are still finding key performance indicators (KPIs) a challenge to track and measure the effectiveness of their compliance programs. In the most recent two surveys, a majority of companies indicated they had few or no formal KPIs.
A full copy of the report is available for download at www.pwc.com/medicaldevice.
About the Survey
The survey was conducted by PricewaterhouseCoopers LLP and in consultation with AdvaMed and its Device and Diagnostics Compliance Group (DDCG) Working Group. Thirty-two companies participated in the electronic survey conducted in Spring of 2008, more than half of which had gross sales in excess of $1 billion in 2007. Follow-up interviews were conducted in Fall of 2008 to seek out additional information on key compliance topics and obtain more information about compliance practices and challenges. Supplemental information was captured via webcast polling in Spring of 2009 to help identify specific answers on key compliance points. All data was aggregated to protect confidentiality. This survey and its supplemental components build on the efforts of other PwC surveys completed over the past three years for the Medical Device and Diagnostic Industry.
About PricewaterhouseCoopers Pharmaceutical and Life Sciences Industry Group
PricewaterhouseCoopers Pharmaceutical and Life Sciences Industry Group (www.pwc.com/pharma) provides clients with audit, tax and advisory services. The firm has extensive experience in delivering solutions on a wide range of strategic, financial and operational issues. The Pharmaceutical and Life Sciences Industry Group is part of PricewaterhouseCoopers' larger initiative for the health-related industries that brings together expertise and allows collaboration across all sectors in the health continuum.
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