, Vice President and Head, Payer Insights and Access, Global Health and Value, Pfizer Inc.

, Global Pricing and Market Access Head, Oncology & CNS, Takeda Pharmaceuticals

, Principal and Vice President, CB Partners

, Executive Director and Oncology Global Therapeutic Head, Amgen

, Chief Commercial Officer, PTC Therapeutics

Rare diseases are life-threatening conditions affecting fewer than 200,000 patients. This may seem definably small, but in the aggregate, rare diseases are hardly rare: some 350 million people worldwide have a rare disease, more than the total for cancer and AIDS combined. We also know that 7,000 diseases are classified as "rare," yet only around 400 are currently treatable with medicines available in the clinical setting. In light of this daunting hierarchy of need, what stake has your organization taken in rare disease research and therapy, and why?

Shire has undergone a significant strategic realignment in the last year or so, but our commitment to rare diseases remains at the very heart of the company. Conditions like Hunter Syndrome, Gaucher's, and Fabry Disease are priorities, and our pipeline portfolio promises many additional growth opportunities in this space. All of us at Shire are aware of the intensely personal nature of rare diseases-as parents, we can relate to the fact that rare diseases affect children disproportionately. Shire also has a strategic focus on conditions where we know our scientists can make a difference. At present, we have 28 pipeline assets for rare disease in development.

	Shire is shifting its organizational approach to rare diseases, from concentrating our work on rare diseases in a single business unit to one where rare disease products will be integrated with other products along therapeutic lines. For example, 

, the inflammatory bowel drug obtained through our recent acquisition of NPS Pharmaceuticals, will now sit in our GI business unit.

 PTC is a biotech with a nearly two-decade commitment to the discovery and development of treatments for patients with rare disorders, utilizing our expertise in RNA biology and post-transcriptional control mechanisms. Our lead compound, 

, has been approved in the EU to treat patients with Duchenne muscular dystrophy (DMD) due to a nonsense mutation and we are in Phase III trials for its use in cystic fibrosis patients with the same mutation. It is estimated that 10-15% of an estimated 2,000 monogenetic rare diseases are caused by a nonsense mutation. We are assessing additional indications for 

 for patients with the same underlying mutation. From an organization standpoint, in the last two years, PTC has moved from being privately held to a publicly traded company, providing the capital base to pursue our R&D goals as well as establish an international commercial presence. Our experience demonstrates that in the rare disease field, it's gratifying to advance patient-focused innovation for such high unmet need.

Pfizer has a robust presence in rare diseases, with 22 approved molecules that treat such conditions or carry status as an "orphan" drug. For example, we have a major presence in hemophilia as well as products for polyneuropathic conditions and Gaucher's disease. At Pfizer, our strategic focus in the areas of hematology, neuromuscular, and pulmonary has allowed us to find opportunities internally and externally to develop these franchises.

 I lead the regional pricing and market access team for Takeda Oncology. At Takeda, we aspire to make a difference in lives of cancer patients worldwide. My team is responsible for ex-US and ex-Japan regions, including EUCAN and emerging markets. As for rare disease, my team focuses on "rare" cancer. We are in the process of launching 

, a CD30-targeted antibody drug conjugate in relapsed refractory Hodgkin lymphoma and relapsed refractory systemic anaplastic large cell lymphoma.

	We try to focus our internal operations to deliver greater clarity, agility, flexibility, and focus around oncology, recognizing the different data requirements for many products in this segment as well as the growing importance of speed-to-market performance-which rests on our being able to anticipate the needs of market access decision makers at an early stage of development.

 Throughout our 35 years as a company, we have focused on areas of high unmet medical need, including orphan therapies and indications through an integrated approach to commercialization that maximizes the potential market opportunities as well as benefits to patients. For example, we have a product with official orphan-drug status for chronic immune thrombocytopenia, a serious blood disorder. In oncology, we recently launched a product for a type of acute lymphoblastic leukemia (ALL), which by standard definition would qualify as an ultra-orphan therapy.

	Overall, our approach in oncology combines both therapeutics and supportive care. There is a lot we can learn from companies that have built an exclusive franchise around rare diseases, but we also see that companies like Amgen, with a more diverse product portfolio, can leverage opportunities from this broader commercial presence, through the full product life cycle.

I currently work as a consultant to the industry on various pricing, reimbursement, and access issues around the world. Most recently, I headed the Market Access function for Genzyme's rare disease business unit. Prior to joining Genzyme, I was Pfizer's head of pricing & reimbursement, primary care business unit, and acted as interim head of market access for PCBU from November 2011 through July 2012.

The common thread is that many diseases are now moving toward the "rare" category due to the impact of personalized medicine and the enhanced targeting options available through companion diagnostics. How does the work that CB Partners is conducting on rare diseases conform to these company assessments of the "state of the art" on rare diseases? 

Monica Martin de Bustamante, CB Partners: 

The definition of rare disease has evolved. It is more fluid today-even in chronic conditions one can find a rare disease indication, especially as pharma and biotech companies work to differentiate their target populations for a particular therapy with clinicians and payers.

	The central question is why rare diseases have attracted strong interest from the industry. One factor is the high level of unmet medical need, which drives the focus on innovation. There is the reward derived from treating people who have few options, with special emphasis on the plight of vulnerable children whose lives can be cut short literally before they begin. Approval requirements and pricing and access challenges are markedly different, dependent on geography and the motivations of the various disease stakeholders interacting with industry. The small patient numbers place a premium on recruiting the right people for clinical trials as well as finding professionals with the knowledge to lead this work; both tasks get harder the larger the geographic remit in readying a global launch plan.

	Patient advocacy is a distinguishing characteristic of the rare disease space. Patients are a force of nature in rare diseases. Because many rare diseases are complex and the community of victims is often obscure, it falls on active patients to set the terms of engagement on everything from trial recruitment to access and reimbursement. Productive partnering with patient groups is central to market success.

	Much of the global agenda around rare disease was established with passage of the US Orphan Drug Act in 1983. The law sparked a surge in interest in these therapies, with more than 300 orphan drugs approved by the FDA after 1983 to date compared to only 34 during the decade prior to passage of the Act. Many countries have followed suit with their own rare disease legislation, including the EU, Japan, and, most recently, the emerging market countries-precisely where the industry is pinning most of its hopes for future growth. These are countries where payment conditions for medicines are difficult across the board, and especially so for rare diseases due to their association with nose bleed prices in the US and other affluent countries. Yet the long-term opportunities there are quite promising, if you do the required homework; each country is different.

	Another critical element is finding that sweet spot with payers. Here the landscape is shifting, from a situation where payers remained willing to accept a high price point due to the small size of the covered population. Pricing aside, rare disease drugs were considered to be products of "low budget impact." Today, payers are rewriting the contract with the patient, shifting costs to individuals through higher co-insurance, bigger deductibles, and tiered co-pays, with the highest contribution pegged to the most costly brands. Other tactics include heavy use of prior authorization to slow access as well as outright exclusions from drug formularies-we estimate that about 15% of rare disease therapies are currently not available to US patients enrolled in the Medicare Part D drug benefit program.

