SAMED Stakeholder Newsletter

SAMED News:

Stakeholder
Edition

Index

Why have you received this Newsletter? Pg 2
The Medical Device Code of Ethical Business and Marketing Practice Pg 2

SAMED Annual Conference: Post Event Report Pg 3

Outstanding payments: What is the impact on industry? Pg 5

Industry working with Provincial Departments of Health: How can this

process be improved? Pg 5

Medicines Regulatory Authority and Industry establish a medical devices

working group! Pg 5

As a Doctor Society, do you engage with SAMED? Pg 6

Company Representatives in the Clinical Environment (CRICE) Training

Programme Pg 6

Global Fee Tenders: What are the unintended consequences? Pg 8

Health Market Inquiry: Where are we now and what are the key Pg 8
issues?

1

Why have you received this pharmaceuticals operated under a joint marketing

Newsletter? code. On 29 September 2016, SAMED took the
decision to resign from the MCA and to fortify and

SAMED - the South African Medical Device Industry apply a dedicated Medical Device Code of Ethical
Association – is a non-profit voluntary association Business and Marketing Practice. The rationale was
representing the interests of 180+ Medical Device, based on the following:

Medical Equipment and In Vitro Diagnostic compa-  SAMED wants increased awareness among
nies in South Africa. The majority of our Members all stakeholders that it is the authentic voice of
are small to medium companies. We represent the medical devices industry and has 100%
commitment to actively promote ethical
distributors, multinationals and local manufacturers. business and marketing practices of its
Core to SAMED’s vision is ensuring a sustainable
members.
Medical Device industry by responsibly improving
patient access to innovative medical technology.

You are a key stakeholder to SAMED and its mem-  The Medical Devices and pharmaceuticals
ber companies. We urge all stakeholders to get in industries are very different. The Medical
Devices industry is unique: due to the unique
touch with us if they have any questions about the
Medical Device industry! We endeavour to keep you nature of medical technologies and devices
informed on recent developments within the sector and the fast pace of innovation, companies

and how these may impact you. Contact us on have a hands-on relationship with health care
[email protected] professionals including ongoing customer
liaison, training and continual maintenance of

The Medical Device Code of equipment. These are not common features of
the pharmaceutical industry’s relationship with

Ethical Business and Marketing its clients.

Practice  SAMED aims to improve its enforcement and

The South African Medical Device Industry Associa- sanctioning capabilities. Proposed changes
tion (SAMED) views ethical compliance as a when we replace the MCA code to the Code

non-negotiable for the medical devices and IVD in- of Business Practice into the Medical Device
dustry. Conformity to the SAMED Code reinforces Code of Ethical Business and Marketing
ethical behaviour and serves to safeguard required Practice include plans to have an independent

ethical relationships that companies have with investigative arm (with anonymous reporting
healthcare professionals, regulatory authorities, and a forensic lawyer). This arm will be able to

marketing and sales agents and the general public. deal more efficiently with transgressions of its
The SAMED code is a self-regulating framework code and ensure the Medical Devices industry
enabling SAMED members to practice the highest is more accountable and better regulated.

ethical marketing and business standards when SAMED recognises that one of Government’s
engaging with Healthcare Professionals” objectives is for the healthcare industry to ensure

SAMED will embrace its own Medical Device Code patient safety. We are confident that our fortified
of Ethical Business and Marketing Practice as from code will enable our industry to contribute to the
1 January 2017 in order to promote an optimal poli- attainment of this goal and we have proactively
cy environment that enables the Medical Devices sought meetings with key Government officials,
industry to meet the growing healthcare needs and including the Minister of Health, the Deputy Director
expectations of its stakeholders. General, Health Regulation and Compliance
Management, the Chief Director: Sector-Wide

SAMED’s Code of Business Practice was Procurement and the Registrar of Medicines to
developed 12 years ago, outlining clear guidelines discuss the changes. We will also promote the

in the marketing of health products and how its Medical Device Code of Ethical Business and
members conduct themselves in their interactions Marketing Practice through various channels
with healthcare professionals and procurers of their
including meeting with other key stakeholders such
products. Six years ago, SAMED entered into an as funders, hospital groups, provincial government
agreement with the pharmaceutical industry to departments and professional associations.

