Pharmaceutical Commerce - July/August 2011 - (Page 28)

Legal Regulatory Aggregate Spend Laws: Here Comes the Sun < continued from page 1 and medical device companies to There is a glimmer of a silver lindisclose data about different types ing in the effort to collect all these of compensation paid to healthdata: Once they’re in one place, care providers (HCPs) and healthbusiness analysts can attempt to care organizations (HCOs), and an measure spend data and compare additional nine states have introit to the business value obtained— duced similar legislation, accordsomething that has rarely been ing to William (Bill) Buzzeo, VP Bill Buzzeo, attempted outside conventional Cegedim Relationship and GM, Global Compliance Management advertising/promotion activities. Solutions, at Cegedim Relationship But getting there will require a long Management (Bedminster, NJ). slog through data capture and standard- “The current state-level reporting requireization processes. Meanwhile, the first few ments are not consistent from state to state rumblings of the impact of publicly available and cannot be broadly interpreted regardagg spend data on physicians have already ing the definitions of terms, reportable entioccurred: ProPublica, a New York nonprofit ties or types of transactions,” adds Michael investigative-journalism group, has a run- Johngren, managing partner of Parallax ning “Dollars for Docs” survey on its website, Consulting (Princeton, NJ). Once the fedwhich identifies payments from a handful of eral agg spend rules are layered on top of the pharma companies that have begun report- patchwork of state regulations, it becomes ing some agg spend data; commentators on clear that reliance on a manual or spreadsheet the site who are physicians are generally not solutions to track acitivity will no longer be happy with the exposure. sufficient. Rather, experts agree that the use Given the complexity of the undertaking, of an enterprise-wide IT solution, supported “It’s surprising how many providers do not by appropriate changes in business rules and Figure 1: Costs incurred from third party system implementation for aggregate spend and disclosure reporting $5M or more 8% $2M – $4,999,999 7% Under $500K 31% $1M – $1,999,999 23% $500K – $999,999 31% yet have a complete understandprocesses, will be necessary. ing of the pending federal legislaThis will create both challengtion, or systems and a process infraes for life sciences companies and structure in place to readily support opportunities for the third-party those requirements,” says Thomas vendors and service providers Hannigan, practice leader at The specializing in the agg spend areKnowledgent Group (Warren, NJ). na. For instance, according to an “Many assume that the federal industry survey (entitled Trends in Thomas Hannigan, Sunshine legislation is merely ‘stateAggregate Spend and Disclosure level Spend reporting for more Knowledgent Group Reporting Compliance) pubstates,’” he says. “We are seeing a lished in March 2011 by Cegedim false sense of security that the processes and Relationship Management, of those respontechnologies already in place will scale appro- dents who mentioned that they currently priately to support federal Sunshine report- use a manual/spreadsheet solution to satisfy ing, and in many cases, they may not.” state-level requirements, 77% plan to move As of now, nine states and Washington, to an automated solution in response to the DC, have passed legislation requiring drug federal law (up from 64% in 2010). 28 July | August 2011 www.PharmaceuticalCommerce.com Meanwhile, PPACA does not preempt data-capture and reporting timelines has existing state laws and does not prevent forced companies to each pursue its own individual states from adding additional solution,” says Henry Burgess, executive reporting requirements; it merely serves as director in Ernst & Young’s Advisory Services a nationwide baseline. This creates consider- Practice (New York). In the absence of final able amount of complexity to the disclosure requirements published by HHS, many and reporting requirements drug makers and third-party consultants have developed legal medical device manufacturers must manage. interpretations of the state and federal legisAnd to date, HHS has not set clear poli- lation, to enable companies to get started. “Since the final regulations are still in cies or issued standards to guide companies. development and HHS has the authority to This lack of guidance is hampering the efforts of many companies as they approach the change them, most companies are taking an expansive view in preparing for March 2013 deadline for reporting their reporting requirements, logto begin. ging all interactions with their key “Companies have to start colopinion leaders (such as physicians, lecting data this coming January, medical investigators, medical yet there are still a lot of details that experts and other advisors), so they need to be resolved about the prewill be prepared to report based on cise information that companies the final requirements once they will be required to collect,” says Kyle are known,” says Schwenger of Sampson, JD, partner at Hunton & Tom Schwenger, Accenture. “Where interpretations Williams LLP (Washington, DC). Accenture have been difficult, our clients have “It’s always surprising to me made individual business decihow long it takes the government sions on what data will be captured based, in to turn a basic principle into law and yet not provide any details about how the law should part, on state regulations and PPACA,” adds be followed,” says Parallax’ Johngren. “A big Burgess of Ernst & Young. question is whether there will be a reasonable amount of time for companies to react once What’s at stake The types of expenditures that must be the government issues its standards for subreported include any “transfer of value” (in mitting the data.” To meet the complex requirements of the cash or in kind) between a drug or medical state and federal agg spend rules, “Life scienc- device manufacturer and any HCP or HCO. es companies must establish cross-functional Reportable items — take a breath here! — sponsorship and governance, engaging peo- include consulting fees, compensation, honple with skills in compliance, R&D, commer- oraria and expenses related to particularly cial ops, medical affairs, IT and operational on advisory boards, gifts, entertainment and change, says Tom Schwenger, global man- meals, travel expenses, educational support, aging director for Accenture’s Life Sciences fees for research, charitable contributions, Sales and Marketing Practice (Philadelphia). royalties or license fees, current or prospec“They must also educate senior leaders from tive ownership or investment interests, direct business, legal and regulatory functions on compensation for serving as faculty or as a the implications of the resulting solution speaker for a medical education program, options, and get their buy in for the compli- medical education grants and contributions, educational items (such as anatomical modance strategy.” Specifically, the appointed stakeholder els), fees and expenses related to research group should bring these critical skills to the services, unblended market research, publication support (including payment to a table: third party to support an HCP in drafting an article or data analysis), and other payments • Knowledge of the state and federal agg spend requirements (and related regulations or transfers of value as defined by HHS. related to fraud and abuse) To date, the value attached to consumer• Organizational change expertise and oriented coupons given to physicians (to effective business sponsorship, and allow patients to sample a given medication) • Strong IT capabilities (either internal or is not included in the Sunshine Spend law. third-party) related to financials/procurement, However, at least one state to date (Vermont) data integration, analytics and reporting to currently requires companies to track and the multiple government agencies. report the distribution of coupons, vouchers and samples to physicians. “It appears that Many agree that common standards for Vermont’s reasoning for this requirement is data definition and exchange protocols would that providing coupons and vouchers to an allow everyone involved to better integrate HCP creates a relationship that may affect their systems and would improve the quality his or her prescribing habits, even though of the reported information. However, wait- the end benefit is provided to the consumer,” ing for guidance from the government is not explains Benjamin Carmel, manager, Polaris an option. Management Partners (New York). “Unfortunately, the lead time and investAs for drug samples, Vermont already ment required by companies to prepare their requires disclosure, and starting next April, systems, processes and teams to meet the per PPACA, the quantity of drug samples CEGEDIM RELATIONSHIP MANAGEMENT http://www.PharmaceuticalCommerce.com

