Case Study (2): Conflicts of Interests

Ethics & Compliance Magazine | Year 1, 2016, Issue #1 | Author(s): Mihai G. Popa (Bayer, Country Group Romania/Bulgaria/Moldova)

These days, the Healthcare domain represents one of the most dynamic areas of the modern industries, based on the need generated by the society and of course by the continuous scientific development. The manufacturers activating in this sector are the main producers of medicines and medical devices. Their activities are mainly focused on the research zone, clinical trials, promotion and selling of the healthcare products. Any new medical product needs to be presented to the healthcare community in order to familiarize the healthcare professionals with the novelties brought in the therapeutic area and their proper use.

The company Health MD LTD. – one of the greatest medical devices manufacturer worldwide with its headquarter in Atlanta (U.S.) – set up, a couple years ago, a legal entity in Romania, at Bucharest. The demand for their products is very high due also to the fact they introduced a very modern high technology in diagnosing the rare diseases because this healthcare company holds one of the most research center in the U.S.A. When Health MD entered the Romanian market, it succeeded in hiring some of the best medical specialists and regulatory personnel. One of the very good specialists is the Medical Director who is analyzing the necessary materials related to the products to be launched, but also the corporate compliance rules of the company to be followed by the employees in performing the activities. One special area where the Medical Director is involved represents the interaction of his colleagues with the healthcare professionals. In this field, the Medical Director has to assess, according to the compliance rules of the company, the possibility that – by request – a certain healthcare professional could be sponsored in order to participate in scientific events with the goal of familiarizing with a specific new medicine or medical device in his area of medical/scientific activity.

That being said, after the launching of a new medical device in Romania, the Medical Director from Health MD LTD. has been contacted for a discussion by a former colleague from the Faculty of Medicine, a physician to one hospital from Bucharest. The reason of the discussion was the new idea of the former colleague, now a health professional, of starting together a small business in medical devices field. The healthcare professional found out about the activity of the Medical Director from another common colleague from the Faculty of Medicine who was physician in the same hospital and had some discussions in the past with the Medical Director at some scientific events where his company participated.

 

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The Healthcare professional invited the Medical Director to a business lunch and proposed to him during the discussion to start a business together in order to import medical devices and to sell them at a lower price on the Romanian market taking into consideration their expertise and some very good relations in the healthcare system.

The Medical Director explained that he cannot renounce his present position within Health MD LTD., but the healthcare professional proposed that both of them keep their positions in the current organizations and additionally perform these activities outside of employment.

After several months, they set up a small company having as object of the activity the commercialization of medical devices on the Romanian market. To sustain their project, these two specialists put together their knowledge from the field where they were activating. The healthcare professio nal offered his input related to the demand and scientific criteria relating the acquisition of medical devices from the hospital activity perspective and, at the same time, the
Medical Director used the information obtained during his activity in the medical device industry, especially in the present position within Health MD LTD. The Medical Director, in his effort to acquire relevant data from the market, started to consult sales documents and to approach colleagues from relevant departments of the company. The new business initiated by the two former colleagues succeeded, in almost one year from the moment of the set-up, to acquire an important share in the relevant business. The most part of the imports of the products were performed from the Asian market and, based on the price advantage generated by the minimum costs of acquisition, this constituted a real lead in comparison with other companies.

The implication of the Medical Director in the activities of the new company became very intensive and the transfer of the knowledge from the main position to the new business needs increased with time passing. Notwithstanding the Medical Director of Health MD LTD. decided to accept starting his own business without communicating it to his employer.

 

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Due to the very strong cooperation that the two former colleagues initiated through their own company in commercialization the medical devices on the Romanian market, they started to talk very often about the interaction of healthcare professionals with the healthcare producers in the perspective of participating to the scientific events. The physician from the Bucharest hospital used to participate in the past as invitee to numerous medical scientific events especially abroad, but in last period the number of requests for him to such scientific activities decreased dramatically due to the new ethics rules in the healthcare sector.

The Medical Director promised then he will involve himself in analyzing the activities of his employer company in the field of scientific events in order to find out which would be of interest for his business partner – the physician. The latter invited the Medical Director for a discussion at his office in the hospital where they had the occasion to discuss also with other healthcare professionals who described their cooperation with the healthcare producers taking into consideration their medical specialties. Based on the information exchanged within these meetings, the Medical Director started to search the panel of the activities in this area sponsored by Health MD LTD. which could fit with the scientific activity of the physician.

Even if the Medical Director didn’t find any relevant element for inviting the physician to a scientific event to be sponsored by the company, he obtained the approval of the company’s management for organizing a visit with his business partner to the headquarters in Atlanta under the pretext that this will facilitate a better understanding of the physician on operating the medical devices. This visit was approved and carried out although the Medical Director knew the fact that his business partner does not operate on the medical devices produced by Health MD Company.

After some months from the visit to the headquarters of the company, the physician asked the Medical Director for another favor. This time he asked to obtain an invitation to a congress in Barcelona where some former colleagues from his previous workplace were about to go.

The Medical Director performed the evaluation with the purpose to check if the physician is eligible for an invitation to such an event. But he concluded that the presence of the physician in the Barcelona event cannot be objectively justified.

Thus, he couldn’t demonstrate that there is a relevant interest in the participation of the physician to this scientific event because there was no element to sustain that the participation is consistent with his area of medical expertise or areas of research.

He couldn’t at least determine that the physician medical expertise and experience is in the particular medical field covered by the event or the possible cooperation with the physician for future scientific projects with Health MD LTD.

Despite the non-fulfillment of the procedural requirements, the Medical Director decided nevertheless to approve the sponsorship for the physician to attend the scientific event held in Barcelona. The physician obtained with this occasion the sponsorship covering the cost of the transportation from Bucharest to Barcelona and return and the accommodation at the hotel where the event was organized as well as the participation fee for the congress. Also in this case, the company
management was not correctly informed about the way the selection criteria were applied when proposing the physician for participating to the scientific event.

In this case, the contractual relationship with the physician was not based on objective criteria such as medical expertise, experience in that particular conference medical field and the possibility to open cooperation with the physician for future scientific projects. Also in this case, any contractual relationship had to be disclosed to the management company and the conclusion, execution, continuation of this sponsorship contract was influenced by the personal relationship and personal interests between the Medical Director and the respective physician.

The behavior of the Medical Director in relation to the requests received from his former colleague literally raised the issue where on one hand needed to deal with the private interest of the physician (former University colleague and business partner in present) and on the other hand with the interests of the company.

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