Compliance and the Pharmaceutical Industry HCCA Regional ...
Managing Sales & Marketing Compliance With Technology The Seventh Annual Pharmaceutical Regulatory...
-
Upload
marvin-sutton -
Category
Documents
-
view
222 -
download
4
Transcript of Managing Sales & Marketing Compliance With Technology The Seventh Annual Pharmaceutical Regulatory...
Managing Sales & Marketing Compliance With Technology
The Seventh Annual Pharmaceutical Regulatory and
Compliance Congress
November 9th 2006
Bill Van NostrandWilliam F. Hills
The MMS Sales and Marketing Compliance ConsortiumThe MMS Sales and Marketing Compliance Consortium
About the Consortium
The Consortium is a group of companies collectively specializing in Regulatory Compliance programs as they pertain to Federal (OIG) and State legislation targeted at the Pharmaceutical industry.
The Mission of the Consortium
To assist the biopharmaceutical companies in assessing and managing the legal business risks associated with biopharmaceutical sales and marketing activities
To assist companies in designing and implementing processes, procedures and technologies to reduce the business risks associated sales and marketing activities
MMS Leads the Sales & Marketing Compliance Consortium
Sales & Marketing Regulation Escalating Rapidly at National Level…
Sales & Marketing Regulation Escalating Rapidly at National Level…
Public, political and healthcare industry group scrutiny of pharma sales & marketing increasingly contentious
• Frequent articles in the media• American College of Physicians (Opt Out Program)
Industry Groups Responding to Public Pressure• PhRMA Guidelines (2002)• AMA Guidelines
Federal and State regulation governing/impacting all pharma sales & marketing activity increasing dramatically
• Sarbanes-Oxley• Prescription Drug Marketing Act• Medicare Part D• OIG 2003: Compliance Program Guidance for Pharmaceutical
Manufacturers• SEC False Claims Act• Whistle Blower Law (Qui Tam)• FDA (DDMAC)• Individual and independent state regulations (50 state 50
separate regulations)
Exposure for Pharma Companies IncreasingExposure for Pharma Companies Increasing
Phama companies spend more than $19 billion on sales & marketing promotional expenses annually
Number of sales reps in US topped 100,000 in 2006 – triple the number of reps 10 years ago
There’s nearly 1 pharma sales rep for every 7 practicing US physicians
Increasing use of outsourced sales resources diluting impacts of training and hampering control efforts
Unprecedented market pressures to increase sales increasing pressure to sell at all costs.
Whistle Blower Law increased number of people
looking for impropriety
source: eyeforpharma & InPharm
In excess of $6billion in fines
A new mandate for Pharma CompaniesA new mandate for Pharma Companies Given a climate of increasing and contentious
public scrutiny along with increasingly restrictive, aggressive and complex regulation leading companies must:
• Demonstrate good faith efforts to be fully and proactively compliant with all relevant and applicable legislation and regulation governing sales and marketing activities at all levels of the company.
• Work toward achieving a fully integrated sales and marketing compliance management capability (processes, procedures and systems) that adequately safe guards them and their stockholders from the aberrant behavior of a few individuals, groups or departments.