	In addition, the popular notion of "value" in drug therapy raises significant challenges in building the evidence base for a rare disease. It's frequently impossible to include an active comparator in your trial. Instead, you have to rely on a single-arm trial, probably at Phase II, due to the pressure that exists from patients to get the product to market quickly, because there is nothing else available. Yet that only makes dealing with payer expectations for metrics to demonstrate such "value" even harder. How can you prove a rare disease therapy is actually cost-effective when there is no accepted ICER (incremental cost-effectiveness ratio) to set a control group baseline against current treatments, where none such treatment exists?

	Overall, the access environment seems to be coalescing toward three destinations. The first is through establishing an incremental clinical benefit, which is what France and Germany are seeking to do, where products obtain access when patients experience a clinical gain against what is currently in the market. The value/unmet need consideration must precede a discussion on price. Next, you have the budget impact environment, which has traditionally been a positive path to access in rare disease because price times small volume sales limits exposure to payers. The challenge here is that more rare disease products are reaching the market just as payers are placing caps on drug spend. If you keep adding new products, while the overall budget fails to keep pace, cutbacks in access are inevitable. While it is commonly assumed that a rare disease drug justifies a high -even six-figure-price tag, is this a sustainable model going forward?

	The last-and toughest-environment is among those with a formal cost-effectiveness hurdle. The health technology assessment community is more comfortable with policies that earmark resources around broad chronic conditions like diabetes and CVD, when in rare diseases what works best is taking into account the level of unmet medical need. If a payer allows a discussion to focus on demonstrating clinical value, that's where you will see the best chance for access to a rare disease medicine. I see the cost-effectiveness argument being applied less rigidly, at least for ultra-orphan drugs that really have no alternatives. If such drugs offer a better quality of life, expressed over a five to 10-year span, that has to mean something to a payer.

	All of this leads to a key strategic question, which is whether the distinctive characteristics of rare diseases require they be addressed through a separate regulatory channel or, alternatively, be evaluated much the same way as drugs for other conditions. Based on what I just said, do we need a tighter definition of what is "ultra-orphan?" It is worth noting that while most countries have opted to recognize rare diseases as deserving of special consideration and support, this does not guarantee an accommodating stance on P&R and access. Likewise, is it a good idea to press emerging country governments to prioritize a commitment to rare disease? If we put ourselves in the shoes of governments, with high public health expectations and limited resources, does that make sense? In some markets we might say yes, while in others it might prove to be a non-starter.

	Finally, is it time for biopharma companies to refine their institutional approach to this part of their business? Do rare diseases require specialized expertise centered in a dedicated business unit or is it preferable to address the category through a therapeutic model?

	I am not sure the group can resolve these questions today but they, nonetheless, carry important implications for future success in this space.

Any comments on this overview of the issues? Will payers keep on paying? 

 We might be too complacent about budget impact. Even if we present decent cost-effectivencess data, if you cannot convince the authorities the budget will not bleed, you will not get access to reimbursement. More flexible analysis of cost-effectiveness should be adopted that balances other considerations such as equity, the rule of rescue, community values, patient needs, and the long-term costs avoided as a result of access to treatment. The process for assessing new therapies for rare diseases should be efficient, fit-for-purpose, transparent, and informed by community and patient values.

There is a basic disconnect between the pace of medicine innovation and the way our health systems register the cost of innovation. Technology is advancing to the point where, for example with the emergence of gene therapy, we are potentially close to being able to provide a cure for some rare diseases that originate in genetic abnormalities. The cost for such a cure in a rare disease would tend to be very highly priced. US payers then have to face investing a significant sum in a patient who may not remain within their plan long enough for them to accrue the full long-term financial benefits of such therapies. Patients in a US healthcare plan typically remain with that plan only for two to three years on average. Such new technologies are likely to have a profound effect on our healthcare system.

 The average annual profit margin in US managed care is about 1.5%, after tax. A big ticket, big population drug like 

 suddenly enters the picture, so what happens to United Healthcare, with its $110 billion of revenues? It just lost a full percentage point off its profits.

This is a reality for all approaches to financing healthcare. The UK NHS touts its lifetime cost of care health model, but the financial commitment is always contingent on the annual budget cycle. There is no systematic attempt to balance current liabilities against lifetime savings.

The industry must work harder to develop new payment models. An amortized risk exposure model is one interesting approach. It certainly has application to gene therapy, whose effects are truly long-term-if you can't amortize the cost, there is no sustainable way for society to pay. This is clearly on the radar screen, as a new gene therapy costing in excess of a million dollars per course of treatment is becoming a reality.

are diseases do not conform to geography. Given the structural financing issues we have just highlighted, which country markets represent the most compelling market opportunities? Is it still the US and the European Big Five? 

 Japan has to be included. It recognizes orphan indications and is willing to reward innovation for small patient populations. I also see potential in key emerging country markets, especially Brazil.

 To the extent R&D investment drives the rare disease space, pharma companies must rely on markets where pricing is sufficient to finance it. That includes, in addition to the US, the EU five, Japan, Canada, Australia, Brazil and Turkey. Despite the buzz, it remains difficult to build a core rare disease business around emerging countries.

 It really depends on the profile of each rare disease; in some countries, the incidence of a rare disease is disproportionately high due to the confluence of many factors, from epidemiology to the environment shaping the gene pool. The attention these diseases get from governments also matters.

The epidemiology profile is important. When I was at Genzyme, we looked carefully at the numbers for one of our key rare drug therapies, indicated for treatment of Gaucher's disease. The global population with this condition is estimated to be around 35,000, of which a good number are located in China, a market that presents significant challenges to diagnosis. We estimated that only 8,000 patients worldwide were being treated, despite decades of enzyme replacement therapy (ERT) availability. So where was everybody? The discrepancy led us to conclude the size of the affected population is probably overinflated. We had the opposite situation with Fabry's, another inherited genetic disease that is usually fatal at an early age. After diagnostic screening began for Fabry, we learned very quickly that the epidemiology data was lower in many places than what the diagnosis rate showed. The screening of newborns showed that this rare condition was actually quite prevalent in some countries. Maximizing market potential depends on getting the epidemiology right, at the start so that budget impact can be better determined.

 The challenge in rare diseases is that our understanding of epidemiology is constantly evolving, which complicates our ability to meet payer expectations about budget impact.

 It also affects the calculation of the payer: are we on the right side of the lump sum versus annuity equation? If a drugmaker treats a child with a rare disease at 18 months and that child goes on to live a normal life, that's an awesome annuity-for the child and for the drug company. But the good deal may not be seen as such by the payer, who has to bear the full cost of treatment over that lifetime.

I'd also like to point to the increasing reliance on clinical trial enrollment criteria in determining the label for treatments. Even in rare diseases for very small populations, epidemiologic data allows us to identify sub-populations with a distinct clinical phenotype that can lead to a restriction of access to therapy when a larger population may benefit but were unable to be included in the clinical trial. An example is treatment for certain patients with ERT. Because ERT's are unable to cross the blood brain barrier, they do not address the CNS component of the disease. If CNS symptoms develop significantly, it can force the discontinuation of treatment. Again, how do you build that into the predictable budget impact scenario demanded by payers?

