50 5 2005 - Pharmaceutical Executive


50 5 2005
Five things you can do to prepare for compliance in all 50 states—starting today

Pharmaceutical Executive

To see where they are on that path, companies must first conduct a technology gap-assessment of their existing infrastructure for capturing the required data. For instance, using the prior example of a promotional speaking program, a company should ask questions such as if it has a technology system in place capable of tracking attendees by their unique ID numbers. After completing this, companies will then be able to identify in which areas to develop new policies in the short-term and know which systems will need to be developed or further enhanced over time.

As companies develop these IT systems, executives will be better able to address reporting shortfalls. Eventually, the new systems can be created and integrated with third-party vendors, greatly improving the accuracy of per-physician reporting.

4. Communicate and Train

Companies must develop new policies and pathways that address the organizational response to new state laws. However, it is often more difficult for companies to enforce their policies. Therefore, executives should consider the following steps to communicate with and train employees on their new protocols:
  • Dispatch general communication—through an Intranet or newsletter—to inform the entire organization, explaining the new state laws and their impact on the organization.
  • After informing employees, educate them on new policies and organizational changes using either online or live modules.
  • Update vendor contracts to include required data reporting and the desired format of the data. For instance, ad agencies will need to breakdown national DTC spending on a per state basis, and medical education and communication companies will need to capture and record spending to specific attendees.
  • Conduct state-specific training for employees in affected states, describing the specific requirements and definitions used in the applicable law. Training programs can be rolled out in live or e-learning-based modules.

Executives should record and document their communication and training efforts to gain credit for implementing two of the OIG's seven elements of effective compliance programs—namely, education and training and lines of communication—as well as the requirement for attestation in California. (See "Fair Market Value," September supplement to Pharm Exec)

5. Audit Against Adherence

Management guru Peter Drucker once said, "If you can't measure it, you can't manage it." But when it comes to state-level compliance, who should do the measuring?

Some companies are proposing a new operating group whose operational responsibility will be to manage, monitor, and report state-law compliance. Others are expanding the responsibilities of existing operational groups, such as business services, business analysis, public affairs, or finance. In any case, the group responsible for ensuring state-level compliance should be unique from legal or compliance, which should focus on interpreting and setting policies around these laws, respectively.

In order to ensure compliance, companies will need to audit against new operational policies. Companies must ensure that the auditors understand the compliance concerns and operational processes involved with the various state laws. This will involve auditing third-party vendors, internal sales staff, and contract sales organizations, as well as marketing activities such as promotional speaking programs and conventions.

Here to Stay

Operations and compliance departments are likely to continue to face burdens as pending legislation develops into new law. And the six states with existing laws are still moving targets—they may decide to expand or revise their requirements in the future. But companies that set up a holistic national plan to address state-law compliance will be better positioned to respond to any new regulatory requirement.

In addition to internal compliance and operational efforts, industry should consider lobbying for a common standard of legislation, to preempt further disparity in reporting requirements. Similarly, industry could look to develop a common standard of data exchange with vendors, to improve compliance with state laws. This combination of internal operational enhancements and external industry-wide efforts will best prepare companies for responding to existing and pending state laws.

Jonathan Wilkenfeld is a senior manager and Judith Braun-Davis is a compliance specialist at Polaris Management Partners. They can be reached at


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