Principles of Partnership

March 2, 2006
Cindy D'Aoust

Pharmaceutical Executive

Pharmaceutical Executive, Pharmaceutical Executive-03-02-2006, Volume 0, Issue 0

One legal expert noted that the industry may be divided into two sectors: companies that have CIAs and those that will.

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.

Getting Started

Meeting planners that meet basic code guidelines at the beginning will be able to breathe easier long term. Companies need to first appoint a compliance officer and committee to develop the best policies and procedures; at minimum, companies have to develop a compliance program that involves the different departments. A compliance program ensures that internal regulations and policies will be met. Other practices include:

• Make sure key stakeholders coordinate with internal and external resources involved in the compliance initiative

• Review PhRMA and OIG codes, as well as individual laws applicable in each state where the company is holding a meeting

• Locate relevant data within the company or with its suppliers and make sure all information is easily accessible

• Ensure software is up-to-date and can consolidate all the data on meeting spend. If necessary, use a system that can track spend by individual meeting and individual physician

• Take careful notes of every procedure and communication required to implement the compliance program; this may include changes to IT systems and any written requirements related to expenses for medical meeting spend

• Identify whether the current system needs to be changed or new applications need to be developed

Pharma companies often use an internal system to manage compliance programs, but it may be more advantageous to partner with an outside contractor to augment the company's system.

Creating an Audit Trail

Companies need a system that keeps track of all physician-related data. As regulations and laws multiply, companies need to calculate exact spend per physician per meeting, rather than average spend across all physicians or all meetings. In order to achieve this, the system should:

• Capture an individual identification number for each medical meeting and for each individual physician tracked across all systems and suppliers

• Provide a central mechanism to keep track of every medical meeting expenditure, including travel, lodging, meals, honoraria, expense checks, and gifts

• Create a paper trail of all payments, cancellations, and changes to the program arrangements

• Monitor all the changing regulations of different compliance requirements. If a doctor practices in Pennsylvania, the state expects pharmaceutical companies to report to the state every time the doctor is paid to speak at a meeting—even if the meeting is arranged and takes place in another state

• Provide compliant options when selecting a venue or choosing appropriate experts

• Provide contracts to trained speakers based on company guidelines

• Track speaker and attendee information and remunerations

With a central program like this in place, compliance officers and meeting planners will have a database to refer to if they need to locate information related to any meeting activity.

Partnering and Communicating with the Experts

Pharma companies need to use all their resources to ensure their meetings stay compliant. An experienced meeting planning company can be a tremendous resource for implementing a successful compliance program. They can design and implement the program using systems to protect against non-compliance, as well as provide comprehensive data to stakeholders eyeing pharma's every move.

In the past, companies often allowed sales reps to make decisions before meetings about venues, menu selections, open-bar options, and even speaker selection. Clearly this move created serious risks of compliance problems. Policies need to be enforced uniformly. The success of the initiative should be the result of a joint development effort between an experienced planning company and pharma.

Educating and Training Employees and Suppliers

Compliance rules change, so pharma companies must develop educational materials and conduct seminars on company policies and regulations. Vendors also need to be trained on company guidelines since they are an extension of the program, supplying goods and services for meetings. In turn, a valuable supplier will help companies develop informational literature and provide training assistance. Managing change in a systematic way is critical to ensure compliance occurs.

In today's pharma climate, companies with the most effective compliance programs and effective partnerships will come out winners by demonstrating to customers, lawmakers, and the public that ethical conduct is a basic tenet of how they do business.

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