 Finding balance around pricing for diverse indications on the same product is another issue. Payers tend to apply a blunt tool when it comes to pricing. Establishing value in each indication and negotiating the right price point for a later indication can adversely impact pricing for the broader population-how do we ensure there is equitable access, at the right price, for both groups? It requires a lot of internal debate about the exposure risk if you don't get this right with payers. There are various mechanisms that could be considered: forgo seeking a high price tag for the smaller rare disease population, or promote access through patient assistance programs and donations, to minimize the effect that a high ex-factory price might have on price negotiations for the much larger indication? There is no easy way to address this.

 Looking at the geographic spread, it's hard to make generalizations about rare diseases. I agree that the main market potential remains in the mature industrial markets, but there are some interesting twists. In sales of our hemophilia business, the US and the UK are at the top, but right up there with them is Iraq. And the Iraqis pay on a national tender basis; it's all government money and of course that also means some subsidization through independent donors and foreign aid.

 This implies a much wider range of stakeholder groups are involved in facilitating access to drugs for rare diseases-similar to vaccines?

Yes. Our outreach has to involve NGOs, foundations, international organizations, and governments. As innovators, we have to be creative in finding these non-traditional sources of funding.

ctually, creative funding is as critical as producing the studies to demonstrate clinical relevance and cost-effectiveness. You have to establish where the local funding stream is going to come from, right at the start of your commercialization strategy; certainly well before registration.

We have spoken a lot about price and access, but what about issues that relate to development, particularly cycle time to registration? Aren't you living in a charmed world? Certainly there is a perception that regulators like the FDA are very supportive of rare disease medicines. 

The FDA is usually quite flexible in the design and end point designations on clinical trials for rare diseases. It knows that reality requires some departure from the typical standard large population trial for CVD or diabetes. The key challenge is how this activity relates to the next step, which is obtaining patient access for an approved product.

It is widely assumed that, because rare disease trials usually involve a small group of subjects, it is cheaper to run them. That's not really true. Most trials that Shire conducts on rare disease have to be managed at numerous locations, across geographies. Finding qualified investigators is hard, especially outside the US, where major hospitals and other centers of expertise are often scarce. Here in the US, a patient we recruit might live 60 miles from a study center. In Latin America, that person can be two days journey or more away from the site. And as our trials often require children, there is extra overhead in including parents and other care-givers in the mix. Sometimes we have to move entire families to a trial site be able to get a patient to take part in a trial. This can be a complicated and costly process.

Determining the proper endpoint for a rare disease trial is a process in itself-what are you actually testing? You cannot depend on the FDA to make that call for you. It has to be built by you, with the help of top experts in the field, with a design that can be validated through to final regulatory approval. We had to pioneer the development of a validated clinical endpoint for DMD-the six-minute unassisted upright walk-working with the DMD community. The endpoint has since become the standard for other DMD clinical trials.

 Most rare disease patients lack treatment alternatives; usually, their condition is life threatening, and many of these patients are children, too. The result is strong resistance to being in a controlled blinded study where there is an even chance of the patient getting the placebo. What does this mean for the sponsoring company? Your trial is essentially competing with compassionate use programs. That's the goal for a desperate parent-you don't want your sick child to be in the placebo cohort. From an approval perspective, it carries a real implication. The access you give to a half dozen children can skew the findings and delay getting the test drug to market, where ultimately many thousands of children will benefit.

 Is there an easy fix from regulators to allay such an outcome? 

The early access model applied in some European countries-like France or Italy-is an approach I'd like to see adopted in the US. Your ROI begins a little earlier, patients get quicker access, and it facilitates finding a sustainable price level, while not compromising the implementation of fully validated trials required for regulatory approval.

The other approach being tested in the EU is adaptive licensing, which is now the subject of a pilot program-involving several rare disease compounds-administered through the European Medicines Agency (EMA). The essence is to merge the interests of regulators and payers by granting contingent marketing rights to a drug developer in return for a commitment to additional testing-in short, coverage with evidence development (CED). So the company gets access, it conducts studies according to protocols approved by payers, and the payer can apply the results to negotiate a final market price or change the terms of access. I would say discussions are still tentative, largely because national reimbursement authorities are hesitant to devolve their responsibilities on price and reimbursement.

It's hard to see any real incentive for industry to play the adaptive licensing card. Most government participants view it as a way to short producers on price. Certainly, prices are never going to rise in response to real-world evidence that proves a medicine delivers what it promised. There has been discussion by certain governments of allowing the price to come up to an appropriate level, but the "launch price" would be lower than that.

 Is there any market where we agree the stars are aligned toward doing things right in supporting rare disease innovation that delivers for patients? 

(Editor's note: the entire group agreed that France presents "an interesting dynamic.")

 The French ASMR rating system puts a metric value around societal unmet need in a way that other markets do not. It accepts the idea that if there is no treatment available for a rare disease, and your medicine offers a chance for clinical benefit to the patient, then value is demonstrated.

France was one of the first countries to single out rare diseases with a comprehensive national action plan. That plan has been amended several times to keep pace with the science.

 In France, there have also been some new developments. The most important is a new rule requiring that any medicine costing more than €50,000 a year per patient undergo an intensified budget impact review. This is a key consideration in developing an early access plan.

Is this trend likely to spread to the US? Will the Patient Centered Outcomes Research Institute (PCORI) end up serving as a cost-effectiveness watchdog on rare disease drugs? 

 I sit on PCORI's rare disease panel. PCORI is not authorized to consider any issue relating to pricing or cost of therapy, except when it relates to direct patient out-of-pocket costs. There would need to be a significant political shift in the US to introduce cost-effectiveness criteria as used by many other other countries.

 Is the industry neglecting any useful arguments to justify the pricing of rare disease medicines and strengthen the value proposition behind them to patients and payers? 

Medicines for rare diseases amount to only about 2-5% of overall drug costs in the US and Europe. The budget impact is manageable and it supports a lot of innovation in areas of high unmet medical need, whose benefits are incalculable over time.

The improvement in quality and productivity from medicines innovation, including the life years gained, as well as the general societal benefits that derive from this, are components of value that are usually overlooked. The math is always built around the next budget cycle. This is the psychology that we have to change.

We need to consider how we communicate the price of our products. We have seen the 

example where there was pushback about "a thousand dollars per pill." However, when you consider the cost to treat HCV it may have been perceived differently. Communication and framing of the drug price may have helped them. In an ideal world, it would be great if we could move away from such a focus on price per pill, per vial, etc. We must think about what it takes to have better health outcomes for patients more than counting up vials and pills. However the existing infrastructure is focused on units, so a lot of work would be required to remove the limitations of existing billing and coding systems, especially in the US. But, at the end of the day, the focus should be on delivering results for patients.

 There is another issue hiding in plain sight-soaring company valuations and the rich premiums being paid for licensed products. Pharmacy benefit managers (PBMs) and insurers think that if a drug company has just paid several billion dollars essentially to acquire one new product, that company is going to have make a lot of money very quickly. True or not, it's a perception.

The patient can serve as an important intermediary to this discussion. Clearly, patient organizations are critically important in focusing attention-and research dollars-on rare diseases. What is the current state of the industry's relationship with patient advocates? Are we in the midst of any significant changes in the way the two of you interact? 

