Testimony before the Senate Special Committee on Aging
United States Senate
Commercial Sponsorship of
Continuing Medical Education
Testimony of Lewis Morris 
Chief Counsel
Office of Inspector General
  Department of Health and
Human Services
July 29, 2009
2:00 p.m.
562 Dirksen Senate Office Building   
Daniel R. Levinson, Inspector General
Department of Health and Human Services
       
 Statement of Lewis Morris 
Chief Counsel 
Office of Inspector General 
Department of Health and Human Services 
 
July 29, 2009 
Before the Senate Special Committee on Aging 
 
 
On behalf of Inspector General Levinson and the Office of Inspector General (OIG) for 
the U.S. Department of Health and Human Services (HHS), I thank you for the 
opportunity to discuss commercial sponsorship of continuing medical education (CME).  
Physicians must keep abreast of advances in medicine, and access to objective, unbiased 
CME is essential to the quality of medicine practiced in this country.  However, the 
integrity of medical practice and the quality of patient care may be compromised if biased 
or inaccurate CME influences the physicians clinical practice, including the prescription 
of drugs, biologics, and medical devices.  Preserving the independence and integrity of 
continuing medical education requires enhanced safeguards to preserve the boundaries 
separating education from marketing. 
 
Background 
Graduation from medical school and completion of residency training are the first steps in 
a career-long educational process for physicians.  To take advantage of the growing array 
of diagnostic and treatment options, physicians must continually update their technical 
knowledge and practice skills.  CME is a mainstay for such learning.  Most State licensing 
authorities require physicians to complete a certain number of hours of accredited CME 
within prescribed timeframes to maintain their medical licenses.  Hospitals and other 
institutions may impose additional CME requirements upon physicians who practice at 
their facilities.   
 
Although some physicians pay the full expense of this additional education, more often 
the programs are either fully or partially subsidized by sponsors that provide educational 
grants and other funding to CME providers.  Frequently, these sponsors are manufacturers 
of drugs, biologics, or medical devices related to the topic of the CME program.  
According to the Accreditation Council for Continuing Medical Education (ACCME), in 
2007, the pharmaceutical industry spent more than a billion dollars to cover more than half 
the costs for CME activities conducted in the United States that year.  Moreover, industry 
funding of accredited CME increased by more than 300 percent between 1998 and 2007. 1  
 
                                                 
1 ACCREDITATION COUNCIL FOR CONTINUING MEDICAL EDUCATION, ACCME ANNUAL REPORT DATA 2007 
(2008).  Available online at http://www.accme.org/dir_docs/doc_upload/207fa8e2-bdbe-47f8-9b65-
52477f9faade_uploaddocument.pdf.  Accessed July 15, 2009. 
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A productive collaboration between medicine and commercial interests can expand 
knowledge, drive innovation, and improve quality of care. However, the relationship also 
contains a potential divergence of interests.  Physicians should make the welfare of the 
patient their first priority and pursue continuing education as a means to assist them to 
provide the best care possible.  However, commercial sponsors, including pharmaceutical 
and medical device companies, strive to increase market share and maximize the 
shareholders return on investment.  Industry-sponsored medical education can be an 
effective means to accomplish those business objectives.   
 
One study of the return on investment for pharmaceutical promotional strategies indicates 
that spending $1 on physician events and meetings, including CME, generated an average 
of $3.56 in increased revenue.2  According to a report by the American Medical 
Association Council on Ethical and Judicial Affairs, industry-supported CME programs 
tend to focus on drug therapies and give more favorable treatment to sponsors products 
than do programs that are not funded by commercial sponsors.3  Given the mixed 
motivations of industry-sponsored education, it is essential that effective safeguards be in 
place to ensure that CME is free from commercial bias.    
 
The Oversight of CME 
ACCME, the principal CME accrediting authority in the United States, plays a pivotal role 
in ensuring the integrity of CME by determining whether providers qualify to offer 
accredited CME programs and by providing ongoing oversight of the CME industry.  
Once a CME provider gains ACCME accreditation, the provider may offer programs as 
accredited CME activities without seeking ACCME review or approval of the topic, 
content, faculty, or format of the individual activity.  Generally, physicians can use only 
accredited CME to satisfy licensure and hospital privileging requirements.  ACCME has 
accredited 736 CME providers, 150 of which are for-profit medical education and 
communication companies (MECCs).4   
 
ACCME allows accredited CME providers to offer CME activities that are directly funded 
by commercial interests in the health care industry.  The Institute of Medicine has reported 
that funding from industry provides almost three-quarters of the total income for MECCs.5  
In its Standards for Commercial Support, ACCME imposes some requirements designed 
                                                 
