Successfully reported this slideshow.

Highlights from Tracking & Reporting Aggregate Spend



Upcoming SlideShare
Enterprise Risk Management
Enterprise Risk Management
Loading in …3
1 of 48
1 of 48

More Related Content

More from ExL Pharma

Related Audiobooks

Free with a 14 day trial from Scribd

See all

Highlights from Tracking & Reporting Aggregate Spend

  1. 1. January 12-13, 2010<br />Washington, D.C.<br />ExLPharma’s Tracking & Reporting Aggregate Spend Highlights<br />
  2. 2. Why is Training Critical to the Success of Accurate Data Capture and Reporting?<br />One of the 7 Elements of a Compliance Program<br />Process is not intuitive to many areas of business…especially commercial<br />Data systems in most organizations weren’t designed to be integrated<br />CRM<br />Accounting<br />Speaker Bureau<br />Grants <br />Effective training reduces organizational risk<br />Understanding state restrictions and accurate reporting is a shared responsibility of all employees <br />Understand<br /> the restrictions<br />and data entry process<br />Follow<br /> the guidance<br />Seek advice<br />when necessary<br />Shared<br />Responsibility<br />
  3. 3. When is the Right Time to Train on State Laws and Reporting Requirements?<br />Integrate into existing training process<br />New employee orientation and new rep sales schools<br />Ongoing training <br />Live training at meetings, e.g. brand team or sales meetings<br />Position throughout the year – “learning through repetition<br />Manager training<br />Must have understanding and “buy in” from the top down<br />Develop specific training applicable to managers<br />Refresher training<br />Sessions at meetings<br />Prior to events, e.g. American Academy of Physicians, American Society of Hospital Pharmacists <br />Booth Training for national meetings<br />
  4. 4. Comprehensive Training and Communication<br />Critical Elements to the Success of Accurate Data <br />Capture and Reporting<br />Compliance Officers<br />Policy & <br />Procedures<br />Leadership<br />Computer <br />Based<br />Client<br />Live <br />Training<br />Compliance Training<br />Newsletters<br />Webex<br />Training <br />Tools<br />Internal Website<br />
  5. 5. Who Should be Trained on State Laws and Reporting Requirements?Training by Business Areas<br />
  6. 6. Who Should be Trained on State Laws and Reporting Requirements?Training by Function<br />Commercial<br /><ul><li>Executive Leadership
  7. 7. Management
  8. 8. Employees in High Engagement Areas
  9. 9. Operations
  10. 10. Administrative Support
  11. 11. Third Parties</li></ul>Medical Affairs<br />R & D<br />Corporate Shared Service<br />(e.g. Public & Government Affairs)<br />
  12. 12. Who Should be Trained on State Laws and Reporting Requirements? Medical Affairs Example<br /><ul><li>Executive Leadership
  13. 13. Management
  14. 14. Employees in High Engagement Areas
  15. 15. Operations
  16. 16. Administrative Support
  17. 17. Third Parties</li></ul>Medical Directors<br />MSLs<br />Med Info<br />Grants Office<br />Biostatistics<br />Consultant <br />Engagements<br />
  18. 18. Focused Training for State Laws and Reporting Requirements<br />Benefits of Focused Training: <br />Relevance<br />Retention<br />Considerations for focused training:<br />Who within the department interacts with health care professionals?<br />Does the department affect the calculation and reporting of HCP payments and meals?<br />Risk areas identified in audits<br />Resource Considerations:<br />Do you have the resources (internal/external) to develop focused training?<br />Do you have a training platform than can support focused training assignments?<br />
  19. 19. Comprehensive Training and Communication<br />Critical Elements to the Success of Accurate Data <br />Capture and Reporting<br />Compliance Officers<br />Policy & <br />Procedures<br />Leadership<br />Computer <br />Based<br />Client<br />Live <br />Training<br />Compliance Training<br />Newsletters<br />Webex<br />Training <br />Tools<br />Internal Website<br />
  20. 20. Considerations for Training Senior Management<br />Organizational implications of aggregate spend gaps…spending or reporting<br />Training Venue<br />Look for existing meetings that include many of the key personnel<br />Sr. Staff Meeting<br />Executive Leadership Committee<br />Corporate Compliance Committee<br />Content: Make it relevant<br />Identify the most likely instances in which Sr. Management might encounter state restrictions<br />Headquarter and satellite locations<br />Congresses<br />International meetings involving U.S. HCPs<br />