create a joint South African Code of Marketing 2
Practice under the Marketing Code Authority (MCA).
To our knowledge South Africa has been the only

market globally where medical devices and

SAMED’s membership of the MCA ends on 31 transparency and accountability are essential

December 2016 and members are required to considerations in the procurement of products, he

adhere to the MCA marketing code until then. stressed the importance of collaboration between

We must emphasise that in adopting SAMED’s procurers and suppliers to ensure ethical procure-

Medical Device Code of Ethical Business and ment practices and address the huge inequities in
Marketing Practice, there is an increased require-
the current healthcare system.

ment on our members to promote their products in a Welcoming the establishment of the South African
responsible, ethical and professional manner. Health Products Regulatory Authority (SAHPRA)

For any further information, please contact: and the regulation of the devices industry, Hampton
[email protected] said it would not only address issues around
unethical business practices, corruption and

SAMED Annual Conference: inefficient, low quality products but also provide a
channel to lodge and investigate complaints about
Post Event Report
poor quality technology.

Some pictures from the day:

Held at the end of August, the South African Panel Discussion SAMED’s Tanya Vogt
Medical Device Industry Association’s (SAMED) 6th (from left to right): who opened the
annual conference, value based procurement of conference and
Medical Devices and ethical interactions with health Gavin Steel, Dr Joubert Krugel,
care professionals was high on the agenda, Millicent Simelane;
particularly around ensuring that the patient is the Vassie Ponsamy, KPMG in South Africa
ultimate beneficiary in a changing health system. who led the panel
With the theme ‘Partnering for Patients’ and Joubert Krugel discussions
attended by more than 200 delegates from the (Facilitator); Dave
Dr Anban Pillay, from the National
industry, government and the private sector, Selby; Dr Sifiso Department of Health who
presentations by both local and international experts Maseko and Iris Ko. presented at the conference
highlighted the need for proper health technology
assessment, regulation and procurement systems
to promote patients’ access to affordable, high
quality and appropriate products to improve the
country’s health outcomes. Speakers also included
patients, who related their experiences and
challenges around access to life-saving technology.

Taking note of the many pressing issues around Kenneth Pillay and Manthepeng
healthcare technology and challenges facing the Tshinavha from National
industry, SAMED chair, Jeff Hampton called on all
manufacturers and suppliers of Medical Devices Treasury’s Office of the Chief
and purchasers in both the private and public sector Procurement Officer (OPCO).
to ensure that the partnerships they enter into serve
one purpose only and that is, to benefit patients and
improve their quality of life.

“The effectiveness of technology should be meas- 3
ured by patient outcomes and its total value to the
healthcare system and not cost, irrespective of
patients’ financial circumstances,” Hampton said.
Adding that value, quality service delivery,



Outstanding payments: What is
the impact on industry?

Recently SAMED received several member Mr Fanie Hanekom, Gauteng
complaints regarding the lack of payment from Treasury presenting to the SAMED

members

Provincial Departments of Health. We conducted a KZN Department of Health
survey of our members as to the magnitude of this
problem. Sixty members responded, they are
collectively owed R611 million for invoices
exceeding 30 days, with R269 million owed by the

Gauteng Department of Health.

SAMED is concerned that our members will be SAMED will be supporting the KZN Department of
unable to sustain this level of non-payment, and Health via an upcoming workshop on best practice
that, small companies in particular, may have to in the procurement of medical devices to identify
close their doors and / or stop selling into the public gaps in the KZN procurement process and help
identify practical solutions for long-term benefit.

sector. This has the potential to affect service SAMED would like to extend this offer to all
delivery and patient access to products and care, Provincial Departments of Health so please contact
lead to fewer players and less competition. This us!

would be a blow to the industry as well as Medicines Regulatory Authority
healthcare delivery in South Africa as a whole. and Industry establish a medical

SAMED has met with the Department of Planning, devices working group!

Monitoring and Evaluation in the Presidency who

has offered to assist in finding a suitable solution. Medical device and IVD manufacturers, importers
and distributors are now required to licence their
Industry working with Provincial company with the Medicine Control Council (MCC).