A trend is the discomfort of some payers about overt efforts to mobilize patients as advocates for rare disease treatment. This is particularly evident outside the US. In Europe, for example, patients are still not perceived as a social partner in health, deserving of a seat at the negotiating table. Despite this, patients have in fact become far more global in orientation. In the hemophilia space, chapters of the Hemophilia Foundation have spread to virtually every major country. Local groups can be mobilized quickly on behalf of issues that impact patients.

Our experience in DMD underscores the critical importance of patient advocacy. Organized patient involvement clearly helped push our technology over the registration line by highlighting the enormous unmet need and the natural history of this fast progressing disease. That in turn spurred support for the widest possible access to the drug. I would add that we were able to leverage the passion and awareness of the Duchenne patient community to accelerate recruitment to our clinical trials on the basis of the right genotype.

 Rare diseases are an exception to the fact that in most of the large therapeutic areas, patients remain an afterthought. Patients have not been fully integrated to the FDA approval process, even though recent legislation mandates more consultation. There is a need to apply the positive lessons we have learned in rare diseases to the broader arena.

 The Parent Project Muscular Dystrophy, a family-centered network, recently funded a benefit-risk assessment survey-involving approximately 120 caregivers-that was designed to measure their tolerance for potential benefits and risks of emerging therapies for DMD. Most patients with this relentlessly progressive and terminal disease will die in their 20s or 30s. Preserving patients' muscles and abilities at any stage of the disease is valuable to the caregivers. The insights from the survey have gotten the attention of the FDA and may inform its decision making as it reviews potential therapies that slow or stabilize progression of the disease.

Articles

Features

Expert panel on rare disease highlights the challenges of serving expectant patients in this uniquely complex market access environment.

What’s Real in Rare Disease: A Pharm Exec Roundtable

NOTHING IS AS DESTRUCTIVE TO B2B JOURNALISM

 as slaking the thirst for content from the same familiar well of sources. It is particularly harmful in healthcare, a sector composed of many separate parts, whose isolation is reinforced by the guild-like behavior of professional medical practice; a historically dependent and hugely uninformed patient population; and government regulations that reward narrow episodes of care rather than broader health outcomes. In fact, even after decades of progress in the use of drugs against diseases, in some circles it is still debatable as to whether our chosen business even qualifies as a health service.

	The ongoing struggle to define the proper place of pharmaceuticals in healthcare is evident in the pages of this month's issue. We segue from the global obsession with compliance standards, in which the inducement to prescribe is seen as behavior fraught with serious ethical implications, to the cover feature on the 2015 HBA Woman of the Year, Denice Torres of J&J. Her steady rise in the executive ranks is due to a dedication to changing that negative perception by fostering public trust in the company's products: where the simple act of opening a bottle of pills is a seamless-and tension-free-act of individual consumer empowerment.

 is moving in the same direction, seeking ways to diversify our content through better connections with stakeholders in adjacent, non-traditional parts of the global health community. A vital driver of this effort is 

's Editorial Advisory Board (EAB), 31 experts representing nearly all segments of the modern healthcare enterprise as well as numerous geographies, from Russia to India to Canada as well as the US.

	This year's EAB meeting was held on Feb. 25, hosted by Dr. David Nash, Dean of the Thomas Jefferson University School of Population Health in Philadelphia, and a leading expert on this most externally driven, integrative approach to health management. Population health is founded on the assertion that 20% or less of an individual's well-being depends on the formal health system. Despite the vast amounts of money spent on acute care, where you live-your zip code-is a more reliable indicator of health status, along with family background, gender, and education, all of which tend to encourage reliance on lower cost preventive health behaviors.

	Founded in 2009, the School's mission is to create leaders for the "no outcomes, no income" healthcare system taking root in the US, with an annual budget of $6 million that funds five separate masters degree programs for 300 students from 30 countries, many of whom are practicing physicians interested in managing ACOs and other emerging players in financing and delivery. The School also has an active research program, with support from key industry players like Janssen and Eli Lilly.

	Nash and the EAB members underscored the need for more industry cooperation with the population health community around an evidence-for-outcomes research agenda. "In population health we have tremendous analytics capabilities. It's in the interest of the R&D industry to make better use of the data to structure how the next generation of health decision-makers approaches the allocation of increasingly scarce resources. If you don't, others will do it for you," Nash told the EAB.

	For more on Nash and population health, refer to our cover profile in 

pharmexec.com/population-health-call-community

). Nash stands out as a restlessly inventive and colorful anomaly in a sector marked by gray shades of careful circumspection-and if you require proof, check out those socks in the group photo at below.


	EAB members, seated (left to right): Kristen Spensieri; Sanjiv Sharma; Kenneth Kaitin: Joanna Breitstein: Dr. David Nash; William Looney; Dr. Graham Hughes; Michael Swanick. Standing (left to right): Les Funtleyder; Michael Ringel; Murray Aitken; Mason Tenaglia; Bob Jansen; Rajesh Nair; Terry Hisey; Joseph Truitt; Terese Waldron; Peter Young; Rob Dhoble; Bernard Lachapelle; Frederic Boucheseiche; Don Creighton; Ian Wilcox; John Furey (Photo: John Halpern)

From the Editor

Learnings gleaned from our annual EAB meeting, hosted this year by Dr. David Nash, Dean of the Thomas Jefferson University School of Population Health.

The New Health: Navigating with Nash

	Following last month's historic approval of Sandoz's biosimilar 

 as many as three more biosimilars could get FDA nods in 2015. As we await the inevitable, 

 decided to examine five additional issues that warrant consideration.

1.) Levels of acceptance: Extrapolation, interchangeability, and switching

, now has the FDA's OK for use across all indications included in the reference product's label. The "extrapolation" across all of the innovator drug's approved indications is one notable win for biosimilar makers. Running trials for each disease state would be costly. A formal designation of interchangeability from the FDA will be another step as drugmakers, payers, doctors, pharmacists, and patients will contest a power struggle over whether a script can be transferred to the biosimilar and how. Current state legislation for biosimilars (both passed into law and currently before various state legislators) regarding substitution, notification, etc., is widely varying. 

	Biosimilar makers will go for one additional level of acceptance to be fully ingratiated into the marketplace-switching. But until switching studies can show that a biosimilar does not raise the incidence of an immunogenic response, expect physicians to be extremely hostile to the idea of switching a patient who is being successfully treated by the innovator. For a good while, biosimilars will be limited to new patients.

2.) Some biosimilars might be better, others might seem better

	The mindset surrounding biosimilars is that they will be a lesser version of the original. But in some cases, the biosimilar might be superior to the innovator product. The question comes down to variability, which is the whole reason we're sticking to the term "biosimilar." Biosimilars will vary from the innovator drug and, consequently, may have lower efficacy, greater safety concerns, and increased immunogenicity. But biologic therapies have considerable variation already. On top of that, physicians will speak of a perception of variation over time that exists. Statements like "2005 Humira is different from 2015 Humira" are not uncommon. And it's human nature to make judgments based on anecdotal evidence-doctors and patients included. Be prepared for case study "evidence" and trials of small numbers. Expect headlines saying biosimilar X is less expensive AND better! A headline like that could go viral.