Table of Contents for the Digital Edition of Pharmaceutical Commerce - July/August 2011

Pharmaceutical Commerce - July/August 2011
Contents
Op-Ed
Top News
Business/Finance
Brand Communications
Supply Chain/Logistics
Manufacturing & Packaging
Legal/Regulatory
Information Technology
PDMA Exhibitors
Meetings and Editorial Index

Pharmaceutical Commerce - July/August 2011

Pharmaceutical Commerce - July/August 2011 - Pharmaceutical Commerce - July/August 2011 (Page Cover1)
Pharmaceutical Commerce - July/August 2011 - Pharmaceutical Commerce - July/August 2011 (Page Cover2)
Pharmaceutical Commerce - July/August 2011 - Pharmaceutical Commerce - July/August 2011 (Page 3)
Pharmaceutical Commerce - July/August 2011 - Contents (Page 4)
Pharmaceutical Commerce - July/August 2011 - Contents (Page 5)
Pharmaceutical Commerce - July/August 2011 - Contents (Page 6)
Pharmaceutical Commerce - July/August 2011 - Op-Ed (Page 7)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 8)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 9)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 10)
Pharmaceutical Commerce - July/August 2011 - Top News (Page 11)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 12)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 13)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 14)
Pharmaceutical Commerce - July/August 2011 - Business/Finance (Page 15)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 16)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 17)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 18)
Pharmaceutical Commerce - July/August 2011 - Brand Communications (Page 19)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 20)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 21)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 22)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 23)
Pharmaceutical Commerce - July/August 2011 - Supply Chain/Logistics (Page 24)
Pharmaceutical Commerce - July/August 2011 - Manufacturing & Packaging (Page 25)
Pharmaceutical Commerce - July/August 2011 - Manufacturing & Packaging (Page 26)
Pharmaceutical Commerce - July/August 2011 - Manufacturing & Packaging (Page 27)
Pharmaceutical Commerce - July/August 2011 - Legal/Regulatory (Page 28)
Pharmaceutical Commerce - July/August 2011 - Legal/Regulatory (Page 29)
Pharmaceutical Commerce - July/August 2011 - Information Technology (Page 30)
Pharmaceutical Commerce - July/August 2011 - Information Technology (Page 31)
Pharmaceutical Commerce - July/August 2011 - PDMA Exhibitors (Page 32)
Pharmaceutical Commerce - July/August 2011 - PDMA Exhibitors (Page 33)
Pharmaceutical Commerce - July/August 2011 - PDMA Exhibitors (Page 34)
Pharmaceutical Commerce - July/August 2011 - Meetings and Editorial Index (Page 35)
Pharmaceutical Commerce - July/August 2011 - Meetings and Editorial Index (Page Cover4)
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