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Global Aggregate Spend and Transparency Reporting

May 15 2012May 15, 2012

The Global Movement to TransparencyThe Global Movement to Transparency

• We have witnessed significant parallels between the U.S. and rest of world g prelated to the development around, and enforcement of, laws, regulations and industry guidances

Industry Codes of Conduct (PhRMA Code IFPMA Code) Industry Codes of Conduct (PhRMA Code IFPMA Code)

Payments to Healthcare Professionals (Federal False Claims Act FCPA)

Data Privacy (HIPAA EU Data Protection)Data Privacy (HIPAA EU Data Protection)

State Laws Local Country Laws

• Now global entities are focused on Transparency, specifically as it relates to how, and how much, companies are spending money on health care professionals, organizations and other related entities

Slide 2

Evolving Global Regulatory LandscapeEvolving Global Regulatory Landscape

Healthcare Compliance Legislation and Regulatory Guidelines p g g yTimeline

Slide 3


Scrutiny of pharmaceutical, medical device, and biotech business y ppractices has spread beyond the US borders

Increasingly complex and changing global regulatory and public landscapeIncreasingly complex and changing global regulatory and public landscape• At least 8 countries have existing disparate legislation setting compliance

requirements, limits on industry engagement, and payments to customers and/or requiring the disclosure of these payments & costsand/or requiring the disclosure of these payments & costs

• Some countries have even mandated pre-approval prior to engaging a covered recipientM i ill b i di i d i• More countries will be passing distinct aggregate spend requirements

• Codes of Conduct and industry trade group regulations can also impart pre-approval and disclosure requirements

Slide 4


New legislations and Industry Codes of Conduct that govern the way g y g ythe pharmaceutical industry interacts with Covered Recipients are being introduced around the globe to varying degrees

Type of Requirement Implication

Pre-Approval Prior to contracting with a Covered Recipient, pre-approval needs to be sought from a designated agency

Disclosure of the amount and/or frequency and/or source of transfers of value to Covered Recipients

Disclosure

transfers of value to Covered RecipientsAggregate Disclosure:

Requires a company to di l th t t l b

Individual-Level Disclosure:

Required the disclosure of th t d i i t

Cross-BorderDisclosure:

Disclosure of transfers of l t C dDisclosure disclose the total number

of Covered Recipients engaged and total value of transfers made in any given year, without indi id al le el

the amount and recipient of each individual transferof value made in a given year.

value to Covered Recipients even if they are incurred outside of home country borders

individual level disclosures.

Slide 5

Evolving Global Regulatory LandscapeEvolving Global Regulatory LandscapeContinued Focus on Transparency – Enacted/Pending Global Legislation

Countries with Existing Relevant Legislation

Countries with LegislationCountries with Legislation requiring Covered Recipient Disclosure and/or Pre-Approval

**”Relevant” legislation encompasses all legislation that requires pharmaceutical companies to disclose payments made to HCPs (including tax legislation)Slide 6

Evolving Global Regulatory LandscapeEvolving Global Regulatory LandscapeContinued Focus on Transparency – Industry Trade Group Regulations

Countries with Industry Trade Group Regulations

Countries with Industry TradeCountries with Industry Trade Group Regulations requiring Covered Recipient Disclosure and/or Pre-Approval

Slide 7

Evolving Global Regulatory LandscapeEvolving Global Regulatory LandscapeCode or

LegislationExisting Upcoming Pending Cross-

BorderDisclosure Timeline

France Sunshine ActCSP, DOMS

• Data Capture: January 2012• Reporting: August, 2012; every 6 months

Spain Tax Legislation (RD 1065, ’07)

• Individual payments must be reported to local tax authorities monthly• Summary declarations (total amount spend/any withholdings) reportedannually

India Tax Legislation • Currently capturing and reporting for tax purposes (annually)

Korea KRPIA

• Data Capture: Within 1 month of event• Reporting: Published by the KRPIA; for sponsorship payments,published the preceding quarter every January, April, July, andOctober

Australia Medicines Australia

• Data Capture: Currently capturing for spend at Educational Events• Reporting: Currently every 6 months

GreeceNational Organization of Medicines

• Since January 1, 2010, payments to Covered Recipients (domestically orcross border) must be submitted to the National Organization of Medicines

United States Sunshine Act

• Data Capture: TBD in 2012• Reporting: March 31, 2013; Yearly thereafter

United Kingdom

ABPI 2011 Code of C d t

• Data Capture: 2012 for donations and sponsorships and individualfee-for service, May 1, 2011 for all projects with patient groups (over250 pounds)R ti Withi 3 th f th d f th ’ fi i lg Conduct • Reporting: Within 3 months of the end of the company’s financial year;Yearly thereafter

Japan JPMA • Data Capture: FY2012• Reporting: FY2013; Yearly thereafter

Thailand Act of Public H lth

• Will be required to report payments to individual Covered RecipientsllThailand Health annually.