	Speaking to physicians, you see some surprisingly divergent views on biosimilars, some being very open to use and others are much more cautious. Clearly, advertising and education campaigns will be necessary, and to "facilitate" doctor acceptance, there will no doubt be payer pressure using mechanisms like formulary exclusion. For now, the mindset is the same for physicians with biosimilars and biologics. When a patient is doing well on a treatment, don't change them. And once a response is lost due to immunogenicity, it is lost forever. New patients will be a different story.

4.) Trends driving acceptance-and the Sovaldi context

	For the last few years, estimates for the likely range of price reduction for a biosimilar drug have been 25%-30% compared to the innovator product. So news out of Norway, that Orion Pharma is offering a 72% price reduction for 

, the infliximab biosimilar via the nations' tender system could cause a "shock wave," according to Joseph Fuhr, Professor of Economics, Widener University. This could give other groups in the European Union and US the gumption to demand significantly greater reductions.

	Several regulatory issues remain, one being nomenclature standards. 

's approval came with a placeholder nonproprietary name, filgrastim-sndz, rather than certainty on the issue. Hopefully this, and some other questions, will be answered once the biosimilars truly start to complicate markets. Five tumor necrosis factor (TNF) inhibitors is a complicated market already. But start wrapping your head around two or three, and eventually five or six, products for each molecule.

	Timing into markets could also be key. Unlike with innovator drugs where "first to market" can be crucial, biosimilars may see a second-mover advantage. Sandoz is taking the brunt of costs not just battling the innovator company in courts but also navigating the nebulous FDA. It will be interesting to see if Apotex's pegfilgrastim can enter the market using benchmarks set by Sandoz. But considering the many complexities and the potential massive systemic cost savings, can anyone blame FDA from taking its time for further guidance? Rather be late and right, than early and wrong.

Although the strategic hurdles of biosimilars market entry are not new, the task of imitating substantially more complex molecular entities offers up a host of new operational questions for pharma.

Biosimilars in the US: Five Potential Sticking Points

	At her Catholic high school graduation, Denice Torres sat near the back of the auditorium, separated from peers who received high academic honors. The Indiana native must have struck an image: sandy-brown hair, athletic build, light hazel eyes, and a demeanor bristling with ambition. As she listened to speakers onstage in the spotlight, Torres remembers thinking, 

. That refrain from her 18-year-old self still echoes in her mind today.

	Growing up in the grimy steelmaking citadel of Gary, the middle child of a Polish mother and Hispanic father, Torres quickly learned nothing would be handed to her. In an upbringing she describes as lower-middle class, fear mixed with hard work kept Torres, her older sister, and younger brother, focused on the world beyond their neighborhood. A huge industrial plant sprawled through the lot across from her family's three-bedroom house, while abutting their property stood the Careful Car Wash.


	Denice Torres, president of Johnson & Johnson's McNeil Consumer Healthcare division, celebrates with her team. (Photos: John Halpern)

	Torres' father, Joe, worked in the US Steel mills. After retiring, he became president of Gary's public school system, the first Hispanic person to do so, which, she points out, was no easy achievement at the time. After raising three children, Torres' mother, Joan, wanted to do something for herself. Torres compares her mother to Maude Findlay, the namesake character of a Norman Lear television sitcom from the 1970s, who was an outspoken liberal and women's rights advocate.

	Joan got a job performing non-clinical tasks at the local hospital in Gary while earning her nursing degree at night. After graduation, she became one of the first certified school nurse practitioners in Indiana, another milestone for the Torres family. Joan spent a career serving disadvantaged kids in Gary's inner city schools. Besides her mother, Torres remembers her maternal grandmother, Genevieve, as a strong female role model. With only an eighth-grade education, Genevieve climbed the ranks to become assistant manager of a local bank.

	Both parents instilled in Torres a sense of duty and service to community. Even with a strict focus on education, humor imbued the Torres family. Torres remembers mariachi music blaring at her paternal grandmother's house, where fresh tortillas were often fried on the griddle. At her maternal uncle's house, she heard accordion music and family stories. Dancing happened spontaneously and often.

	Within this upbringing, sports played a major role for the young Torres. "There was no 

 at that time, and so my strong female role models were women in sports," she says. By the time she was a junior in high school, she'd set her sights on a basketball scholarship and possible coaching career. Torres also continued to test her stand-up comic skills on the toughest audience-her family.

	Humor has often been the refrain in her role as president of Johnson & Johnson's McNeil Consumer Healthcare division in Fort Washington, PA. "I'm very funny, I have to say," Torres says, in her characteristic deadpan manner. In high school, Torres was voted most athletic and funniest.

	She earned a basketball scholarship to play at Saint Joseph's College in Rensselaer and played freshman year before blowing out her knee. She then transferred to Ball State University in Muncie. But Torres is grateful for the way things played out because it set her on a fast-moving path toward success.

	With extra time in her schedule, she enrolled in a psychology course and immediately fell for the subject. She changed majors and began soaking up lessons on human behavior and emotion she would use decades later in managing people and teams.

	During her junior year of college, Torres visited a VA mental hospital as part of a class project. "It was the first time I was exposed to extreme mental illness," she says. Torres enjoyed figuring out how people respond in different situations, but a career as a psychologist did not kindle her passion. Since she was brought up to value education and hard work, she turned to a career that required both: law.

	"I still remember opening that letter from Indiana University's Maurer School of Law," she says. The university awarded her a full scholarship. The analytical aspects of law captivated Torres and some of her most memorable academic studies happened while working together with her peers.

	After graduation, she joined a Michigan law firm specializing in worker's compensation and medical malpractice. Over time, Torres realized that "the nature of law, and being a lawyer, means inherent conflict." For the former point guard basketball player, who valued playing and winning as teams, the individualistic environment in law did not feel like the best fit. At the same time, Torres noticed her favorite cases involved those with medical issues or components. She tucked this revelation away.

	By this time, Torres was in her late 20s, and felt uneasy that she had not settled into a career. "But I also realized how much being uncomfortable can prompt us to do positive things. Without discomfort-and listening to that discomfort-in our lives, we tend not to change," Torres says.

	Torres decided to answer a newspaper job advertisement as an account executive for a marketing and advertising agency. Even without marketing experience, the firm hired her immediately. "From Day One, I saw this group of creative, passionate, perfectionist people, working together as a team to give the best customer service, and I thought, 'This is me,'" Torres says. In her spare time she read copious amounts of marketing and research books and articles.

	But something was still missing. Torres wanted her credentials to match her passion. She applied for University of Michigan's MBA program-one of the most competitive in the country at the time-and got in. As a 28-year-old business school student, Torres knew she'd found her niche.

	She applied for a summer internship with Eli Lilly's Indiana headquarters and was assigned to help promote the company's then brand-new drug 

(fluoxetine). Lilly offered her a job in product planning and development at the end of the internship. One year later, she became a sales representative for 

. She quickly learned how she could differentiate herself from all other sales reps who came through clinic doors (and who were not always welcomed). "I started making personal connections with the receptionists. Instead of being the Ceclor rep, I became the person with the cute niece who was just born," Torres says.

	Following her time on the sales front lines, she was promoted to market research manager within special projects. That is where she met Allen Clark, her first mentor and person who would have the biggest impact on her professional life. Clark directed Lilly's North American operations at the time and took Torres under his wing. The 37-year-old Torres was sometimes intimidated by the towering 6'3 Clark, who talked bluntly in his native Scottish brogue. "He was tough on me, but he believed in me," Torres says.

