Principles of Partnership

Companies have read the rules on compliance. But some execs still need help with applying them to the meeting planning process.
Mar 02, 2006

PHARMA MEETING PLANNERS ARE UNDER MUCH tighter scrutiny now than ever before. The PhRMA code, FDA, and the Office of Inspector General (OIG) make sure this group complies with the shifting government regulations, accounts for every penny spent, and records every meal eaten at meetings. This persistent regulatory pressure forces pharma companies to create and implement new policies, but it also has a major effect on suppliers who support them.

For meeting management companies who manage physician-attended programs, the rules have not only changed, but promise to evolve. In this environment, it is critical for pharma companies to develop internal strategies and external partnerships. This collaboration can help both parties make sense of this new landscape.

The Price of Noncompliance

Officially the OIG guidelines are voluntary, but there are big risks for companies that fail to comply. In the two years since the OIG code was adopted, pharmaceutical companies committing marketing offenses have been subject to high-profile indictments, convictions, and fines—sometimes hundreds of millions of dollars. What's more, offending companies can be placed under a corporate integrity agreement (CIA), which forces the company to prove it has created policies and procedures that will prevent future violations. Under a CIA, the government can conduct audits as frequently as every six months, for up to five years. Future violations can lead to hundreds of millions of dollars in fines and criminal prosecution. And the number of CIAs is rapidly mounting: One legal expert noted that the industry may be divided into two sectors: companies that have CIAs and companies that will.

And the penalties aren't just for companies. The OIG's compliance performance guidance (CPG) says that, "liability under the anti-kickback statute is determined separately for each party involved." This means not only the company, but each employee and physician. For example, if a company has 5,000 sales reps and each rep gives an inappropriate gift to 10 physicians at each of 15,000 dinner meetings the company held that year, each sales rep and each physician shares in the liability and can be penalized separately.

If your compliance strategy is to stay under OIG's radar, forget it. High-profile stakeholders have their eye on pharma companies, aided by whistleblower laws and new requirements for self-reporting, assuring that every pharma is vulnerable.

The Task Is Complicated

Meetings present their own set of compliance challenges. Many companies lack the human, technological, and financial resources to capture and consolidate data from individual meetings; to track what they spend on individual physicians; or to create an audit trail that will meet the demands of regulators. While individual brand managers scrupulously track physician relationships and prescription writing, few companies have systems to compile data in the manner required by the government—for example, on physicians who may be involved with multiple brands.

The biggest challenge is the sheer number and diversity of pharma meetings: A typical company is involved in speaker bureau programs, dinner meetings, peer discussion groups, roundtables, and investigator meetings. All meeting-related expenses must be entered into the equation: air travel and other transportation, lodging and amenities, food and beverages, gifts, honoraria, and expense checks. Companies need to be able to calculate the spend for each meeting, and the spend for each physician. To meet some state requirements, individual physician spend must be calculated and reported for all meetings and business services for which the physician is reimbursed by the company.

Although the volume of data that must be captured and monitored is enormous, pharmaceutical companies need to process all of the payments for physicians attending meetings held in various states where different laws apply.

The challenge increases when a company outsources management of meetings to multiple suppliers. Some suppliers may lack the infrastructure or expertise to provide data in the form the pharma company needs. Others will present problems of data compatibility, either with the pharma or with other suppliers. Many companies address these problems by establishing data feeds between systems, but this can be an expensive solution—especially if multiple vendors are involved. Consolidating your requirements for medical meetings with one or two suppliers may be the way to reduce the cost of implementation and streamline operations.

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