2 SCOTT NESLIN, ROI ANALYSIS OF PHARMACEUTICAL PROMOTION (RAPP): AN INDEPENDENT STUDY (May 
22, 2001).  Available online at http://www.rxpromoroi.org/rapp/media/slides_speakernotes.pdf.  Accessed 
on July 27, 2009. 
3 AMERICAN MEDICAL ASSOCIATION, COUNCIL ON ETHICAL AND JUDICIAL AFFAIRS, CEJA REPORT 1-A-09 
FINANCIAL RELATIONSHIPS WITH INDUSTRY IN CONTINUING MEDICAL EDUCATION (June 5, 2009).  Available 
online at http://www.cohealthcom.org/content/library/cc/CEJA/CEJA_Recommendation_Jun09.pdf.  
Accessed on July 18, 2009. 
4 ACCREDITATION COUNCIL FOR CONTINUING MEDICAL EDUCATION, ACCME ANNUAL REPORT DATA 2007 
(2008).  Available online at http://www.accme.org/dir_docs/doc_upload/207fa8e2-bdbe-47f8-9b65-
52477f9faade_uploaddocument.pdf.  Accessed July 15, 2009. 
5  INSTITUTE OF MEDICINE.  CONFLICT OF INTEREST IN MEDICAL RESEARCH, EDUCATION, AND PRACTICE 5-
17 (Bernard Lo & Marilyn J. Field eds., Natl Academies Press 2009).  
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to temper the potential influence of the industry sponsor on the content of the CME 
program.  For example, CME content must not promote a specific proprietary interest of a 
commercial interest and decisions regarding identification of CME needs and content must 
be made free of the control of a commercial interest.6  Notwithstanding these standards, 
ACCMEs role in mitigating commercial bias is limited because it does not pre-approve 
CME content and does not routinely monitor CME programs.  Furthermore, oversight is 
complaint-driven and occurs after the fact, and in practice, up to 9 years may elapse 
between the identification of a noncompliant CME activity and ACCMEs revocation of 
that providers accreditation.7   
 
The current environment tolerates industry sponsors preferential funding of programs that 
serve the business needs of the funders.  As the Senate Finance Committee observed in its 
study of industry-sponsored medical education, developing CME curricula biased to favor 
the funders economic interests is a logical outgrowth of CME providers seeking 
commercial financial support.  Industrys influence on CME content can be overt or more 
subtle.  Some manufacturers publicize general topics they are willing to fund and invite 
CME providers to submit grant applications that propose programs in topic areas or 
disease states.  CME providers are aware of the therapeutic areas and product lines of the 
potential industry sponsor.  Many grant applications identify proposed faculty and other 
course details that indicate whether the program will favor the sponsors products.  CME 
providers can easily pitch topics designed to attract commercial sponsors, who in turn 
award grants to programs that complement the manufacturers marketing strategies.8  As a 
result, industry sponsored CME almost exclusively covers topics related to commercial 
products, instead of broader discussions of patient care.9   
 
The Role of Federal Law Enforcement in CME 
Various Federal laws may be implicated by industry sponsorship of CME.  Under the 
provisions of the Federal Food, Drug, and Cosmetic Act (FDCA), a company is prohibited 
from introducing a new drug, biologic, or medical device into interstate commerce unless 
that product and its label have been approved, licensed, or cleared by the Food and Drug 
Administration (FDA).  FDA restricts the promotion of the product to only the approved 
indications and prohibits marketing or promoting an unapproved or so-called off-label 
use.  Although pharmaceutical and device manufacturers may not advertise or promote 
their products for unapproved uses, physicians may prescribe drugs, biologics, and devices 
                                                 
6 ACCREDITATION COUNCIL FOR CONTINUING MEDICAL EDUCATION, ACCME STANDARDS FOR 
COMMERCIAL SUPPORT: STANDARDS TO ENSURE THE INDEPENDENCE OF CME ACTIVITIES (2007).  Available 
online at http://www.accme.org/dir_docs/doc_upload/68b2902a-fb73-44d1-8725-
80a1504e520c_uploaddocument.pdf.  Accessed on July 14, 2009. 
7 STAFF OF S. FINANCE COMM., 110TH CONG., USE OF EDUCATIONAL GRANTS BY PHARMACEUTICAL 
MANUFACTURERS. (Comm. Print 2007).  Available online at 
http://www.senate.gov/~finance/press/Bpress/2007press/prb042507a.pdf.  Accessed on July 27, 2009. 
8 Id. 
9 Harvey P. Katz, Stephen E. Goldfinger, & Suzanne W. Fletcher, Academia-Industry Collaboration in 
Continuing Medical Education: Description of Two Approaches, 22 J. CONTINUING EDUC. HEALTH PROFL 
43-54 (2002). 
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for unapproved uses and manufacturers can reap substantial profits from resulting off-
label sales.  It is not known exactly how much revenue is attributable to off-label uses, but 
at least one researcher has estimated that off-label uses account for about 21 percent of 
prescription drug sales.10  Simply put, increased off-label use of a product benefits its 
manufacturer financially.   
 
