Tracking of Spend Data Widens

Feb 20, 2008
By Pharmaceutical Executive Editors

As more and more states require that pharma companies report gifting and other nonclinical spending, the industry as a whole is rushing to find ways to capture the data needed to be compliant and report accurately.

Last week, Huron Consulting published an aggregate spend report detailing how much companies are spending to prepare and train for state reporting laws. Pharma is responding to the challenge: According to the report, 76 percent of companies are providing some form of training to employees, with the bulk of training going to marketing and brand employees (76 percent) and affected field sales (69 percent). But, interestingly, information technology is playing a larger role than might be expected.

Third-party Challenge One of the biggest challenges in reporting is how to best monitor what is being spent on the company's behalf by third-party vendors, such as medical education providers or contract sales organizations (CSOs).

The report states that 38 percent of vendor data is captured using manual data entry with a format provided by the pharma company. Electronic data capture (EDC) still isn't the most-used method of input. Of the companies interviewed, 22 percent allow the vendor to input data via a Web portal, and another 22 percent of the data is obtained by an interface between the vendor and the pharma company.

"Ultimately, with third parties, you need to make sure that they can accurately report back how they are parceling X amount of money so that you can report back to the state," said Debjit A. Ghosh, director, Huron Consulting Group.

Manual or Electronic? One problem is that each state has different rules for reporting. For example, California requires that companies set up certain provisions and limits and that they track, monitor, and audit against those limits. Then the companies must provide the state with a declaration that they are in compliance. Vermont defined a format (data record) and requires that pharma submit a file for every transaction the state deems to be trackable. Minnesota requires the same submission but in an electronic form.

While there is opportunity to move to an EDC system, it's not that simple, said Paul J. Silver, managing director, Huron Consulting Group. "Companies are looking at alternative means to track spending, whether that is electronic or a paper-based system. But the challenge of either one right now is that the system has to be nimble because more and more states are coming on board and requiring different things."

At this time, 72 percent of companies capturing, integrating, tracking, and reporting state spend data are doing so through a manual data-input process. Only 38 percent are using a proprietary system, and 13 percent are using an externally hosted package solution.

"Drug companies have systems to address key functional challenges and issues, but these state laws have put out requirements for pharma to track data across functional areas and across systems," Silver says. "Given that these laws are relatively new, the thought is to first create a process to be able to comply and then to move to something that is more efficient and scalable."

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