Sales & Marketing Compliance Management Maturity CurveSales & Marketing Compliance Management Maturity Curve
Proactive Management
Reactive Response
Passive Training &
Policy Response
Level 1• Fragmented organizational governance for sales & marketing risk mgt• Key Policies & mgt Procedures in Place• Limited Business Rules Defined• Primary mechanism of enforcement is training• Reactive investigation of reported problems
LEVEL OF RISK MITIGATION
Level 2• Department/function dedicated to
Sales & Mkt compliance management• Well defined set of business rules• Limited, largely manual monitoring of
key indicators• Certification of key compliance steps • Mix of reactive & proactive
investigation of suspected problems
Source: VantagePoint Research & Industry Survey
Level 3• Integrated, enterprise strategy for
managing sales and marketing compliance and risk
• Autonomous department/function responsible for compliance monitoring, forensic investigation and reporting
• Dynamic business rules development process that keeps pace with regulatory changes
• Ongoing/near real-time monitoring of multiple signal detection sources
• Established credibility with OIG, other regulatory authorities & insurance underwriter for proactive compliance mgt
• Dominantly proactive identification and investigation of suspected problems
Early Findings : Organizational & OperationalEarly Findings : Organizational & Operational
Proactive Management
Reactive Response
Passive Training &
Policy Response
Source: VantagePoint Research & Industry Assessment
Enormous reluctance to discuss compliance strategies, operations or technology usage (CIA)
All companies have policies in place but few companies have well articulated and comprehensive strategy for holistic management of Sales & Marketing Compliance Risk
Most recent activity (beyond training) in response to some formal or informal regulatory finding or actions
Nearly all companies have a compliance officer at some level with responsibility for sales and marketing compliance
Most compliance activity buried in myriad of functional groups within Sales and Marketing and/or legal
Limited number of companies with dedicated sales and marketing compliance functions Most organizations heavily reliant to self policing & reporting by
sales and marketing organization
LEVEL OF RISK MITIGATION
Early Findings: Technology ApplicationEarly Findings: Technology Application
Proactive Management
Reactive Response
Passive Training &
Policy Response
Source: VantagePoint Research & Industry Assessment
Few well defined commercial technology solutions
There is little industry consensus on approach
Many companies have multiple, not necessarily well coordinated technology initiatives to address sales and marketing
compliance
Technology solutions dominated by custom built applications
A few companies and vendors have begun adapting other compliance tools for sales and marketing
Most organizations using a mix of “one-off,” point technology solutions heavily supplemented with manual intervention
LEVEL OF RISK MITIGATION
Business Rules Management, Process Execution, Reporting,
Tracking and Certification
Signal Detection & Activity Monitoring
Forensic Investigation
Training & Training Support
Sales & Marketing Compliance Technology LandscapeSales & Marketing Compliance Technology Landscape
Signal Detection & Activity Monitoring
Forensic Investigation
Training & Training Support
Sales & Marketing Compliance Technology LandscapeSales & Marketing Compliance Technology Landscape
Eduneering
Midi
Zenosis
Business Rules Management, Process Execution, Reporting,
Tracking and Certification
Mature solutions exist for training
Business Rules Development Process Execution, Reporting,
Tracking and Certification
Signal Detection & Activity Monitoring
Training & Training Support
Sales & Marketing Compliance Technology LandscapeSales & Marketing Compliance Technology Landscape
Forensic Investigation
Keane SCORE
Polaris Mgt Partners (audit)
Dendrite/BuzzeoPorzio
Numerous emergent tools Exists
Sales & Marketing Compliance Technology LandscapeSales & Marketing Compliance Technology Landscape
• Emergent Solutions on the ‘drawing boards’
Signal Detection & Activity Monitoring
Training & Training Support
Forensic Investigation
Business Rules Management, Process Execution, Reporting,
Tracking and Certification
• Custom built, narrowly focused warehouse-based technologies being deployed
Signal Detection & Activity Monitoring
Forensic Investigation
Training & Training Support
Sales & Marketing Compliance Technology LandscapeSales & Marketing Compliance Technology Landscape
• Few comprehensive solutions even on the ‘drawing board’
• Potential platforms include: Documentum, Opentext, SDMS…
Business Rules Management, Process Execution, Reporting,
Tracking and Certification