	A turning point in her career arrived unceremoniously one afternoon just before Clark headed into a meeting to announce a new incoming director. "I remember he caught me in the hallway, pulled me aside, and said, 'I'm promoting you to director of marketing studies-now come stand next to me when I make the announcement,'" she recalls. Torres spent 18 months in that role and oversaw a reorganization of the department. In the process, she learned about re-engineering business processes and change management.

	Satisfied with her work, Clark promoted Torres again, this time to direct the sales and marketing department of human growth hormone products. In her initial meetings, Torres stayed quiet on the sidelines. Clark stopped her one day in the office and sternly told her that she had been promoted so she would speak her mind and share ideas with the other directors at the table, who at the time were all male. "I felt free because he believed in me," Torres says.

	Clark, like Torres, believed humor to be an important part of the workplace. He often injected chuckle-worthy mantras into conversation, such as, "When it's all said and done, there's more said than done," Torres remembers.

	With her self-confidence flourishing, Clark then tasked Torres with turning around Lilly's failed osteoporosis prevention drug at the time. To set her team up for success, Torres compared the processes of revamping, marketing, and selling the drug with summiting a mountain. She realized metaphors like this could help a team stay goal-oriented and keep track of progress and what still needed to be done. From there Torres moved on to executive director of Lilly's global operations, primarily for 

 (olanzapine), a franchise then worth $5 billion. She enjoyed the challenge of creating clinical and commercialization plans, but missed working with profit and loss on the business side. Underneath it all, Torres missed something else in her life, too: the self-acceptance required to be her authentic, whole person.

	Torres signed up for a seven-day Outward Bounds backpacking trip in California's Sierra Nevada. At the start of the expedition, she and others received fully-loaded 60-pound backpacks. Throughout the trip, they learned how to empty not only their physical packs, but also emotional baggage. "I was really hurting on that trip," Torres says. "I was overwhelmed by the beauty of the mountains and realized I had to find a way to be true to myself." A couple years later, Torres took the first steps of opening up to her colleagues. Before a communal work event, a colleague asked Torres if her partner, Kim, would also be attending. Torres explained that Kim had to work; it was one of the earliest times Torres talked openly in her professional environment about being gay.

	Torres did not know that all of her toughness, hard work and grit would be rigorously tested in 2000 when her daughter, Sierra, was born. Sierra was born at 30 weeks of gestation-about two months too early. She weighed two pounds and 10 ounces. Torres and her partner endured a harrowing three weeks while Sierra stayed in the neonatal intensive care unit. "The person I am today has so much to do with what happened to me during that time period. It changed me forever," Torres says. "Either this was going to be the worst thing that had ever happened, or this thing of gratitude," she says. Bit by bit, doctors solemnly relayed grim updates to the parents. Sierra had cerebral palsy, hearing loss, and epilepsy. She would be confined to a wheelchair for life. "I just wanted to be this girl's mommy," Torres says. Finally, she took Sierra home. "I remember the first time I went to get diapers," Torres recalls. "I was strutting down the aisle like John Travolta because I could buy diapers for my girl."

	When Torres returned to work, things had changed. Not everyone understood the need for her extended absence and the magnitude of what she had endured. "I developed this empathy for people going through challenges at work," she says. The experience taught her that a company is truly the sum of its people. "It is important to support people in their greatest time of need," Torres says.

	In 2004, Torres hired on with Ortho McNeil Neurologics as vice president of marketing. She once again began her fast ascent through positions of increasingly demanding responsibility and leadership, and was brought in as president of J&J's McNeil Consumer Healthcare division in April 2011.

	At the time, J&J was hurting from product recalls and would soon enter a consent decree with the FDA over its children's 

products from the market at the first sign of trouble during this time, Torres points out. From a safety standpoint, it was the right thing to do, she says. Early in her career at McNeil, Torres decided she would put certain processes in place so that 

would emerge a stronger and better brand and product. "If you look at previous situations, like the cyanide 

 scares of the 1980s, you can see that innovations like the first safety seals on products came from that time period."

	Torres regularly evokes the J&J credo, which includes Do the right thing and Keep your promises. "When I came into this role four years ago, I realized that we had to get back to our roots," she says. "Our mission is to deliver premium healthcare solutions with an unparalleled healthcare experience."

	Early on in her role at McNeil, in an unorthodox style typical for her, Torres visited pharmacies and drug stores to hang out in the OTC medications aisle to observe customers. She remembers watching an older couple compare bottles and flip labels back and forth. After some time, the couple finally went to check out. But, Torres says, they eventually came back to the aisle because they were still unsure. "That always stuck with me," Torres says. She often explains to her team what the average person in the U.S. earns per year and what the same person spends on healthcare. Even an OTC drug that costs $8 is a big purchase for many people, Torres points out. "We have to differentiate ourselves by making the experience as near-perfect for them as possible," she says. This starts with the packaging on the outside, the instructions inside the packaging, the pills, the bottle, and opening the bottle itself. "After a purchase, I want consumers to say, 'I didn't expect that-that delighted me,'" Torres says.

 is one of J&J's most recognizable brands, but also one that has had to endure multiple crisis communication situations and quality control challenges, starting with the initial cyanide poisonings in the 1980s. In 2012, McNeil recalled nearly 600,000 bottles of infant 

 due to uneven dosing that resulted in too much or too little active ingredients. In 2009, two years before Torres' arrival, McNeil recalled some 

 brands after a wood-treatment chemical showed up in the medicine, causing nausea, vomiting, and diarrhea. During her first two years, Torres spent time restructuring and rebuilding "in the basement" with foundational aspects of the products. She worked on turning around processes and capabilities within the company. "This work is not sexy," Torres says. But the work cannot be shortchanged "because the strength of the foundation will be the strength of the house," Torres says.


	Torres' leadership has been integral to the turnaround of Tylenol.

	Alex Gorsky, J&J's CEO and chairman, has observed her financial acumen and bold leadership style for many years. "Denice takes a 360-degree view when it comes to assessing and making business decisions," Gorsky says, adding that the best leaders "bring unique perspectives, courage, and a tremendous amount of compassion for people. That's Denice."

	As part of the Tylenol turnaround, Torres saw a need for more frequent communication throughout her team of nearly 1,000 directors, managers, and staff. So she started a twice-weekly group meeting called Fireside Chats in which she would meet with different departments. She also started a biweekly town hall meeting event in the building's auditorium open to all employees, who could share their thoughts and ideas, and hear priority updates from Torres. Torres visits the manufacturing plants on the McNeil campus herself. She asks the managers to take her on a "Points of Pain" tour so she can know what changes need to happen where and when.

	"Denice will always tell the truth -she is all about straight talk," says Natasha Zuyev, vice president, consent decree, McNeil Consumer Healthcare. "She helped my team reach our goals by creating a collaborative and caring environment and prioritizing consent decree work above everything else."

