Upload
samson-mills
View
218
Download
0
Tags:
Embed Size (px)
Citation preview
MassMEDIC
February 26, 2010
Licensing and
Compliance
Presenter
David L. Cavanaugh 60 State StreetBoston, MA 02109
1875 Pennsylvania Avenue, NWWashington, DC 20006
WilmerHale 2
Health Care Provider (HCP) Relationship
Increasing attention to HCP Relationship with Companies
Contact Points:
Marketing
Product Development
Product Evaluation
Training
Focus on Licensing/Consulting Aspect Today
WilmerHale 3
Objectives Background of increased focus on HCP
relationship
Apply focus to licensing
Describe recent enforcement activity regarding licensing
Review model of determining Fair Market Value for contributions
Outline implementation of Royalty Review Committee
WilmerHale 4
HCP- Spectrum of Contributions
Fair Compensation for
Contributions to
Developing
New Medical Devices
FinancialInducements to use Company Products
How to Determine?
WilmerHale 5
HCP- Enforcement
Enforcement of existing laws-
2006 - Large medical device company agreed
to pay $40M to settle allegations that it offered “kickbacks” to HCP’s
Included in “kickbacks” was consulting and royalty agreements for which little or no work was done
WilmerHale 6
HCP- Enforcement Enforcement of existing laws- 2007-
Spinal cord stimulation company paid $3M to settle allegations of improper payment
Company paid $5k for each 5 new patients tested
– Limited clinical benefit– The data collection fee was not set through
“fair market value” assessment– The company didn’t use the data
There were also “resort” trips where much of the time was spend on recreational activities
WilmerHale 7
HCP- Enforcement Enforcement of Existing laws-
2007- Enforcement in hip and knee replacement market Companies pursued comprise 95% of market Settlement total of $311M Initiate compliance programs Ongoing review of program activities
Enforcement is real, costly, and targeted toward abuses of the HCP/Company relationship
WilmerHale 8
HCP- Consulting and Licensing
Umbrella Concept- Fair market value (FMV) for contributions
We know the marginsNo work consulting arrangement problemHCP innovation (patented?) contribution not a
problem
Challenge- How to navigate the middle
WilmerHale 9
HCP- Contributions
Patented Idea Patent Pending
Idea Idea with no patent
application Early concept not
yet ready for patenting
Unpatentable idea
Summary of Potential Contributions Trade Secret Manufacturing
Suggestion Usage evaluation
Prototype evaluation Market needs
assessment Non specific consulting
WilmerHale 10
Overview Compensation Framework Framework
Assists with assessing intellectual property
and assigning the appropriate fair market
value for the contribution Outlines the various types of intellectual
property that may be addressed by RRC. Defines a range of fair market compensation
that is capped on both an individual basis
and design team basis.
WilmerHale 11
Overview Compensation Framework
Framework Should address most of the situations that will be
encountered The fair market compensation rates should be a
reasonable range
WilmerHale 12
The Intellectual Property Continuum
Patentable Invention Trade Secret Know-How Fee-for-Service
High Value Medium Value Lower Value
IP is Innovative IP is Contributory Consultative Information
Fair Market Compensation Range
Intellectual Property (“IP”) can be valued on a broad continuum for
Medical Device Companies. Patentable Invention - where a patent application has already been filed or can
be filed. Typically the most valuable form of IP.
Trade Secret or “Know how” where specific information is being purchased by
the Company to either develop or enhance a product or technique.
Consultation - generally compensated on a fee-for-service basis for the time
provided by the consultant
WilmerHale 13
Implementation of Royalty Policy
Process for implementation
• Define purpose
• Determine participation
• Identify scope of activity
• Develop charter/policy document
• Adhere to determined Charter
WilmerHale 14
Implementation of Royalty Policy
Define Purpose
• Work with Compliance Officer
• Be explicit
• Bring others onto project
• Help others to see objective
WilmerHale 15
Implementation of Royalty Policy
Determine Participation:
• Legal represented
• R&D participation
• CFO/Controller
• Clinical and Regulatory Affairs
WilmerHale 16
Implementation of Royalty Policy
Identify Scope of Activity
• Review the HCP Consultant qualifications of design team
• Establish Fair Market Value royalty percentage
• Evaluate whether HCP Consultant met established criteria
• Evaluate Contributions for innovation and significant
WilmerHale 17
Implementation of Royalty Policy
Develop charter/policy document
• Purpose
• Responsibilities
•Composition
• Protocol
• Evaluation
• Role functions
WilmerHale 18
Licensing and Compliance
Summary
• HCP- Enforcement
• Compensation Framework
• Implementation of Royalty Policy