Pharmaceutical Commerce - April 2010 - (Page 25)
Legal | Regulatory
With Healthcare Reform, Aggregate Spending Jumps as a Regulatory Priority
The growing number of states with laws now are joined by the “51st state”: the federal government
By Nicholas Basta
Who owns the agg spend reporting responsibility?
A headache for corporate compliance officers in pharma is now turning into a debilitating migraine: aggregate spending regulations, which seek to record and monitor the money or goods directed at prescribers and clinicians by the industry. The Patient Protection and Affordable Care Act (PPACA)—the Obama administration’s massive healthcare reform law—absorbed the Physician Payments Sunshine Act, which had been bouncing around in the halls of Congress for a couple years. Now, the reports that were to be filed with various state offices (six states have rules in place; another 20 are contemplating them) will be filed on a national basis, starting in 2012.
The federal action, however, seems at this point simply to add a 51st state to the list of potential or actual regulators. PPACA sets a minimum reporting standard, but states will be free to add to those minimums, and many of the rules already on the books vary according to minimum reporting amounts, reporting deadlines, penalties and more. It adds up to a large—and growing—body of regulation that will make a lot of work for the finance office, the compliance office, and the guidance given to both sales forces and to R&D departments (who, in some instances, need to report dollar amounts for sponsored research or consulting). Cegedim-Dendrite (Bedminster, NJ) is one of a growing list of IT or consulting services that is stepping into the breach with solutions. A just-completed survey it performed found that 40% of respondents are tracking expenditures manually, usually with spreadsheet programs. (However, half of that number expects to migrate to automated systems soon.) And only 29% of respondents are “very confident” that they are recording and reporting the spending in a fully compliant manner. As companies continue to struggle with the identification of data sources, consistent standards for data sources, single views of customers across data sources, and various other data anomalies, it becomes increasingly important to have a more holistic and consistent approach to aggregate spend and state reporting,” said Bill Buzzeo, VP and GM, Compliance Solutions and OneKey for Cegedim Dendrite. He adds that this holistic view now includes, in some cases, R&D departments “who have never been asked to do this type of reporting before.” Cegedim Dendrite has recently rebranded an earlier version of an agg spend system, State Guardian, as AggregateSpend360, and built additional functionality into the tool. John Oroho, EVP of Porzio Pharmaceutical Services (Morristown, NJ), points out that another part of PPACA includes reporting on the value of samples that have been distributed to prescribers, something that has been regulated under the Prescription Drug Marketing Act (PDMA) since the late 1980s, but will now have new reporting requirements. Departments that handle sample accountability and PDMA compliance will be brought into the process. Porzio Pharma Services has been publishing a Compliance Digest on state-level rules for several years, and has partnered with MedPro (Mt
Fig. 1. According to a just-released Cegedim-Dendrite survey, the corporate compliance office is the most common authority for reporting aggregate spending. “Other” includes IT, finance, executive management and others.
Arlington, NJ) and Synergistix (Sunrise, FL), a sales-force-automation software vendor, to provide agg spend compliance. Mark Linver, senior principal in the Managed Markets Service of IMS Health (Valley Forge, PA), says that while agg spending is getting “high level” attention from corporate compliance officers, “this is not a situation where you can issue an edict, buy and install some software, and expect everything to work. You will need to provide extensive training to sales forces, and to review business processes regularly even as the regulations themselves are evolving.” In addition to providing consulting services on compliance, IMS Health has partnered with an IT company, R-Squared Services and Solutions (Princeton, NJ), to offer an Aggregate Spend Compliance Service. Other companies jumping on the agg spend bandwagon include OpenQ (Charlottesville, VA), which has experience in managing speaker bureaus for pharma companies, and the managing consulting firms Huron Consulting (New York), Polaris Management Partners (New York), and CapGemini (Cambridge, MA).
Names, rules and dollars
There are three essential ingredients to a successful agg spend system: identifying the recipients correctly; being current with reporting rules; and successfully aggregating the spending. All three have their challenges, according to industry experts. Merely to identify who is receiving a gift from a rep, or has a consulting arrangement with a pharma company, is not a trivial task. Cegedim Dendrite bought SK&A Information Services last year, which compiles identifying data on healthcare professionals, with compliance reporting partly
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CREDIT: CEGEDIM DENDRITE
APRIL 2010 25
Table of Contents for the Digital Edition of Pharmaceutical Commerce - April 2010
Pharmaceutical Commerce - April 2010
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Pharmaceutical Commerce - April 2010