	Torres says she taps into psychology lessons by regularly checking in with her team to know where they stand on the emotional journey that parallels a product turnaround. She tells them what to expect during the next stage and how people might deal with frustrations. "Denice has led McNeil Consumer Healthcare through transformational change with exceptional results," says Peter Fasolo, vice president, global human resources, J&J. "She brings an unwavering commitment to authentic leadership and is a role model for proper work-life balance."

 products have made a complete recovery, Torres hesitates. "They are doing very well, but I would not say they have recovered completely," she says. The pediatric OTC share has significantly increased and will likely fully recover, she adds. J&J, in her mind, remains one of the strongest global pharmaceutical companies. Worldwide consumer sales were $14.5 billion in 2014, Torres points out. The company had global sales of $74.3 billion in 2014, an increase of 4% over the previous year, according to a J&J spokesperson.

	If Torres had to name only one passion, it would be providing support for and advocating on behalf of women to take on more leadership roles in the healthcare industry. The message may be heard often, but it's true, women must be their authentic, total selves, she says. "I know what it was like when I was trying to be another person," Torres explains. She encourages employees to wear whatever they wish at work-whether it's jeans or a suit-because people must feel comfortable when they are working.

	J&J does a tremendous job of hiring a diverse workforce and reflects the general population make-up better than most Fortune 100 companies, Torres says. But until more women are in leadership positions, the need for female executives must be prioritized and improved upon, she adds. Women must embrace the fact that they may feel insecure at times-but everyone is insecure, Torres explains. The notion that no one is perfect, and no one needs to be, should be communicated more often to women in the workplace, she adds. "Diversity is ideas, ideas are innovation, and innovation is what makes a company successful," Torres says.


	Women in the Workplace: A View from Europe

	"Denice's authenticity, transparency, and emphasis on fostering collaboration and mutual accountability for outcomes create an environment where people feel stretched and supported at the same time-and the business results follow," says Sandi Peterson, group worldwide chairman, J&J "She leads with energy and clarity of purpose in every situation and has a real talent for connecting with people at all levels of the organization. She has served as a mentor and a sponsor to many people at J&J, and has had a wonderful impact on many careers."

	When she looks back on her career, Torres wants to leave a legacy marked by helping others be their very best self -from self-acceptance to self-celebration. "I am resolute in the belief that by being bold and helping others realize their potential, amazing things happen for everyone," she says.

is a freelance healthcare writer. She can be reached at 

Pharm Exec profiles the journey of Healthcare Businesswomen’s Association 2015 Woman of the Year, Denice Torres, whose career demonstrates that doing right starts with finding-and being-yourself.

HBA Woman of the Year: J&J’s Denice Torres

	Compliance, across all industries, thankfully no longer occupies its 1980s position as a "corporate backwater." Back then, a senior banker recalled for the

 (FT, April 24, 2014), the compliance specialist at one London firm "was also charged with looking after the boss's wine cellar," such was the general vagueness and perceived irrelevance of his nominal role. In pharma around the same time, a chief compliance officer (CCO) was a rare commodity indeed. As Ilyssa Levins and Eve Costopoulos write on the 

 website, before the late 1990s, US companies, for example, simply formulated their business practices on their understanding and interpretation of an anti-kickback statute that was exceptionally broad.

	In banking, what the FT calls "the tsunami of regulatory initiatives" that followed the 2007–2009 global financial crisis saw compliance move out of the shadows and toward center stage. Transported through time to 2013, that 1980s banker would no doubt have been astounded to hear a major UK bank (HBSC) announce its plan to hire more than 3,000 compliance officers.

	Pharma, of course, has also intensified its compliance activities in the last few years, even if this has been, as with banking, as much a reaction to external regulatory and legislative pressures as a desire to get its house in order.

	Recently, we have seen the rollout of the Sunshine Act's Open Payments database and the European Federation of Pharmaceutical Industries and Associations' (EFPIA) call for its 33 national member organizations to disclose details of payments made to named individuals and publish them in open registries by 2016. Add to these initiatives a growing emerging market crackdown on bribery and corruption, and it's fair to say that compliance is an industry hot topic. The Economist Intelligence Unit has predicted that more than 70% of pharmaceutical sales this year will be made in countries with transparency regulations. And aside from GlaxoSmithKline's widely reported woes in China, pharma companies are currently under investigation for corruption in countries as unlikely as Syria, Iraq, and Lebanon.

wrote that compliance "is no longer just a box to check-its strategic function within the organization is more important than ever." By extension, we added, "chief compliance officers are gaining momentum and have moved from the background of business operations to the foreground."

	So, two years on, can we confidently say things have moved on for the CCO?

	For David Eves, director of medical affairs and compliance at Chugai Pharma UK, there is a much greater understanding across companies of the centrality of compliance to everyday business activities such as the separation between promotional and non-promotional activities. "Everyone knows the importance of the Code," he says. "No one has come to me recently and said 'Can I do this? I'm not sure if this is within the scope of the Code.' Everyone knows what they 

 do. But there's a general view now that compliance should not be a business disabler-it should be about finding solutions. There's an increasing awareness that it's vital to be an ethical business that is top-down, bottom-up and about perception."

	However, Garineh Dovletian, chief risk officer at The Medicines Company (Parsippany, NJ), a mid-size pharma focused on the acute/intensive care hospital market, believes the boundaries of what fall within compliance are less clearly delineated than they were 10 years ago. "I find it harder to define where compliance begins and ends," she says. "I can recount what the Office of Inspector General (OIG) guidance says, or what the US Sentencing Guidelines say, or what the Organization for Economic Cooperation and Development (OECD) says about what the role should be, but that's just the starting point." Whether it's working with finance and procurement team in terms of Foreign Corrupt Practices Act (FCPA) compliance and proper controls, or with clinical team and activities surrounding research and post-approval, Dovletian believes the role of the compliance officer is getting broader.

	But is it taken more seriously? On this point, Siemens' CCO Dr. Klaus Moosmayer told C5's online blog (September 2014): "I am optimistic, but I'm not naïve ... we are certainly not at the end of the way to achieving this." He said that the question of whether compliance is seen as bringing business value is still a developing topic. Even now, the major day-to-day challenge of a compliance officer is getting support from middle management. Dovletian agrees: "If you don't have buy-in from the organization's mid-level leaders, you're dead in the water from a compliance perspective," she says. Mid-level managers are close enough to their employees to set the tone of the day-to-day operations; getting their backing is an issue that, for some companies, still needs more attention.

	These struggles are endemic, however, and, perhaps, to be expected; after all, most heads of department have to be inventive in getting their organization on message. For Polaris Management's Marc Eigner, a vendor who has long worked with pharma compliance departments, CCOs are now more ensconced in the c-suite than they were a few years ago. He points to the rise of Actavis head Brent Saunders, who began his career in pharma compliance. "To see someone with a compliance background become CEO sends a clear message," he says. Much of the CCO's increasing recognition has been down to importance of commercial compliance. "In the past, the commercial aspect of compliance was not as big a deal to the CCO as, say, manufacturing compliance or government pricing," says Eigner. "But now we're finding that it has become the most significant part of the CCO role."

	Data from the PwC report Compliance in 2025 reveals that 84% of pharma companies now have a CCO, reporting directly to the CEO. PwC's Sally Bernstein and Andrea Falcone picture the CCO as "the c-suite star of 2025;" by that time, they write, "the chief compliance officer will sit right at the very center of the seismic shifts reshaping business [and] will be a much closer confidant to the CEO, a permanent member of the leadership team, and a sought-out risk advisor when strategies are being set. Their voice will hold sway, and their wisdom will contribute to the resilience of the organization."