Although it is illegal for a manufacturer to promote a product for an off-label use, there is 
no express prohibition against a manufacturer sponsoring a CME program that discusses 
an off-label use of the product.  Thus, a CME forum funded by a pharmaceutical company 
can deliver messages about a drug that the law forbids the drugs manufacturer from 
delivering directly.  When a manufacturer misuses CME for the purpose of off-label 
promotion, the FDCA may be implicated.  A violation of the FDCA is inherently a fact-
based determination, but the greater the manufacturers involvement in the delivery of the 
off-label message, the greater the risk.   
 
A number of recent cases highlight the nexus between industry-sponsored CME and the 
enforcement of FDCA.  In 2004, Pfizer/Warner-Lambert paid $430 million to resolve 
charges relating to the off-label promotion of Neurontin, an anti-seizure drug used by 
epilepsy patients.  The government alleged in part that the company engaged in an illegal 
promotion scheme that corrupted the physician education process by fraudulently 
sponsoring independent medical education events on off-label Neurontin uses with 
extensive input from Warner-Lambert regarding topics, speakers, content, and 
participants.   
 
In 2007, Jazz Pharmaceuticals subsidiary, Orphan Medical Inc., agreed to pay $20 
million to settle charges that it had illegally marketed the prescription drug Xyrem for off-
label uses.  Xyrem, also known as GHB, has been subject to abuse as a recreational drug 
and is classified by the Federal Government as a date rape drug.  The government 
alleged that the company engaged in a scheme to expand the market for Xyrem by 
promoting the drug to physicians for off-label indications.  As part of the scheme, the 
government alleged that the company paid a psychiatrist tens of thousands of dollars for 
speaking engagements that promoted a wide range of off-label indications.  Some of these 
speaking engagements were characterized as independent CME programs, when in fact 
they were promotional events approved by Orphans marketing department.  
 
In both of these cases, the companies entered into corporate integrity agreements (CIA) 
with the OIG as a condition of their continued participation in the Federal health care 
programs. The CIAs require, among other provisions, that the companies implement 
written policies and procedures designed to ensure that the funding of medical educational 
activities, including CME, conform to Federal Government requirements.  Those policies 
must also address the disclosure of financial support of CME and financial relationships 
                                                 
10  David C. Radley, Stan N. Finkelstein & Randall S. Stafford, Off-Label Prescribing Among Office-Based 
Physicians, 166 ARCHIVES OF INTERNAL MED. 1021-1026 (2006). 
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with faculty and speakers and ensure sponsored CME programs are independent and 
balanced.  
 
Other laws may be implicated when commercial sponsors use CME to market drugs or 
devices for which reimbursement is sought from the Federal health care programs.  
Generally, Federal law and regulations governing Medicare and Medicaid do not provide 
for reimbursement for off-label prescriptions where the use is not medically accepted.  The 
False Claims Act (FCA) imposes civil penalties (in the amount of treble damages plus 
$5,500 to $11,000 per claim filed) on any person who knowingly presents, or causes to 
be presented ... a false or fraudulent claim for payment or approval to the United States 
government.11  The FCA may be implicated when a pharmaceutical manufacturer engages 
in a scheme to promote the off-label use of its drugs and the illegal marketing campaign 
results in the submission of claims for payment from Federal health care programs.  In 
addition, the FCA sanctions a conspiracy to submit false claims.12  If a manufacturer and a 
CME provider knowingly collaborate in the promotion of an off-label use, the resulting 
submission of claims for that drug to the Federal health care programs could establish a 
cause of action against both co-conspirators.   
 
Industry-sponsored CME can also implicate the criminal anti-kickback statute.13  In 
general, the anti-kickback statute prohibits the knowing and willful offer or payment of 
anything of value to induce referrals to the Federal health care programs.  Offering doctors 
or others money or other benefits to induce them to change a current prescription to the 
manufacturers product is illegal if the drugs are reimbursable by Federal health care 
programs.  When the reward is a cash payment, the kickback is blatant.  Sometimes, 
however, the kickback is more cleverly disguised.  For example, when a pharmaceutical 
manufacturer rewards a high-prescribing physician by directing a CME provider to pay (or 
overpay) that physician to be CME faculty, that payment may be a kickback.   
 