Departments of Health: How can Two types of licences are required:
this process be improved?
 Licence to manufacture medical devices and

Gauteng Department of Health IVD’s which will allow you to:
 Import

SAMED has held workshops with its members on  Manufacture and distribute
the Gauteng Department of Health e-invoicing and  Export

consignment stock projects. Benefits include:  Licence to distribute medical devices and

 Invoices can be submitted and processed 24 IVD’s which will allow you to:
hours a day.  Import

 Invoice exceptions (GRV not captured) can be  Distribute
addressed much earlier.  Export

 Elimination of pre-capturing process delays.

 Predefined XML file layout and PDF/ TIFF in-

voice lay-out that result in accurate, immedi-

ate processing of invoices by the system.

Some pictures from our workshops

SAMED Members engaging 5
with the Gauteng

Department of Health

Licences will be valid for 5 years, thereafter compa- Company
nies will have to renew their licence. Companies Representatives in
only supplying Class A Medical Devices do not the Clinical
require a licence for their establishment at this
stage.

Industry has established a Medical Device working Environment
group with the Registrar and her Medical Device (CRICE) Training

team. SAMED has requested that a workshop be Programme
held with Industry, as there remain a number of

queries from Industry as to the licence CRICE is a SAMED initiative that is the industry
requirements. This is the first step on the path to standard for professionals representing Medical
Device companies in the clinical environment and is
regulate medical devices and SAMED supports this administered by Masoom Training Solutions.
legislative framework to ensure that only safe, There are two versions of the CRICE training
quality and effective medical devices enter our programme:
shores and are used on patients. Stakeholders are
urged to ensure that companies (except companies

marketing Class A device) they are procuring from  CRICE Including Theatre Setting: for Compa-
have a valid licence once this process has been ny Representatives (CRs) who enter theatre
completed. setting and are thus expected to be familiar

As a Doctor Society, do you with surgical hand scrubbing, gowning and
engage with SAMED? gloving procedures
 CRICE Excluding Theatre Setting: for CRs
who enter the clinical environment but who do

SAMED has worked with a number of doctor socie- not enter theatre and therefore this version
ties this year: excludes gowning, scrubbing and gloving
procedures

South African Orthopaedic Association: SAMED The CRICE programme continues to expand
has engaged with the Association around fair with 403 companies participating to date and
market value guidelines, venue vetting, and 8087 enrolments nationally.
sponsorship to and for congresses as well as

fellowships. The CRICE web platform, www.crice.co.za was

Wound Healing Association of Southern Africa launched at the SAMED annual conference in
(WHASA): WHASA is currently developing a new August 2016.

educational programme with input from Industry and The new CRICE Platform allows hospitals to:

SAMED. SAMED has been in discussion with

WHASA to establish a forum with industry to  Use the 'Check your CRICE status tool':
discuss matters of common interest. Netcare, who have made CRICE a

South African Society of Anaesthesiologists requirement in all their hospitals, can use the
(SASA): SASA has educated our members on how
CRICE Status Tool to check the status of
to engage with users of Medical Devices and how to CRICE completion, document submission and
prevent conflicts of interest and perversity. SASA card print status.

presented at the SAMED Annual Conference on

how clinician advisory boards are key to informing We encourage all hospitals to also check out the

equipment purchasing decisions. Frequently Asked Questions on the new website:
www.crice.co.za. We urge all public and private

A key strategic objective for SAMED is to work more sector hospitals to support this initiative by making
closely with all doctor societies to understand their these access cards a requirement for entry into your

needs and partner on issues that affect an optimal facilities. CRICE training safeguards hospitals by

policy environment that enables the Medical Devic- ensuring company representatives are trained
es industry to meet the growing healthcare needs properly in sterilisation, informed consent, out of

and expectations of its stakeholders. SO GET IN scope behaviour and aseptic techniques, to name

TOUCH WITH US! just a few.

