Pharma companies can take five steps toward formulating a national approach to the varying operational requirements of state-level
compliance. In doing so, companies can be proactive in developing their compliance infrastructure, and be better positioned
to keep pace with the changing regulatory landscape.
1. Cross-Functional Teams
To comply with states' requirements, pharma companies must obtain data from a variety of internal departments and external
providers. This includes capturing data not only from sales and marketing groups, but also from other operating departments,
such as managed-market account managers, medical science liaisons, clinical medical groups, federal pricing departments, and
vendors, such as advertising agencies and meeting-planning companies. As such, companies must retrieve data from a variety
of sources, including call logs, T&E reports, promotional activities, like speaker programs and conventions, and contractual
arrangements, such as investigator contracts and consultant agreements.
To most efficiently pull this information, companies should create cross-functional teams that include members from sales
and marketing, finance, medical, managed markets, and strategic sourcing. Such teams are more easily able to locate the required
types of spend and get sources of data more efficiently than requiring one department to determine this on their own. Companies
will find that instituting cross-functional teams greatly enhances the speed of data collection while providing greater assurance
that all areas of spending are identified.
2. Track Everything
In order to move from a state-level view to a national approach to compliance, companies must track and itemize all items
of spending on healthcare providers to the most granular level of detail. This includes identifying what type of healthcare
professional is the recipient of such spend (be they physicians, nurse practitioners, pharmacists, formulary committee members
or medical students), and segmenting the items and activities of spending into mutually exclusive categories. It's important
to remember that spending on healthcare professionals is not just limited to sales and marketing activities, but should also
include other payments or items provided to licensed prescribers, such as investigator compensation or meals at clinical subject-recruitment
Then, companies must allocate each of these spend categories to an individual healthcare professional, which is usually done
by tracking spending against an existing unique identifier for the physician. (Typically, firms opt to use the same ID number
to record and track sales call data.) This should be done for all US prescribers and healthcare professionals—no matter what
their state of licensure may be.
For instance, let's look at a typical promotional-speaking program where a physician is contracted to speak to a group of
other providers. In this case, a pharma company will typically pay the speaker an honorarium at fair market value and reimburse
them for travel. During the meeting, the speaker eats a modest meal alongside attendees.
In this scenario, firms should record each of these costs separately, as distinct data fields, such as "speaker honoraria,"
"speaker travel," and "speaker meal," and associate each of these costs with the speaker's unique ID number in their promotional-speaking
program database or IT system. Similarly, the firm needs to record the attendees by their unique ID numbers and attribute
the amount of their meals into a data category, such as "program attendee meals."
Companies should conduct this type of detailed tracking for all activities in which they provide value to healthcare professionals.
This way, regardless of any state's required permutations of disclosure, companies will be ready to report, track, or disclose
any spending that a state may require.
3. Short-Term Policies, Long-Term Strategies
For pharma, the backbone to state-level compliance is robust reporting systems. But building new or enhancing existing infrastructure
often requires substantial amounts of time and investment. Companies often must make do with existing technology and rely
on developing new policies to safeguard against compliance issues, as they look more long-term to improve their technology
For instance, systems may not be in place to trace actual gift spending to a specific physician. As a result, in the short-term,
companies may find themselves developing a corporate policy that limits frequency and types of gifts in lieu of recording
and tracking all gifts to all physicians. However, over time, that dynamic will switch to a greater reliance on leveraging
technology to track actual expenses.