highlights from tracking & reporting aggregate spend

1.January 12-13, 2010
Washington, D.C.
ExLPharmas Tracking & Reporting Aggregate Spend Highlights

2. Why is Training Critical to the Success of Accurate Data Capture and Reporting?
One of the 7 Elements of a Compliance Program
Process is not intuitive to many areas of businessespecially commercial
Data systems in most organizations werent designed to beintegrated
CRM
Accounting
Speaker Bureau
Grants
Effective training reduces organizational risk
Understanding state restrictions and accurate reporting is a shared responsibility of all employees
Understand
the restrictions
and data entry process
Follow
the guidance
Seek advice
when necessary
Shared
Responsibility
3. When is the Right Time to Train on State Laws and Reporting Requirements?
Integrate into existing training process
New employee orientation and new rep sales schools
Ongoing training
Live training at meetings, e.g. brand team or sales meetings
Position throughout the year learning through repetition
Manager training
Must have understanding and buy in from the top down
Develop specific training applicable to managers
Refresher training
Sessions at meetings
Prior to events, e.g. American Academy of Physicians, American Society of Hospital Pharmacists
Booth Training for national meetings
4. Comprehensive Training and Communication
Critical Elements to the Success of Accurate Data
Capture and Reporting
Compliance Officers
Policy &
Procedures
Leadership
Computer
Based
Client
Live
Training
Compliance Training
Newsletters
Webex
Training
Tools
Internal Website
5. Who Should be Trained on State Laws and Reporting Requirements?Training by Business Areas
6. Who Should be Trained on State Laws and Reporting Requirements?Training by Function
Commercial

Executive Leadership

7. Management 8. Employees in High Engagement Areas 9. Operations 10. Administrative Support 11. Third PartiesMedical Affairs
R & D
Corporate Shared Service
(e.g. Public & Government Affairs)
12. Who Should be Trained on State Laws and Reporting Requirements? Medical Affairs Example

Executive Leadership

13. Management 14. Employees in High Engagement Areas 15. Operations 16. Administrative Support 17. Third PartiesMedical Directors
MSLs
Med Info
Grants Office
Biostatistics
Consultant
Engagements
18. Focused Trainingfor State Laws and Reporting Requirements
Benefits of Focused Training:
Relevance
Retention
Considerations for focused training:
Who within the department interacts with health care professionals?
Does the department affect the calculation and reporting of HCP payments and meals?
Risk areas identified in audits
Resource Considerations:
Do you have the resources (internal/external) to develop focused training?
Do you have a training platform than can support focused training assignments?
Compliance Officers
Policy &
Procedures
Leadership
Computer
Based
Client
Live
Training
Compliance Training
Newsletters
Webex
Training
Tools
Internal Website
20. Considerations for Training Senior Management
Organizational implications of aggregate spend gapsspending or reporting
Training Venue
Look for existing meetings that include many of the key personnel
Sr. Staff Meeting
Executive Leadership Committee
Corporate Compliance Committee
Content:Make it relevant
Identify the most likely instances in which Sr. Management might encounter state restrictions
Headquarter and satellite locations
Congresses
International meetings involving U.S. HCPs
21. Considerations for Training Senior Management
Engage the administrative staff
Administrative staff manage calendar and traveland can provide reminders prior to travel
Administrative staff frequently handle expense data and can help change old behaviors.
Reminder of internal meal caps
Reminder of information needed in order to complete data entry
Reminder of state restrictions/prohibitions
Leverage existing meetings of Executive Assistants
Compliance Officers
Policy &
Procedures
Leadership
Computer
Based
Client
Live
Training
Compliance Training
Newsletters
Webex
Training
Tools
Internal Website
23. Training for State and Federal Reporting
Where should you focus your training efforts?
Is this an
Allowable
Expense
under state
Regulations?
How should the data
be recorded?
Expense Reports
Tracking System
CRM
Law
Rules
Restrictions
Yes
Policy
Process
24. Effective Training of State Laws and Reporting Requirements
Training Format
Will vary depending upon the size and resources of the company
Company culture
Computer-based