Automation:Automation:
Based upon our research and assessment of industry and regulatory trends we believe a comprehensive signal detection and forensic investigation tool is critical to costly State and Federal Fines
Allows Pharma to gain visibility into daily risks for management
Allows Pharma to search and respond to agency questions in real time
Allows Pharma to take remedial action sooner rather then later
“Near Real-Time” Intelligence“Near Real-Time” Intelligence
Macro Measures, System(Aggregation Theme)
Macro Measures, System(Aggregation Theme)
Executive Dashboard
Executive Dashboard
ForensicInvestigation
ForensicInvestigation
Market Risks and Indicators
Market Risks and Indicators
Internal Signals of Risk
Internal Signals of Risk Text, Image, Voice Fax,
Oracle (and other databases), Word, SAS, PowerPoint, Call Center, Prescription data, backup images, documents (e.g., Documentum)
Up to date intelligence ( Arnold & Porter, Buzzeo)Up to date intelligence ( Arnold & Porter, Buzzeo)
RisksSignalsImportance
The only way to get ahead of the game is to receive near real-time intelligence on potential risks and indicators (signals) of those risks
Remediation SWAT Team
Remediation SWAT Team
Typical Typical Sales and MarketingSales and Marketing
Touch pointsTouch points
Typical Typical Sales and MarketingSales and Marketing
Touch pointsTouch points
Risk “Signal Detection” SystemRisk “Signal Detection” System
AcademiaGrantsStudies
AcademiaGrantsStudies
PharmacyContractingRebatesIn store promotions
PharmacyContractingRebatesIn store promotions
Medical AffairsPhase 4 trialsMedical Info Center
Medical AffairsPhase 4 trialsMedical Info Center
MarketingPromotional ProgramsDirect MailOff Label PromotionsOutbound Call CentersDTCInternet Portals
MarketingPromotional ProgramsDirect MailOff Label PromotionsOutbound Call CentersDTCInternet Portals
Medical Education3rd partyAcademicSymposia
Medical Education3rd partyAcademicSymposia
Special EventsDoctor DinnersConventionsKOL Portals
Special EventsDoctor DinnersConventionsKOL Portals
MedicarePart DRx CardState Programs
MedicarePart DRx CardState Programs
Field OperationsDoctor callsPromotionsCo-PromotionsSample ManagementeDetailingDirect sales to Physicians
Field OperationsDoctor callsPromotionsCo-PromotionsSample ManagementeDetailingDirect sales to Physicians
Compliance OfficeFederal (OIG)StateAMAPharmaceutical Manufacturers Assn.Post Marketing Surveillance
Compliance OfficeFederal (OIG)StateAMAPharmaceutical Manufacturers Assn.Post Marketing Surveillance
BUYING GROUPSPBMsInsuranceHospitals/retailersWholesalersGovernment contractsPhysicians-direct shipmentSpecialty Buying Groups
BUYING GROUPSPBMsInsuranceHospitals/retailersWholesalersGovernment contractsPhysicians-direct shipmentSpecialty Buying Groups
TrainingManagementField ForceCSOs
TrainingManagementField ForceCSOs
CertificationContracts
CertificationContracts
We believe it is possible to build a robust risk management“signal detection” system — Showing Best Effort Compliance
Typical Typical Sales & Sales &
MarketingMarketingTouch pointsTouch points
Typical Typical Sales & Sales &
MarketingMarketingTouch pointsTouch points
Risk “Signal Detection” SystemRisk “Signal Detection” System
Sig
nal
Det
ecti
on
En
gin
e
Federal & StateFederal & StateComplianceComplianceRegulationsRegulations
Federal & StateFederal & StateComplianceComplianceRegulationsRegulations
Out of Compliance
Out of Compliance
CautionCaution
InCompliance
InCompliance
Signal SourcesSignal SourcesINTERNAL• E-mails & Faxes• Voice mails• Print jobs (Promotional materials in the field)• Trend reports (sales)• Adverse event monitoring• Fiduciary systems (e.g., sample mgmt)• Compliance systems• Call systems• SFA call notes• Speakers Programs Dinner/lunch and
learn meetings - contracts, expenses• CME-speakers contracts• Pharmacy, Wholesaler, GPOs, PBMs, Formulary and
Hospital programs• T&E Financial Systems• MSL - Academic Sales Representative
Notes and Programs (studies)• Training - Senior Mgmt & Field Sales Force• Representative Contracts (CSOs)
EXTERNAL• Market share• Physician/pharmacist surveys• Independent assessments• Focus groups• Databases (IMS, NDC, Verispan,
Dendrite)• Independent calls through
call centers• 800# to report fraud• Government-Federal (OIG) and
State• U.S. Attorney’s office
Signals can come from internal and external sources
Guidelines for Moving ForwardGuidelines for Moving Forward
Forget ROI think Risk/compliance spend
Move from a fixing the dike mentality to a comprehensive strategy for compliance monitoring and investigation
Design holistic, integrated system architecture designed to support all layers compliance technology support
Purchase external State Regulatory updates
Take a proactive Forensic approach
Our vision….Our vision….
