EFPIA Pharma Transparency Code - EFPIA Disclosure Code

© b2b-compliance.com 2013 1
The EFPIA
Transparency
Code
A critical view on the new EFPIA Pharma Transparency (Disclosure) Code

Your benefits from this presentation
 Get an overview over the pharma transparency initiative in the
EU that will be binding for all EFPIA members as of 2015
 Understand the red flags that are related to this approach
compared to other pharma sunshine laws in the world
© b2b-compliance.com 2013 2

The EFPIA HCP/HCO Disclosure Code was
announced July 2, 2013
• The European Federation of Pharmaceutical Industries and Associations
(EFPIA) announced on July 2, 2013, the release of its disclosure code of
transfers of value to healthcare professionals and organizations.
• The code* requires all members of EFPIA to disclose transfers of value
to Healthcare Professionals (HCP’s) and Healthcare Organizations
(HCO’s) as of 2016 regarding all transfers in 2015 (=first reporting
period).
*Full title: ”EFPIA Code on disclosure of transfers of value from pharmaceutical companies to
healthcare professionals and healthcare organizations (EFPIA HCP/HCO Disclosure Code)”
3© b2b-compliance.com 2013

Scope of application
• EFPIA members include national pharmaceutical associations in over
thirty European nations and nearly forty leading multinational
pharmaceutical manufacturers.
• Due to its broad membership, EFPIA is able to exert significant influence
over European pharmaceutical codes and, consequently,
pharmaceutical manufacturers operating in Europe.

Motivation for Code development
• The public perception in Europe – fueled by many cases reported in the
mass media - of interactions between the pharma industry and doctors
is still driven by a subliminal suspicion of corruption (pharma
companies paying doctors to prescribe their medicines).
• Similar to all other EFPIA initiatives, EFPIA’s goal is to develop standards
for self-regulation across the pharmaceutical industry in Europe in order
to avoid that national and/or EU legislation implements applicable laws
and regulations.
• In the U.S. pharma companies are forced by law (so called sunshine
laws) to disclose payments to doctors - EFPIA is trying to prevent
disclosure obligations by law with this voluntary disclosure code.

Code Content (Articles)
1. Disclosure Obligation
2. Form of Disclosure
3. Individual and Aggregate Disclosure
4. Enforcement
5. Amendments to, and guidance regarding compliance with, the code

Article 1 – Disclosure obligation
• Member companies shall disclose all transfers of value, directly and
indirectly to HCP’s and HCO’s.
• Excluded from disclosure requirements:
• Items that are solely related to over-the-counter medicines
• Items not listed in Article 3 of the Code, such as items of medical utility
• Meals and drinks
• Gifts
• Samples
• Products that are part of ordinary course purchases and sales of Medicinal
Products by and between a Member Company and an HCP (such as a
pharmacist) or an HCO

Article 2 – Form of Disclosure
• Disclosures shall be made on an annual basis, the first reporting period
is the calendar year 2015 (to be reported in 2016).
• Disclosures shall be made by each member company within 6 months
after the end of the relevant reporting period and the information shall
remain publicly available for a minimum of 3 years (exceptions apply).
• Disclosure can be made via members’ website or a central platform.
• Disclosures shall be made pursuant to the national code of the country
where the recipient has its physical address.
• Supporting documentation for disclosed transactions must be archived
for at minimum 5 years (e.g. agenda of medical event, contracts etc.).

Article 3 – Individual and Aggregate Spend
• As a general rule, transfers of value must be disclosed on an individual
basis. The reporting entities are either individual HCP’s (doctors, nurses
etc.) or HCO’s (hospitals, research organizations etc.).
• Aggregate (non-individual) disclosure for transfers of value is only
permitted if legal restrictions apply (i.e. data privacy) or if the
transaction can not be reasonably allocated to the categories defined
for individual spend.

