Balancing Act

The feds and states pile on layers of new regulations governing medical education. Companies interpret the rules. Here's how to manage the risk.
Sep 01, 2006
By Pharmaceutical Executive Editors

For a while there, it looked like pharma had lost its appetite for big investments in the $3-billion medical-education market. With new OIG guidelines and corporate integrity agreements limiting their business and increasing compliance-risk exposure, many pharmaceutical companies seemed to be wondering: "Why invest in CME at all?"

Now, as the dust settles, many companies have found creative solutions to staying in the CME game while adhering to the ethical spirit of the guidelines. Most companies have gone through a painful and expensive phase of reorganizing their processes, developing policies and procedures, training and educating their staff, and implementing monitoring and auditing procedures.

And then there is the simple fact that guidelines must be interpreted. This can be very tricky. For example, most companies agree with OIG that marketing and sales should not be involved in allocating grants. However, they ask, is there still a role for marketing at all? Or, to what level can marketing be involved in identifying and defining educational objectives? Depending on the appetite for risk, the company might have taken a conservative or a more aggressive approach interpreting these guidelines. Most of the top issues facing companies have several interpretations—and very different degrees of compliance risk.

Keeping Out Grants

Regulations Old and New
Sales and marketing departments traditionally decided on grant allocation. They were able to determine who would get a grant. And of course they knew who the high prescribers of their drugs were. Consequently, there was an inherent risk of providing kickbacks (grants) to high prescribers. What looked like a beneficial relationship with a good customer soon began to look like a kickback, especially under OIG guidelines—not to mention Senator Charles Grassley's scrutiny.

To avoid this kickback risk, companies have been moving grant allocation to parts of the organization that do not report to sales and marketing, and which do not have an incentive to increase revenue by providing grants. Most companies have formed a new grant office and have staffed it with personnel to handle only grant allocation. This new grants office, in most instances, reports to medical affairs.

Since marketing has a clear understanding of what physicians' educational needs are, some companies are allowing the marketing department to define high-level educational objectives and communicate these to the grants office, so that grants can address these needs. These objectives cannot be too specific.

Companies are therefore developing standard operating procedures to instill the right checks and balances in the grant allocating process. This is meant to avoid undue influence from marketing while allowing the department to provide valuable information to the grant review committees.

The grants office cannot rely only on the input from marketing. It needs to be able to define the educational needs for a therapeutic area independently. Therefore, the grants office must have subject matter experts on staff who understand the therapeutic area's educational needs—and can identify grant requests that address those needs. These are experts within the therapeutic area who interface with the grant-requesting organization, communicate with marketing, commission independent studies, and develop their independent view on what the educational objectives are.

Same Goes for Reps and MSLs

Sales representatives and medical science liaisons (MSLs) have been stripped of many tools they used to influence physicians' prescribing behavior. One of the last to go was the ability to give grants. The average grant ranged from $1,500 to $2,500, and was used to cover educational activities. Physicians now have to submit proposals for a grant to the grants office, which approves grants independently.

In order to mitigate the pain, some companies have decided to notify sales reps when physicians in their calling areas submit grant applications. In addition, some companies have decided to notify reps when one of their doctors gets a grant approved. Companies that interpret the OIG guidelines strictly will not notify the reps at all. Others will only notify reps during a transition phase of six months to a year, after which rep notification will be eliminated. Many companies only allow reps to distribute a business reply card if they receive an unsolicited request for a grant from the physician. The business card directs the physician to the Web site or telephone number of the grants office.

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