  21. 21. Considerations for Training Senior Management<br />Engage the administrative staff<br />Administrative staff manage calendar and travel…and can provide reminders prior to travel<br />Administrative staff frequently handle expense data and can help change old behaviors.<br />Reminder of internal meal caps<br />Reminder of information needed in order to complete data entry<br />Reminder of state restrictions/prohibitions<br />Leverage existing meetings of Executive Assistants<br />
  22. 22. Comprehensive Training and Communication<br />Critical Elements to the Success of Accurate Data <br />Capture and Reporting<br />Compliance Officers<br />Policy & <br />Procedures<br />Leadership<br />Computer <br />Based<br />Client<br />Live <br />Training<br />Compliance Training<br />Newsletters<br />Webex<br />Training <br />Tools<br />Internal Website<br />
  23. 23. Training for State and Federal Reporting<br />Where should you focus your training efforts? <br />Is this an<br />Allowable<br /> Expense<br />under state <br />Regulations?<br />How should the data<br />be recorded?<br />Expense Reports<br />Tracking System<br />CRM<br />Law<br />Rules<br />Restrictions<br />Yes<br />Policy<br />Process<br />
  24. 24. Effective Training of State Laws and Reporting Requirements<br />Training Format<br />Will vary depending upon the size and resources of the company<br />Company culture<br />Computer-based<br /><ul><li>Self paced
  25. 25. Video</li></ul>Live<br />Webex<br />Conference Call<br />
  26. 26. Effective Training of State Laws and Reporting Requirements<br />Consider phases of training:<br />Phase I—Self study and completion of web-based training<br />Phase II—Live participation <br />Face to face meeting<br />Webex<br />Conference call<br />Phase III—Refresher training<br />Sessions at departmental or annual meetings<br />Prior to events <br />
  27. 27. Effective Training of State Laws and Reporting Requirements<br />Case studies are an effective way to engage employees to actively participate in the training session<br />Tailor the case study to the audience (when possible)<br />Provide scenarios that include “shades of gray”<br />Leverage manager’s influence<br />Develop Case Studies (with a trainer guide) for use by the manager<br />Remediation of improper data entry-WIIFM<br />Involvement of manager in retraining<br />Manager’s role in expense<br />
  28. 28. Comprehensive Training and Communication<br />Critical Elements to the Success of Accurate Data <br />Capture and Reporting<br />Compliance Officers<br />Policy & <br />Procedures<br />Leadership<br />Computer <br />Based<br />Client<br />Live <br />Training<br />Compliance Training<br />Newsletters<br />Webex<br />Training <br />Tools<br />Internal Website<br />
  29. 29. Monitoring an Aggregate Spend System<br />We’ve Got an App for That<br />
  30. 30. What Data Is in an Agg Spend System<br />19<br />Potentially:<br />Field sales spend on HCPs (meals/items)<br />Displays/exhibits<br />Speaker program spend (meals, speaker fees, expenses)<br />Speaker training<br />Home office meals with HCPs<br />Consultant payments <br />Advisory boards<br />Investigator payments/Trial costs<br />Grants (educational, sponsorship, IST)<br />Charitable contributions<br />Advertising costs (media, DTC)<br />
  31. 31. Risks of a Robust System<br />20<br />We’ve Got an App for That<br />What you have MORE of:<br />Data <br />From more sources<br />In more detail<br />Flexibility (being in one system)<br />Greater ability to analyze data<br />What you may NOT have more of:<br />IT headcount to continue development<br />Operational headcount to monitor data explosion <br />Headcount/expertise to analyze data<br />What may outside (OIG/AG) expectations be?<br />
  32. 32. Monitoring: What, Who, When, How?<br />21<br />What are you monitoring?<br />Accuracy & completeness of data<br />Potential policy violations<br />Who is responsible for monitoring? <br />Individuals who ‘spend’<br />Business units & departments who own or manage the spend<br />Corporate Compliance (or Dept. that reports spend)<br />When<br />Should monitoring be ‘scheduled’?<br />How<br />Making monitoring user-friendly <br />
  33. 33. Opportunities for Improved Compliance<br />22<br />Monitoring The low hanging fruit<br />Aggregate spend on individual HCP across the company<br />Dine & dash (view data by rep – multiple lunches/same day)<br />Value of items/textbooks (internal policy limits)<br />Meal policy infractions (limits, venue, prohibitions)<br />Speaker program policy infractions (attendees, venue, etc.)<br />Speaker or consultant use across all departments <br />More challenging<br />Matching product detailed to HCP specialty. Requires robust customer master data<br />Potential Conflicts of Interest<br />Identifying agg. spend across related entities (HCP/HCO)<br />