A number of significant cases have involved allegations that funding for educational 
support was a pretext for the payment of kickbacks.  The following cases are illustrative.  
  
  As part of the illegal promotion of Neurontin, Pfizer/Warner-Lambert allegedly made 
kickbacks to doctors in the form of payments to doctors to author medical journal 
articles that were actually written by a medical marketing firm.  
  In a case against TAP Pharmaceuticals, sales representatives allegedly offered 
kickbacks disguised as educational grants that were intended to be used for 
everything from office Christmas parties to influencing placement on a health plans 
drug formulary.  To settle these and other charges, in 2001 TAP pled guilty to 
criminal charges, paid $875 million in fines and penalties, and entered into a CIA.  
                                                 
11 31 U.S.C.  3729. 
12 31 U.S.C.  3729(a)(3). 
13 42 U.S.C.  1320a-7b(b). 
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  In 2006, Medtronic paid $40 million and entered into a CIA to settle a range of 
allegations that it illegally paid physicians to promote and use its spinal devices.  The 
improper payments allegedly included free travel and lodging of physicians and their 
families at lavish locations, such as Hawaii, Cancun, and Malaysia, for discussion 
groups of no or limited substance.  
 
Preserving the Integrity of Continuing Medical Education 
In light of the risks posed by commercial sponsorship of medical education, the question 
becomes how best to ensure that CME serves a bona fide educational purpose, the 
programs are not co-opted as marketing tools, and industry support does not conflict with 
relevant Federal law.  The surest way to eliminate commercial bias in CME is to eliminate 
industry sponsorship by funders who have a significant financial interest in physicians 
clinical decisions.  As the American Medical Associations Council on Ethical and 
Judicial Affairs recently concluded, it is ethically preferable that CME providers accept 
funds only from sources that have no direct financial interest in a physicians clinical 
recommendations....14  Commercial interests can deliver promotional messages to 
physicians through advertising and marketing.   
 
Eliminating industry sponsorship is appealing for its purity and simplicity.  However, 
CME providers would need to identify alternative sources of funds to maintain the 
availability of CME.  In the interim, the following approaches would allow continued 
access to industry funding for CME, but limit industrys ability to influence how that 
money is used and what messages physicians receive. 
 
In our Compliance Program Guidance for Pharmaceutical Manufacturers (CPG)15, we 
recommended that pharmaceutical manufacturers should take steps to ensure that neither 
they, nor their representatives, are using CME to channel improper remuneration to 
physicians or others in a position to generate business for the manufacturer or to influence 
or control the content of the program.  OIG identified several measures that manufacturers 
can take to enhance the integrity of industry-sponsored educational grants.   Comparable 
safeguards would also promote the integrity of grants to CME providers.   
 
We suggest that companies:  
  
(1) Separate grant making functions from sales and marketing.  Effective separation of 
these functions helps insure that grant funding is not influenced by sales or marketing 
motivations and that the grant is for legitimate educational purposes.  
 
                                                 
14 AMERICAN MEDICAL ASSOCIATION, COUNCIL ON ETHICAL AND JUDICIAL AFFAIRS, CEJA REPORT 1-A-09 
FINANCIAL RELATIONSHIPS WITH INDUSTRY IN CONTINUING MEDICAL EDUCATION (June 5, 2009).  Available 
online at http://www.cohealthcom.org/content/library/cc/CEJA/CEJA_Recommendation_Jun09.pdf.  
Accessed on July 18, 2009. 
15 OIG Compliance Program Guidance for Pharmaceutical Manufacturers, 68 Fed. Reg. 23731 (May 5, 
2003).  
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(2) Establish objective criteria for making educational grants to the CME provider.  This 
also would help ensure that funded activities are for legitimate educational programs.    
 
(3) Eliminate any control over the speakers or content of the educational activity.  This 
would help reduce the risk that the payment is for the speakers referrals or to promote 
off-label uses.  
 