Architectural Map
Thank You!!Bill Van Nostrand
President/CEOMedical Marketing Solutions
William F. HillsPartner
VantagePoint Consulting Group908-788-7350
DELETED SLIDES PLACED AFTER THISDELETED SLIDES PLACED AFTER THIS
Sales and Marketing Compliance Challenges:…….Fraud and AbuseSales and Marketing Compliance Challenges:…….Fraud and Abuse
Training
Anti-Kick legislation
Off-Label Promotion
Channel Management
Physician Spending
Training: (Key is Certification)Training: (Key is Certification) Types of training:
• Traditional:– Face to face– Text – Paper Tests
• Web Based:
– Content Driven– LMS backend– On-line testing– Some Certification
• Simulation:– Yellow Brick Road– Choices and Options– Review and Correct– Certification
Anti-Kickback Legislation:Anti-Kickback Legislation: Buying/influencing the business:
• Wholesellers:– Charge Back/Rebate programs
• Retailers:– Chain and independent promotional programs
Robinson Patman Act (Price and Service discrimination)• Hospitals:
– Clinical studies and education grants• Third Party Formulary Plans:
– Paid Outcome studies• Physicians:
– Paying for Nurse/staff symposia attendance• Medicare Part D:
– Paying for programs reimbursed by Medicare in States that prohibit such
Channel Management:Channel Management:
Distribution to Wholeseller:
• All products/distribution sites/quantities by NDC code
Ability to track the distribution flow to and from the retail stores:
• Downstream tracking, line item invoice, B2B
Ability to track the distribution to and from direct sale to Physician practices/hospital chains and mail order distributors:
• Now can see Charge Backs because of reports vs. 1-2% stuffing fees
Physician Spending: ($100 per Physician/month/year/rep?)Physician Spending: ($100 per Physician/month/year/rep?)
Office and staff gifts…..food:• Example: Dunkin donuts/coffee/pizza
KOLs…..fee equals level of effort:• Example: $25,000 for 1 speaking engagement
One on One dinners:• Example: Le Cirque for 2 but expense it as 5 people
Lunch and Learn:• Example: Reps providing lunches to residents
Group KOL dinner meetings:• Example: Exaggerate the number of people in attendance vs.
cost of dinners State Reporting:
• Example: 50 sets of expense reports…………….????????
Off-Label Promotion:Off-Label Promotion: New Studies:
• Unapproved indications being discussed….not through medical director
KOL speakers:
• Speaking on unapproved indications under the guise of medical education
MSL influence:
• Allowing one-off studies of unapproved indications with large grants to influence academic centers or KOLs
Specialty Drugs (Cancer/HIV):
• Under the guise of cocktail mixes and critical use
Pharma Response to Sales & Marketing Compliance Management is Emergent Pharma Response to Sales & Marketing Compliance Management is Emergent
Corporate Compliance focused on Sales & Marketing in transition
• Most compliance activity buried in myriad of functional groups within Sales and Marketing and/or Legal
• Limited number of companies with dedicated sales and marketing compliance functions
• Most embedded in corporate legal departments
Rapidly evolving regulatory environment a continual challenge• Costs of keeping up for a small firm > 2.5 percent of its annual budget (source:
Mass Chamber of Commerce Study on Biotech and Life Sciences Companies)• Staff sizes are growing rapidly
Technology Solutions are predominately inadequate or incomplete
• Training Centric• Heavy reliance on self reporting at the departmental level• Manual monitoring and investigation practices• Limited number of emerging point technical solutions
Industry Survey Underw
ay
Early FindingsEarly Findings
Proactive Management
Reactive Response
Passive Training &
Policy Response
LEVEL OF RISK MITIGATIONSource: VantagePoint Research & Industry Assessment
Compliance Spend EffectivenessCompliance Spend Effectiveness
Approach - 3 Month Compliance Spend Review
Compliance Compliance Risks/SignalsRisks/SignalsCurrent andCurrent and
PotentialPotential
Compliance Compliance Risks/SignalsRisks/SignalsCurrent andCurrent and
PotentialPotential
Financial ReviewFinancial Review
Compliance AuditCompliance AuditRisk per Risk per
Compliance $ Compliance $ SpendSpend
Risk per Risk per Compliance $ Compliance $
SpendSpend
Systems and Infrastructure
Systems and Infrastructure
Together, the compliance spend analysis and the compliance effectiveness audit provide a scorecard of compliance spend effectiveness — the basis for moving forward