"I was with a medical products company in Germany last week, and we talked about Sarbanes-Oxley" says Jim Sabogal, director
of the life sciences–pharmaceuticals business unit for SAP. "For the most part, the question was, 'We're spending 20 percent
of our IT resources on Sarbanes-Oxley. Is that high?' And our answer was yes, that's a lot of resources to be putting in one
For pharma companies, Sabogal says, SOX should represent familiar territory. "In manufacturing," he says, "you're trying to
maintain control over how the whole process is organized and reported. In 21 CRF Part 11, we have a rule that covers digital
signatures and electronic records. Because of Enron and all those other folks, the United States has now added that same level
of scrutiny to financial records. Any time someone makes a change to a financial record, the technology needs to keep track
of who's made the change, so that nobody can go in there and modify a financial record. In our own product we use the same
digital signature tool technology that you find in manufacturing."
Sarbanes-Oxley may be difficult and expensive to comply with, but at least it creates a single standard for the whole country.
In recent years, and especially in the past year or so, there has been an explosion of state level regulations aimed at curbing
particular pharmaceutical marketing practices. "Sixteen states restrict or prohibit drug advertising," says Ronald Buzzeo,
chief regulatory officer for Dendrite, and CEO of BuzzeoPDMA (since January, a division of Dendrite). "That can be rebates,
that can be coupons, that can be discounts, which will impact what companies can do," he says. "Vermont, since 2004, has required
disclosure of certain information about marketing activity directly involving a practitioner. At least six states require
reporting and disclosure of advertising and/or gift-related expenditures or budgets. There have been over 60 bills introduced
in the first half of 2005 dealing with these issues."
One area commonly regulated at the state level has to do with samples, and how reps can and can't interact with midlevel practitioners,
such as nurse practitioners and physicians' assistants. In some states, Buzzeo explains, midlevel healthcare workers can receive
a sample but not dispense it. In others, they can dispense but not dispense samples. In still others, they can do both, but
only if they have a signed collaborative agreement with a physician. "As a company, how do my sales reps know what they're
supposed to be doing?" asks Buzzeo. "If it's a paper-based system, the rep is out there with a piece of paper. If it's an
electronic system, the rep goes into the system, and it says, for example, Mr. Jones is a mid-level practitioner in the state
of Michigan. He is able to receive my sample, so I can leave it."
Dendrite has built state-level controls into its solutions for sample management and sales force effectiveness, and is in
the process of developing a product that will make current state-level regulatory information online.
"The industry best-practice rules for managing compliance are already in the applications," says David Escalante, vice president
of product management for Dendrite. "But when we deploy the applications for a particular customer, we have a process to review
those baseline requirements, and receive updates from the customer on how they should be updated, based on how they run their
ERP and Beyond
The big systems integrators and enterprise resource planning (ERP) providers are actively pursuing solutions to pharma's regulatory
challenges, but the field still has many specialized players providing highly focused solutions for specific portions of the