When OIG issued the CPG in 2003, several pharmaceutical companies asserted that our 
suggestions were impractical and it would be difficult to separate educational grants from 
sales and marketing.  However, since that time, we have been pleased to hear that many 
companies have adopted some of our recommendations.  In addition, the Pharmaceutical 
Research and Manufacturers of America (PhRMA) recently updated its voluntary Code 
on Interactions with Healthcare Professionals to address industry support for CME.16 
Among its recommendations are the separation of CME grant-making functions for sales 
and marketing departments, the adoption of objective criteria for making grants, and 
adherence to the ACCME standards for commercial support.  The Advanced Medical 
Technology Association (AdvaMed) has also recently updated its code of ethics.  In 
contrast to the PhRMA code and OIGs CPG, the AdvaMed code provides that sales 
personnel may provide input about the suitability of a grant or donation recipient or 
program, but should not control or unduly influence the decision whether a health care 
provider will receive a grant.17  The AdvaMed code also permits a company to make 
recommendations for CME faculty, although suggests that the ultimate selection should be 
made by the CME sponsor.    
 
Another way to limit the influence of commercial sponsors is the creation of independent 
CME grant organizations.  These entities could accept donations from industry and use an 
independent board of experts to distribute the funds to CME providers.  Such a pooled 
funding mechanism could limit the influence of commercial support by establishing a 
firewall between sponsors and CME providers.  For example, in 2008, the American 
Academy of Orthopaedic Surgeons (AAOS) established a separate grant organization to 
receive and distribute funds to support orthopaedic education.18  The Center for 
Orthopaedic Advancement (the Center) is structured to receive donations from industry 
and make grants based on objective criteria.  The Centers board members may not have 
any personal or institutional relationships with an orthopaedic device or pharmaceutical 
manufacturer for the previous 3 years.  OIG recently learned that five of the major 
                                                 
16 PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA, CODE ON INTERACTIONS WITH 
HEALTHCARE PROFESSIONALS (effective Jan. 2009).  Available online at 
http://www.phrma.org/files/PhRMA%20Marketing%20Code%202008.pdf.  Accessed on Jul. 17, 2009. 
17 ADVANCED MEDICAL TECHNOLOGY ASSOCIATION, CODE OF ETHICS ON INTERACTIONS WITH HEALTHCARE 
PROFESSIONALS (effective July 1, 2009).  Available online at 
http://www.advamed.org/NR/rdonlyres/61D30455-F7E9-4081-B219-
12D6CE347585/0/AdvaMedCodeofEthicsRevisedandRestatedEffective20090701.pdf.  Accessed on July 27, 
2009. 
18  Mark Wieting, AAOS Announces Center for Orthopaedic Advancement, AAOS NOW, Sept. 2008.  
Available online at http://aaos.org/news/aaosnow/sep08/youraaos4.asp.  Accessed on July 27, 2009. 
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manufacturers of artificial joints declined the Centers funding requests in favor of making 
grants directly to organizations.  The future of the Center is uncertain.  
 
Additional safeguards could include establishing broad educational categories for the 
allocation of industry donations.   For example, an organization awarding grants for 
general topics, such as orthopaedic education or oncology education, would operate 
with less influence from commercial interests than an organization awarding grants for 
education on specific topics, such as injectable therapies for osteoarthritis of the knee or 
treating small cell lung cancer.  Ensuring that the intermediary is not a potential 
customer of the commercial sponsors also reduces the risk of conflicts of interest.  For 
example, if a hospital or group practice were to become a CME grant organization, there 
would be a risk that the organization might wield its purchasing power inappropriately.  
The integrity of the grant organization model would be impaired by efforts to make 
purchasing decisions dependent on a commercial entitys willingness to sponsor CME.  
An industry-sponsored CME pool might still favor CME activities that generally promote 
drug therapies or surgical intervention, but the risk of inappropriate influence would be 
lower than allowing sponsorship of individual programs.   
 
While the use of independent grant organizations could limit the ability of industry 
sponsors to slant the content of the CME, companies may not be willing to fund CME 
under these terms.  If this proves to be the case, physicians would have to pay for their 
own continuing education, as do lawyers, accountants, and other professionals.  It is 
possible that the quality of CME would improve if physicians, acting as prudent 
consumers, demand more meaningful education for their training dollar.  CME providers 
would no longer view industry sponsors as their customers and instead would address the 
needs of physician learners.  Ideally, the CME providers would respond to this change by 
offering higher quality programs at lower cost. 
 
Conclusion 
There is growing concern about the integrity of medical education and the financial 
relationships between commercial sponsors and CME providers.  Although restricting 
commercial sponsorship could shift some costs of CME onto physicians, such a shift 
could have positive impacts on the quality and value of CME.  Commercial sponsorship 
could be maintained if the appropriate safeguards are implemented to prevent undue 
commercial influence and preserve the integrity and independence of CME.  Whether the 
medical profession and health care industry are willing to embrace these measures remains 
to be seen. 
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