6



Global Fee Tenders: What are the Health Market Inquiry: Where are
we now and what are the key
unintended consequences?
SAMED has become aware that medical schemes issues?

have issued tenders for “the supply of healthcare SAMED has submitted further comments to the
professional services and goods”, tenders which Health Market Inquiry Panel contesting a number of
were issued to private hospital groups. statements made in the first set of hearings

SAMED is, as a matter of principle, supportive of (February-March 2016) about the medical device
alternative reimbursement strategies, and in
sector. Stakeholders should be aware of these key
particular those, that create value-based systems, issues that may be pertinent to their sector. A few
and shared responsibility. key issues raised are as follows:

The regulatory framework for healthcare profession- Doctor Trading
als prohibits them from sharing fees with any entity A number of oral submissions advocated that medi-
not registered under their Act (the Health cal specialists be allowed to sell devices believing
Professions Act (ethical rules 7 and 8) and also the doctor would then be more informed especially
prohibits sub-contracting (ethical rule 18). about what the device does and its capabilities.

Healthcare professionals are also prohibited by SAMED’s view is that doctor’s trading in medical
ethical rule 23 to enter the medical device supply devices, which they use on their patients does lead
chain. If device companies were to embark on to potential conflicts of interest. This is supported
projects that assist in the violation of these rules, by Ethical Rule 23(1) of the 2006 Ethical Rules of
they would be complicit in unlawful activities (rightly the HPCSA, which prohibits a practitioner from
or wrongly so). participating “in the sale, advertising or promotion of

It also leaves medical device companies (and any medicine or medical device” It is also SAMED’s
potentially patients) exposed to decision-making in
opinion that doctor’s trading does not lead to
which they have had no say, and which appears to reduced cost. Internationally a number of case law,
be purely driven by price (and not cost- papers and research point to the legal and
ethical concerns related to doctor trading1. The most
effectiveness, or value-for-money, or patient out- significant developments appear to have taken
comes). SAMED’s second concern is that offers are
made to medical schemes that include device costs, place in the USA.

by entities that are not involving such device suppli- Physician owners, so it is argued in the USA, are in
ers in the pre-work or in negotiations. This leaves a position to choose product for their patients and
hospitals to which they refer patient, and to be paid
companies at the mercy of larger players, and there for both the procedure and for the sale of the
appears to be no, or limited opportunity to share product. There is no reason for physicians to order
information relating to patient outcomes on devices through Physician-Owned Distributors
products, with those at the negotiating tables.

SAMED has written to both the Health Professional (“PODs”) (rather than other manufacturers’ implant-
Council of South Africa and the Council of Medical able products) other than for the physicians to profit
from the choice of POD implantable devices for use
Schemes, seeking clarity on how medical schemes on their patients. As a result, PODs may incentivise
should embark on tender processes as well as physicians to perform medically unnecessary proce-
whether healthcare professionals should be allowed dures or to use medically unnecessary products,

to participate in this practice if it contravenes their thereby driving overutilization and causing inefficien-
ethical codes of practice. cies and overpayments. U.S. Department of Health

The South African Society of Anaesthesiologists and Human Services Office of Inspector General
(SASA) has also advised its members that (“OIG”) cites 2012 data, wherein hospitals that pur-
chased from PODs performed over 28% more spi-
“participation in any global fee offering in current
forms by a healthcare professional is not permissi- nal surgeries than those that did not purchase from
ble in terms of HPCSA regulations.” Please click PODs2.

here to view SASA communication. 1. http://advamed.org/res?q=physician+owned.

Stakeholders, including funders, hospital groups 2. U.S. Department of Health and Human Services, Office of Inspector General,
Spinal Devices Supplied by Physician-Owned Distributors - Overview of
8unintended consequences if they embark on global http://oig.hhs.gov/oei/reports/oei-01-11-00660
and healthcare professionals should be aware of the Prevalence and Use (Oct. 2013), available at

fee tenders in the private sector.

Rebates the health sector. In-country differences can also be

A number of allegations were made in these hear- explained.

ings that rebates on Medical Devices are still

occurring. For example, a large, powerful administrator would

be able to negotiate better prices in return for

In 2011, SAMED, through its Code of Business volume uptake. Product range offerings may also

Practice, prohibited its members from providing allow suppliers to offset lower margins on one

rebates in the form of off invoice discounts. This range, in return for better margins on another.

requirement continues today. All SAMED members

on becoming a member have to sign adherence to Product complexity and the cost of local training and

this Code of Practice see: http://www.samed.org.za/ support (salary levels of professional representa-

Codes-of-Practice.aspx. The fundamental purpose tives, technicians, etc. involved in device training,

of the Codes of Practice is to promote and device support and maintenance differs from

encourage among SAMED Members, ethical country to country) influence the level at which pric-

principles and practices in their engagements with es are set in various countries.

their customers and healthcare professionals.