Self paced

25. VideoLive
Webex
Conference Call
Consider phases of training:
Phase ISelf study and completion of web-based training
Phase IILive participation
Face to face meeting
Webex
Conference call
Phase IIIRefresher training
Sessions at departmental or annual meetings
Prior to events
Case studies are an effective way to engage employees to actively participate in the training session
Tailor the case study to the audience (when possible)
Provide scenarios that include shades of gray
Leverage managers influence
Develop Case Studies (with a trainer guide) for use by the manager
Remediation of improper data entry-WIIFM
Involvement of manager in retraining
Managers role in expense
Compliance Officers
Policy &
Procedures
Leadership
Computer
Based
Client
Live
Training
Compliance Training
Newsletters
Webex
Training
Tools
Internal Website
29. Monitoring an Aggregate Spend System
Weve Got an App for That
30. What Data Is in an Agg Spend System
19
Potentially:
Field sales spend on HCPs (meals/items)
Displays/exhibits
Speaker program spend (meals, speaker fees, expenses)
Speaker training
Home office meals with HCPs
Consultant payments
Advisory boards
Investigator payments/Trial costs
Grants (educational, sponsorship, IST)
Charitable contributions
Advertising costs (media, DTC)
31. Risks of a Robust System
20
Weve Got an App for That
What you have MORE of:
Data
From more sources
In more detail
Flexibility (being in one system)
Greater ability to analyze data
What you may NOT have more of:
IT headcount to continue development
Operational headcount to monitor data explosion
Headcount/expertise to analyze data
What may outside (OIG/AG) expectations be?
32. Monitoring: What, Who, When, How?
21
What are you monitoring?
Accuracy & completeness of data
Potential policy violations
Who is responsible for monitoring?
Individuals who spend
Business units & departments who own or manage the spend
Corporate Compliance (or Dept. that reports spend)
When
Should monitoring be scheduled?
How
Making monitoring user-friendly
33. Opportunities for Improved Compliance
22
Monitoring The low hanging fruit
Aggregate spend on individual HCP across the company
Dine & dash (view data by rep multiple lunches/same day)
Value of items/textbooks (internal policy limits)
Meal policy infractions (limits, venue, prohibitions)
Speaker program policy infractions (attendees, venue, etc.)
Speaker or consultant use across all departments
More challenging
Matching product detailed to HCP specialty.Requires robust customer master data
Potential Conflicts of Interest
Identifying agg. spend across related entities (HCP/HCO)
34. Auditing an Aggregate Spend System
35. Importance of State Law Knowledge in Designing Audits
24
Who, What, Where and When
Who is the covered?doctors, nurses, managed care, hospitals
What is covered?Meals, consultants, clinical trials, speakers, government pricing
Where?Offices, hospitals, CME, conventions,
When?Monthly, semi annual, yearly, calendar vs other time period
Was this ever audited before and by whom?
How often?
Auditor experience
Internal and external resources
36. National Verses Individual State Samples
25
Does the national sample suffice for a state?
Products
Employees
Field sales vs HQ
Location
HQ vs Regional Office vs R&D vs Manufacturing
Cost of national audit sample is much lower than sampling by state
100% vs some reasonable sample population
PhRMA Code vs State Laws
37. Types of Spend to Audit & the Controls
26
What is covered?
Meals, consultants, clinical trials, speakers, government pricing
Controls
Policies and procedures
Control documents
invoices, contracts, expense reports, payroll expenses, accruals
Review and approval
Automated (computer generated) vs manual (signature of manager)
Monitoring
Exception Reports
Warning notices
Audits
38. Audit Reports
27
Executive Summary
Scope and objective
Sample size
Procedures
Detailed observations
Recommendations
Management response; who and when
39. System Involvement
28
Types
General ledger
T&E
Speaker
Grants
R&D spending
Consultant
Payroll
Seamless and transparent
Reconciliation
Audit trails
Reporting capability
40. Pharmaceutical and Medical Device Manufacturer Conduct
41. Regulations: Purpose
Seeks to identify and minimize potential financial conflicts of interest.
Seeks to ensure transparency around industry payments to health care practitioners without compromising legitimate and beneficial industry-health care practitioner interactions.
Seeks to place pharmaceutical and medical device manufacturers on equal footing with respect to the specific requirements of Chapter 111N.
Specifically incorporates requirements from the PhRMA and AdvaMed Codes of Conduct as mandated by Chapter 111N.
42. Regulations: Process
Proposed regulations presented at December 2008 PHC meeting for informational purposes.
Two public hearings in January 2009.
Comment period closed on January 19, 2009.
Oral and written commentary summarized and reviewed by the Department.
Final regulations presented at March 2009 PHC meeting for approval.
43. Who Submitted Comments?
Consumer advocacy groups and individual consumers
Pharmaceutical, Biotech and Medical Device Industry Trade Groups
Individual Pharmaceutical, Biotechnology and Medical Device Manufacturers
Health Care Practitioners
Visitor Industry
Charitable Organizations
Payors, Pharmacy Benefit Managers and Purchasers of Drugs, Biologics or Medical Devices
44. Balancing the Interests
In depth analysis of testimony received.
Clarified the regulations where necessary.
Made substantive changes with 3 goals in mind:
To limit industry interactions with health care practitioners that may influence prescribing patterns and/or affect the care patients receive.