Article 3 – Individual Spend disclosure for HCO’s
• Donations & Grants to HCO’s
• Contribution to costs of events
• Sponsorship agreements with HCO’s and third parties appointed by HCO’s
to manage an event
• Registration fees
• Travel & accommodation
• Fee-for-service & consultancy
• Fees
• Related expenses agreed in the fees for service or consultancy contract

Article 3 – Individual Spend disclosure for HCP’s
• Contribution to costs of events
• Registration fees
• Travel & accommodation
• Fees for service & consultancy
• Fees (e.g. for speaker engagements, advisory boards etc.)
• Related expenses agreed in the fees for service or consultancy contract

Article 3 – Aggregate disclosures
• Research & Development: Transfers of value to HCP’s/HCO’s related to
the planning and conduct of:
• Non-clinical studies (as defined in the Organization for Economic
Cooperation and Development (OECD) Principles of Good Laboratory
Practice)
• Clinical trials (as defined in Directive 2001/20/EC)
• Non-interventional studies that are prospective in nature and that involve
the collection of patient data from or on behalf of individual, or groups of
HCP’s, specifically for the study

Article 4 – Enforcement
• National EFPIA member organizations shall adopt implementation and
procedure rules – requirements must be included in national codes by
December 31, 2013.
• Deviations are only permitted where needed based on national laws
and regulations. EFPIA Code is setting minimum standards.
• Each national member organization shall define the sanctions for
infringements. Financial fines and public disclosure is recommended as
most effective method of sanction.
• EFPIA shall report annually on the transposition into national codes and
on the implementation for the first reporting period (2015).

How much sunshine are we seeing?

How much sunshine are we seeing? 10 red flags
1. The EFPIA transparency code is definitely a step into the right direction;
however, a self-regulation is never as powerful as a law to build trust
and to create confidence in the public opinion.
2. Like with other EFPIA requirements (e.g. hospitality), the sanctions for
breaches of the code are soft compared to the risk of legal liability (civil
and criminal).
3. The EFPIA transparency code has a significant scope limitation
compared to other “sunshine laws” in the world. For instance, there are
no reporting obligations for gifts and hospitality to individual HCP’s.

4. The success of the initiative depends on the willingness of the HCP’s to
cooperate. Following the EU Data Privacy Requirements, HCP’s have to
give their consent before data can be disclosed. HCP’s might even
revoke their consent after a transaction was realized which would
prevent the pharma company from disclosure. As long as there is no
legal basis, disclosure of HCP transactions can not be enforced.
The transparency initiative will fail, if a significant number of HCP’s
decides against disclosure of their legally protected personal data.

5. The disclosed transactions will not be subject to statutory audits by
external auditors as long as they are not legally required. Independent
control of disclosures is missing.
6. To assess the quality of disclosed data, interested parties should
compare marketing expenses reported per P&L statements(as of FY
2015) with disclosed transactions to HCP’s and HCO’s. The bigger the
gap, the more reason there will be to challenge the quality of the
disclosed data.
7. The EFPIA code is not proposing to apply a cap (threshold) to individual
HCP or HCO spend. However, disclosure obligations might put pressure
on member companies to implement caps voluntarily.

8. Experience in the past has proven that HCP’s can be very creative to
set up business models to conceal direct payment flows. Payments via
third party entities might be used to conceal direct relationships
between pharma companies and final recipients.
9. Multinational pharma companies can use their international
structures to make payments to HCP’s from subsidiaries that are not
subject to the EU transparency regulations.
10. Pharma companies based outside the EU, operating purely with
agents on EU markets, are not tied to EU transparency obligations.

Resume
• The transparency initiative of EFPIA is a logic step following
international trends and pressure from the public opinion.
• In the current form, there are significant red flags the can seriously
jeopardize the success of the initiative.
• All affected parties should seriously work on proper implementation
and accept the obligations under the self-regulation.
• If stakeholders in the pharma industry fail to do so, it will just be a
question of time until a “sunshine law” will be implemented.
http://unsere-erfahrung-mit-jetzthaus.blogspot.de/

EFPIA Pharma Transparency Code - EFPIA Disclosure Code

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