  34. 34. Auditing an Aggregate Spend System<br />
  35. 35. Importance of State Law Knowledge in Designing Audits<br />24<br />Who, What, Where and When<br />Who is the covered? doctors, nurses, managed care, hospitals<br />What is covered? Meals, consultants, clinical trials, speakers, government pricing<br />Where? Offices, hospitals, CME, conventions,<br />When? Monthly, semi annual, yearly, calendar vs other time period <br />Was this ever audited before and by whom?<br />How often?<br />Auditor experience<br />Internal and external resources<br />
  36. 36. National Verses Individual State Samples <br />25<br />Does the national sample suffice for a state?<br />Products<br />Employees <br />Field sales vs HQ<br />Location<br />HQ vs Regional Office vs R&D vs Manufacturing<br />Cost of national audit sample is much lower than sampling by state<br />100% vs some reasonable sample population<br />PhRMA Code vs State Laws<br />
  37. 37. Types of Spend to Audit & the Controls<br />26<br />What is covered?<br />Meals, consultants, clinical trials, speakers, government pricing<br />Controls<br />Policies and procedures<br />Control documents<br />invoices, contracts, expense reports, payroll expenses, accruals<br />Review and approval<br />Automated (computer generated) vs manual (signature of manager)<br />Monitoring <br />Exception Reports<br />Warning notices<br />Audits <br />
  38. 38. Audit Reports<br />27<br />Executive Summary<br />Scope and objective<br />Sample size<br />Procedures<br />Detailed observations<br />Recommendations<br />Management response; who and when<br />
  39. 39. System Involvement<br />28<br />Types <br />General ledger<br />T&E<br />Speaker<br />Grants<br />R&D spending<br />Consultant<br />Payroll<br />Seamless and transparent<br />Reconciliation<br />Audit trails<br />Reporting capability <br />
  40. 40. Pharmaceutical and Medical Device Manufacturer Conduct<br />
  41. 41. Regulations: Purpose<br />Seeks to identify and minimize potential financial conflicts of interest.<br />Seeks to ensure transparency around industry payments to health care practitioners without compromising legitimate and beneficial industry-health care practitioner interactions.<br />Seeks to place pharmaceutical and medical device manufacturers on equal footing with respect to the specific requirements of Chapter 111N.<br />Specifically incorporates requirements from the PhRMA and AdvaMed Codes of Conduct as mandated by Chapter 111N.<br />
  42. 42. Regulations: Process<br />Proposed regulations presented at December 2008 PHC meeting for informational purposes.<br />Two public hearings in January 2009.<br />Comment period closed on January 19, 2009.<br />Oral and written commentary summarized and reviewed by the Department.<br />Final regulations presented at March 2009 PHC meeting for approval.<br />
  43. 43. Who Submitted Comments?<br />Consumer advocacy groups and individual consumers<br />Pharmaceutical, Biotech and Medical Device Industry Trade Groups<br />Individual Pharmaceutical, Biotechnology and Medical Device Manufacturers<br />Health Care Practitioners<br />Visitor Industry<br />Charitable Organizations<br />Payors, Pharmacy Benefit Managers and Purchasers of Drugs, Biologics or Medical Devices <br />
  44. 44. Balancing the Interests<br />In depth analysis of testimony received.<br />Clarified the regulations where necessary.<br />Made substantive changes with 3 goals in mind:<br />To limit industry interactions with health care practitioners that may influence prescribing patterns and/or affect the care patients receive.<br />To increase transparency surrounding industry payments to covered recipients.<br />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.<br />
  45. 45. Code of Conduct Restrictions<br />
  46. 46. Who is Subject to the Code of Conduct Restrictions?<br />Pharmaceutical or Medical Device Manufacturing Companies (“PMDMC”) that employ or contract with pharmaceutical or medical device manufacturer agents, and:<br />Are engaged in the production, preparation, propagation, compounding, conversion or processing of prescription drugs, biologics, or medical devices, either directly or indirectly or<br />Are directly engaged in the packaging, repackaging, labeling, relabeling or distribution of prescription drugs, biologics or medical devices.<br />Does not include health care practitioners (“HCPs”), physician practices, hospitals, clinics, home health agencies or retail pharmacies.<br />