To increase transparency surrounding industry payments to covered recipients.
To not unduly restrict beneficial industry interactions with health care practitioners/other covered recipients that increase access to advances in the diagnosis, treatment and prevention of disease.
45. Code of Conduct Restrictions
46. Who is Subject to the Code of Conduct Restrictions?
Pharmaceutical or Medical Device Manufacturing Companies (PMDMC) that employ or contract with pharmaceutical or medical device manufacturer agents, and:
Are engaged in the production, preparation, propagation, compounding, conversion or processing of prescription drugs, biologics, or medical devices, either directly or indirectly or
Are directly engaged in the packaging, repackaging, labeling, relabeling or distribution of prescription drugs, biologics or medical devices.
Does not include health care practitioners (HCPs), physician practices, hospitals, clinics, home health agencies or retail pharmacies.
47. Who is Affected by the Code of Conduct Restrictions?
Persons who:
Prescribe prescription drugs for any person, and
Are licensed to provide health care in the Commonwealth
Partnerships or corporations comprised of such persons, or their agents.
Does not include bona fide employees or boardmembers of PMDMC, acting in their capacity as such.
48. Code of Conduct
Prohibited
Activities
49. General Marketing Prohibitions
Entertainment or recreational items of any value;
Payments in cash or cash equivalents either directly or indirectly except as compensation for bona fide services;
The provision of complimentary items such as pens, coffee mugs, gift cards, flowers, etc; and
Grants, scholarships, subsidies, consulting contracts, or educational items in exchange for prescribing or disbursing prescription drugs or medical devices.
50. Prohibited Meals
Meals that are part of an entertainment or recreational event;
Meals that are offered without an informational presentation made by a pharmaceutical or medical device marketing agent;
Meals outside of a HCPs office, hospital, academic medical center or specialized training facility; and
Meals provided to a HCPs spouse or other guest.
51. Prohibited Payments: CME, Conferences and Meetings
Financial support for the cost of travel, lodging, attendance or other personal expenses of non-faculty HCPs;
Direct payment of an HCPs meals;
Sponsorship of CME where the sponsorship is not compliant with the commercial sponsorship standards established by ACCME or other equivalent standards.
52. Code of Conduct
Permissible
Activities
53. Permissible Meals
Modest and occasional meals in conjunction with informational sessions in specified clinical training settings.
Sponsorship of meals at third-party scientific, educational or charitable conferences or professional meetings.
Meals pursuant to a written consulting agreement for bona fide services, sponsored genuine research or clinical trials.
54. Permissible Payments to Health Care Practitioners
Reasonable compensation for substantial professional and consulting services of an HCP for a genuine research project or clinical trial.
Reimbursement of reasonable costs necessary for technical training on a medical device if subject to a written agreement for purchase of the device.
Charitable donations.
The provision of price concessions, such as rebates or discounts in the normal course of business.
Payments for bona fide services.
55. Payments Permitted for Bona Fide Services
Research,
Consulting,
Advisory Board Participation,
Speakers Bureau Participation
Participation in company-sponsored training and education
56. Permissible Payments: CME, Conferences and Meetings
Permissible payments:
Compensation and reasonable expenses of conference faculty.
Sponsorship - where the payment is made directly to the conference or meeting organizers.
57. Institutional Disclosures
How do we prepare company leadership for increased institutional disclosure requirements in advance of federal disclosure?
Follow-up:How do we prepare HCPs for increased institutional disclosure requirements in advance of federal disclosure?
How are institutional disclosure requirements reshaping pharmaceutical Marketing?
Follow-up:How are institutional disclosure requirements reshaping Compliance?
Who are the company stakeholders in the institutional disclosure debate?
Follow-up:Who is the ultimate decision maker?
How do we assess the potential impact of institutional disclosures to the company?
Follow-up:To HCPs?To the institution?
58. Will trade associations continue to be involved?
How will AdvaMed, PhRMA, BIO and similar organizations continue to be proactive?
The legislative arms of these groups have worked to educate legislatures to defeat bills and, in states like MA, to amend the bills to better enable compliance.
Can industry through the trade groups gain more participation from medical and patient groups?
The question about physician interest in these laws keeps coming up, but are doctors put off by the prospect of aligning with the pharma industry?
Will the trade groups continue to be most involved before laws pass or will they sue again (consider the success or failure of the ongoing litigation in Vermont)
What is the role of other less formal groups, like the Ad Hoc Compliance group counseled by King & Spalding or the consortium of companies updated by Hogan & Hartson on reporting laws (among other disclosure or transparency laws)?
59. Still have any questions? For additional information on ExLPharmas Tracking & Reporting Aggregate Spend Conferences, please visit www.exlpharma.com

highlights from tracking & reporting aggregate spend

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