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When Is A Royalty Agreement With A Healthcare Professional Appropriate | DPS News

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Sunday June 20, 2021 Salt Lake City, UT

When Is A Royalty Agreement With A Healthcare Professional Appropriate

Thursday April 15, 2021

The U.S. Attorney`s Office carefully reviews payments to physicians and surgeons working under consulting agreements. For example, under the 2007 NPA, compliance measures only allow the company to pay the consultants of a product development team for real time spent on service delivery, but at fair market value. Royalties can also be paid to an advisor to a product development team for each product developed by the team. Hourly rates and royalties are the only forms of compensation an advisor can obtain to participate in a product design team. The company is not allowed to make lump sum payments or guaranteed minimum payments instead of or in addition to hourly payments and royalties. The cost of defending an investigation initiated by the government as part of the anti-kickback status can be extremely high. The combination of legal fees, the disconnection effect on staff productivity and distraction from the company`s business objectives alone may make a poorly structured consulting agreement appear to be a reckless investment. However, if criminal, civil and administrative sanctions are added, costs may soon increase geometrically. During each meeting with a consultant, the company can bring a modest meal or refreshment, as described elsewhere in the revised code, to the equipment.

However, the revised code prohibits any entertainment or rest at such meetings. [xxiii] Modest Meals related to professional health care professional interactions Compliance measures within the AFN and data protection authorities clearly show that companies need to do more than just keep advice agreements in writing. Payments to a doctor cannot be linked to the efforts of the tradesman in the promotion of a medical device. Compliance with this measure can be difficult and non-compliance is possible if a medical device company pays a fee to a health professional on the basis of the sale of devices invented by the medical expert. The importance of collecting and maintaining this documentation on consulting services should not be underestimated. These documents will be proof that the company can show the government that it is defending the legitimacy of the agreement. If these documents are properly presented and retained, as proposed here, they are tried in the event of further litigation by the government. The agreement should be written down and describe the services to be provided. The revised code explains that clinical research agreements should also be governed by a written research protocol. The federal anti-kickback law raises a vast network that applies to many types of payment agreements between medical device companies and health care professionals. Nevertheless, there are a number of “safe havens” that exempt certain payment arrangements from criminal sanctions.

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