  47. 47. Who is Affected by the Code of Conduct Restrictions?<br />Persons who:<br />Prescribe prescription drugs for any person, and<br />Are licensed to provide health care in the Commonwealth<br />Partnerships or corporations comprised of such persons, or their agents.<br />Does not include bona fide employees or boardmembers of PMDMC, acting in their capacity as such.<br />
  48. 48. Code of Conduct<br />Prohibited <br />Activities<br />
  49. 49. General Marketing Prohibitions<br />Entertainment or recreational items of any value;<br />Payments in cash or cash equivalents either directly or indirectly except as compensation for bona fide services;<br />The provision of complimentary items such as pens, coffee mugs, gift cards, flowers, etc; and<br />Grants, scholarships, subsidies, consulting contracts, or educational items in exchange for prescribing or disbursing prescription drugs or medical devices.<br />
  50. 50. Prohibited Meals<br />Meals that are part of an entertainment or recreational event;<br />Meals that are offered without an informational presentation made by a pharmaceutical or medical device marketing agent;<br />Meals outside of a HCP’s office, hospital, academic medical center or specialized training facility; and<br />Meals provided to a HCP’s spouse or other guest.<br />
  51. 51. Prohibited Payments: CME, Conferences and Meetings<br />Financial support for the cost of travel, lodging, attendance or other personal expenses of non-faculty HCPs;<br />Direct payment of an HCP’s meals;<br />Sponsorship of CME where the sponsorship is not compliant with the commercial sponsorship standards established by ACCME or other equivalent standards.<br />
  52. 52. Code of Conduct<br />Permissible<br />Activities<br />
  53. 53. Permissible Meals<br />Modest and occasional meals in conjunction with informational sessions in specified clinical training settings.<br />Sponsorship of meals at third-party scientific, educational or charitable conferences or professional meetings.<br />Meals pursuant to a written consulting agreement for bona fide services, sponsored genuine research or clinical trials.<br />
  54. 54. Permissible Payments to Health Care Practitioners<br />Reasonable compensation for substantial professional and consulting services of an HCP for a genuine research project or clinical trial.<br />Reimbursement of reasonable costs necessary for technical training on a medical device if subject to a written agreement for purchase of the device.<br />Charitable donations.<br />The provision of price concessions, such as rebates or discounts in the normal course of business.<br />Payments for bona fide services.<br />
  55. 55. Payments Permitted for “Bona Fide Services”<br />Research,<br />Consulting,<br />Advisory Board Participation, <br />Speaker’s Bureau Participation<br />Participation in company-sponsored training and education<br />
  56. 56. Permissible Payments: CME, Conferences and Meetings<br />Permissible payments:<br />Compensation and reasonable expenses of conference faculty.<br />Sponsorship - where the payment is made directly to the conference or meeting organizers.<br />
  57. 57. Institutional Disclosures<br />How do we prepare company leadership for increased institutional disclosure requirements in advance of federal disclosure?<br />Follow-up: How do we prepare HCPs for increased institutional disclosure requirements in advance of federal disclosure? <br />How are institutional disclosure requirements reshaping pharmaceutical Marketing?<br />Follow-up: How are institutional disclosure requirements reshaping Compliance?<br />Who are the company stakeholders in the institutional disclosure debate?<br /> Follow-up: Who is the ultimate decision maker?<br />How do we assess the potential impact of institutional disclosures to the company?<br />Follow-up: To HCPs? To the institution?<br />
  58. 58. Will trade associations continue to be involved?<br />How will AdvaMed, PhRMA, BIO and similar organizations continue to be proactive?<br />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.<br />Can industry through the trade groups gain more participation from medical and patient groups?<br />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?<br />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)<br />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)?<br />
  59. 59. Still have any questions? For additional information on ExLPharma’s Tracking & Reporting Aggregate Spend Conferences, please visit<br />