Unfortunately, those companies that are not Price variation between countries occurs because

members of SAMED fall outside of this requirement. of:

 Differences in the available mix of competing

SAMED urges that the Panel support it in products and treatment options;

recommending that the Minister of Health  Currency exchange rates;

promulgate these codes in terms of Section 18C of  Differences in retail margins;

the Medicines and Related Substances Act of 1965,  Differences in benefit levels set by various

where provision has been made, but never medical schemes and various options;

implemented, for such Codes to be brought into Differences in regulatory and product liability

effect. With the envisaged implementation of section systems;

18A as amended, of the Medicines Act (see Acts 72  Differences in costs of labour, shipping, distri-

of 2008 and Act 14 of 2015), and accompanying bution, sales and overheads;

regulations, the issue of rebates and perversities  Differences in health care structures and

could be addressed where and to the extent that it healthcare funding models (e.g. a National-,

might still exist. Social-, or multi-fund environment, and the

size and shape of private markets);

On the matter about transparency regarding the Differences in payment terms / lead-times;

price of a device, every doctor and patient has the  Differences in product lines and types and

right to ask a medical device company what the availability per country, also based on country-

price of the device is and how this is made up. For (and/or provincial/state-) wide procurement

medical devices that are reimbursed by medical and purchasing policies and practices.

schemes, each scheme knows exactly what the

reimbursed price of the product is as this is often SAMED stressed the importance of the successful

negotiated with the supplier, or set in relation to a implementation of South African Health Products

reference price. Doctors also have the right to Regulatory Authority (SAHPRA) as a key

choose amongst a number of comparator medical component of ensuring that competitive forces

devices as to which is the best device for their prevail.

patient, and a system of comparative quotations are

often in operation and enforced by medical Reuse of Single Use Devices

schemes. Some administrators have an approved SAMED noted that it was stated in the hearings that

product list, which it circulates to the hospital groups the reuse of single use devices is prevalent in India

and lists the product and price for medical devices and should be considered in South Africa.

that it reimburses.

Cost of medical devices / equipment

In the last set of hearings, a number of hospital
groups benchmarked higher prices of medical
devices in South Africa with other countries.

All types of products exhibit a range of price 9

variation, both within and between countries. These
are done in response to competitive forces and
country-specific features, such as the structure of

Single-use devices (SUDs) are designed and

SAMED would like tomanufactured for single use and are intended by the
original manufacturer to be disposed of permanently
after use. Single-use devices may be manufactured wish all our

from materials that cannot withstand the harsh

stakeholders a blessed,conditions (e.g. exposure to solvents and extreme
temperatures) encountered during reprocessing
and/or re-sterilisation. safe and healthy

The reprocessing of a single-use device presents a holiday season!
serious risk to patients, as it may not result in a
product that is as safe and effective as that provided We look
by the original manufacturer. Biological forward to engaging
contaminants can remain on the device, thus with you in the New
increasing the risk of patient exposure to Year on important
contaminated products, with potentially serious developments that
health consequences. Single use devices often affect the healthcare
have characteristics that make them extremely
difficult to clean and re-sterilise effectively. Among industry.
these characteristics are small, difficult to access
areas, such as long, narrow lumens, acute angles, If you would like any
crevices, coils and joints, reinforcing meshes and further
rough, porous or occluded surfaces. These
inaccessible areas create barriers to cleaning and information with
allow for the collection of organic matter, such as regards the content of
blood, faeces, respiratory secretions and gastric this newsletter please
mucin.
contact us on
There are currently no procedures or guidelines to [email protected]
re-sterilise Medical Devices in South Africa, and
sterilisation of products, where it is required, such
as in theatre sets used to support implants, often
falls on the supplier.

Currently there is no accreditation system in place
(such could be linked to section 36: certification
under the provisions and envisaged regulations of
the National Health Act).

As a matter of principle, SAMED therefore supports
the position of manufacturers that devices marked
as single-use (i.e. regulated and registered for that
purpose only, and also as is required by the
Consumer Protection Act) may not be reprocessed
or re-used, in the interest of patient safety and
infection control.

10