	That all sounds promising, but 2025 is still 10 years away; in the meantime, many compliance departments do still have mountains to climb-even the biggest of big Pharma is a long way from matching HSBC's pledge for 3,000 compliance officers. Mid-sized Mundipharma, for example, has one full-time compliance officer and 11 part-time. But The Medicine Company's Dovletian resists the urge to differentiate the compliance officer role based on the size of the organization. "We're a company of approximately 700 people and we have the same kind of transactional complexity as you would in a large company," she says.

	From a compliance-solution vendor perspective, Eigner agrees: "You might think it is harder for a small company with a smaller budget to get a compliance system in place, but the reality is they have far fewer roadblocks." Big companies may have larger budgets, but they also have "many more systems and many more people who have been used to doing things the same way for 30 years." Consequently, explains Eigner, getting things done in a big company can involve a lot of politics.

	Eigner notes how, in smaller companies, customer master systems and finance systems are often "in their infancy," so getting the requirements embedded into these systems upfront can be easier. He points to venture capital-backed pre-approval companies "that are automating the entire end-to-end engagement process even before they have a product." If you're a specialty pharma company that wants to eventually be purchased, "the one thing that can thwart your chances is the threat of a $2 billion CIA or FCPA violation."

	For Dovletian, it is "a bit naïve to define the CCO job based on the size of the organization. Whether you have one transaction or 100, you still require competency to do it right." Indeed, a big company could still be confined to one therapeutic area in one market and have a simple structure. But a smaller firm like The Medicines Company, Dovletian explains, is active in many different countries, many different therapeutics areas, and in different phases of development. Consequently, like the biggest pharma companies, it needs a compliance strategy that can be effectively rolled out globally.

Is a global compliance strategy possible?

	With regulation of the disclosure of healthcare professional (HCP) spend an increasingly cross-border activity, the question remains of whether a global compliance strategy is really achievable, particularly in high-risk markets such as Syria, Yemen, or Russia, for example.

	"It's very hard to manage a customized approach to each country," says Dovletian. "So templates should be standardized, and a code of conduct should apply consistently. You need to give people some predictability; if you want adherence to process it can't be too disjointed." Dovletian advocates the "grandmother test" as a "go-to test that can be applied consistently" across borders. Basically, you ask yourself the question: "How would I feel about a certain activity if it was affecting my grandmother?" This "helps you think a little more carefully about the long-term impact of your activities," she says. But, she adds, if there's a will to circumvent, it will happen no matter how strict the rules are. "If your incentive structures reward behavior that encourages short cuts or is aggressive, you're putting people in a day-to-day dilemma."

	The global-standard theory sounds sensible enough, but in practice there remain significant obstacles to streamlining compliance across borders. Europe alone presents enough challenges to keep compliance officers awake at night. Inconsistencies across the region in terms of definitions, templates, and, not least, languages and cultures, will make the integration of the new EFPIA code something of an ambitious task to say the least.

	Central to how a European country responds to new disclosure requirements depends on its "historical baggage," says David Eves. "If you look to Scandinavia and the Netherlands, those countries appear to be more OK with transparency, but elsewhere this can create a major concern at a personal level." (The Netherlands' national body, Nefarma, had set up its central database and published its first register by April 2013, more than three years ahead of the required EFPIA deadline). One senior UK compliance officer commented recently that Central and Eastern Europe (CEE) is the region that "makes me most nervous." She added: "Everyone has a moral compass, but trying to get a message across to staff in CEE that something is wrong when they in fact believe it is OK would take a very long time. You have a brick wall to break through if they think it doesn't affect them."

	The biggest challenge in Europe is having databases of physicians that are reliable and regularly updated. Where, in the US, "you did not tend to see redundant multiple systems within one company," says Eigner, "in Europe it's the norm for a company in one country to have, say, three to five financial systems." He goes on: "I don't think I've seen a single large company yet that has less than four or five customer masters within Europe."

	Even Western Europe's heterogeneity and multilingualism can work against it. "Someone from Switzerland could be engaging with a French HCP and not realize it," says Eigner. "The HCP might have a residence in Switzerland, and everyone is speaking French there, but he or she is a licensed French physician and subject to the demands of the Loi Bertrand (France's "Sunshine" Act). This is something we're going to start seeing in the next couple of years."

	All this, adds Eigner, is new territory, even for major pharma companies. "This is the first time you're really seeing major companies moving to put a global transparency and global HCP engagement strategy in place," he says. "Even though there might be a global policy in place, the specifics have not been standardized." CCOs, then, have to ask themselves some questions: Are they solving a specific issue within compliance such as transparency? Or, for example, are they trying get HCO/HCP engagement standardized across the globe? The biggest challenge before formulating a global strategy, says Eigner, is addressing fundamental questions like these.

	There is an increasing amount of software available to help companies streamline their payment-tracking processes, manage their sales forces, resolve their legal disputes, and adapt to new code provisions and updates across borders, but Dovletian says the question of what IT tools are available is just one aspect of the process. "There is a lot of software out there, but that's not really the issue. The issue is: have you stepped back and looked at all the silos and at what your infrastructure looks like generally?" she says. "Do you have a common language for information to flow into your system? Have you identified and connected with all the areas that should be feeding into your systems?"

	Certainly, good technology is welcome; the better the systems, the better they can be audited readily and easily. Again, though, smaller companies can face challenges when it comes to equipping staff with the latest IT solutions. Eves says it would be "nice if staff had the means to access guidance in a way that would support decision-making in real time (e.g., via a tablet app for staff in the field). Having access to all the necessary information means that we would be supporting staff at the time since training will not necessarily cover every situation. Compliance often exists within a grey zone where there is not a simple black and white that can be covered in training."

	At a technology-focused compliance event in 2014, one speaker-a vendor of IT solutions-pertinently reminded his audience that "IT solutions don't solve cultural problems." In Eigner's experience, however, a way to make these solutions work across cultures is "to present them as tools to make the business process more efficient rather than specifically a 'compliance tool.'" Then, he says, the level of acceptance is much higher, especially in countries that do not have direct transparency requirements.

	Technology is all well and good, but it seems that time is a commodity that compliance officers need more of. Eves has faith in a patient, organic approach. He is confident that the EFPIA guidance on transparency and member state code changes are right and that, eventually, full disclosure will become the norm. "As an industry we need to work together to be sure there is consistency. The pick-up may be slow, but in time it will be accepted."

	The same can be said about the CCO in pharma. PwC's State of Compliance Survey 2014 reminds us that the CCO role is only "roughly a decade old and has evolved rapidly." If it takes another 10 years for the CCO to become, as PwC predicts, "the c-suite star of 2025," it will still have been a fairly momentous rise to prominence, especially given the plodding pace at which pharma likes to advance. But, increasingly, as US healthcare lawyer Christopher Parrella wrote recently, "The chief compliance officer is viewed as the gatekeeper of a company's reputation." In this observation alone we can see the enormity-and importance-of the task ahead.

's European and Online Editor. He can be reached at 

The looming shift to cross-border compliance in Europe puts the spotlight on the evolving role of chief compliance officers.

Pharmaceutical Executive-04-01-2015

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