Nether-lands NEFARMA

• Payments to Covered Recipients/HCOs beyond 500 EUR per year must bepublished within 3 months after the year the financial relation becameeffective

Slide 8

What does this mean for industry?What does this mean for industry?

Scenarios to Consider

• Cross-border contracting of covered recipient

• Covered recipient used for research and commercial activities

• Covered recipient contracted in several countries

Slide 9

Scenario #1 Covered Recipient Contracted CrossScenario #1 – Covered Recipient Contracted Cross-Border

Who should manage theWhich Biz unit is Should each Biz Unit manage the

process associated with the PoTV for

an HCP?

Which Biz unit is responsible for

reporting the PoTV?

have a MDM for covered recipient

validation?

HCP licensed i GBin GB

1. Promotional Event in France

How should Biz

Event in France

How should Biz Units share PoTV information with Source Biz Unit?

How will the PoTV be captured and

reported?Slide 10

Scenario #2 HCP used for clinical and marketingScenario #2 – HCP used for clinical and marketing

Who should manage the Which Biz Unit is Should each Biz Unit

h MDM fgprocess associated with the PoTV for

an HCP?

c U t sresponsible for

reporting the PoTV?

have an MDM for covered recipient

validation?

HCP licensed in Francein France

2. Advisory Board in France

1. Research in S i f B d XBoard in France

for Brand X

How should Biz Unit share PoTV How will the PoTV

be captured and

Should we enable Global visibility into the engagement of

Spain for Brand X

information with Source Biz Unit

be captured and reported?

g gthe same HCP

across all of the Biz Units?

Slide 11

Scenario #3 HCP is Engaged by Multiple Biz Scenario #3 – HCP is Engaged by Multiple Biz Units to perform similar activities

Which Bi UnitWhich Biz Unit determines the Fair

Market Value?

Which Biz Unit is responsible for

reporting the PoTV?

How will the PoTV be captured and

reported?reporting the PoTV? reported?

HCP licensed in GB

How do you ensure the correct data is

collected?Slide 12

The Vision: End to end Global HCP spend The Vision: End-to-end Global HCP spend management

Companies are starting to take a complete HCP Spend Management approach from the initiation of an activity and budget planning through reporting to enable consistency and compliance through the entirety of reporting to enable consistency and compliance through the entirety of the business process

Activity and Budget

PlanningApproval Activity

Execution Tracking Reporting

As-is Reporting

Complete Tracking

F ll S d M tFull Spend Management

Slide 13

Aggregate Spend Solution ComponentsAggregate Spend Solution ComponentsThe following areas represent the solution components that need to be addressed as part of the Aggregate Spend future state design

Compliance

Reporting

Governance

Master Data Management

Reporting

Data Sources and Supplement/Remediate Data

Slide 14

Data Sources and Supplement / Remediate DataData Sources and Supplement / Remediate DataData sources must be addressed through modification, supplementation of transactional data, and/or training to address data capture gaps

• Global Inventory

• Documented Legal Interpretation

• Common Definitions Framework

• Data Capture Requirements

• Evaluation of Current Data Capture Systems

• Capture Interaction Details

Governance

Compliance• Capture Interaction Details

• Third-Party Data Entry

• Add Missing Data


Reporting

Add Missing Data

• Remediate Data Gaps


Slide 15

Master Data ManagementMaster Data ManagementMaster data initiatives can reduce data remediation needs

• HCP & HCI Profiles & Unique IDs

• Align Transactions to Unique HCPs and HCOs

• International Customer Masters

• Identify Global KOLs

• Acquire Unique IDs and Tie to Master Data List

Governance

Compliance


Reporting


Slide 16

ReportingReportingA reporting solution will act as the central repository for data and must be considered as part of the overall picture

• Consolidate Transactions

• Apply Business Rules

• Generate Spend Disclosure Reports

• Generate Additional Reports and Analysis

• Off-the-Shelf Solution vs. Outsourced

• Data Privacy and Protection• Data Privacy and Protection

Governance

Compliance


Reporting


Slide 17

GovernanceGovernanceNew Processes, Standards, and Roles to Support Change

• Ownership and Accountability

• Organizational Support

• Data Standards

• Center of Excellence (COE)

• Risk and Regulatory

Governance

Compliance


Reporting


Slide 18

GovernanceGovernance• Scope identification • Modifications to front-end systems• Data standards/system interfaces

D lid i d h dli

Source System Data

Gathering

Aggregate Spend

• Data validation and error handling

• Central data repository• Third-Party vendor portals• Master Data alignment

• Customer communication• Customer inquiries• Dispute processing

Gathering

Customer Inquiries

Data Aggregation & ReconciliationAggregate Spend

Support Framework

g• Validation of completeness

and accuracy• Corrections and reporting• Maintenance of web

reporting

Reconciliation

• Establish BI/Reporting framework• Apply business rules• Generate regulatory reports• Generate additional analysis

• Review and sub-certifications• Report modifications• Trending and outliers• Overall certification and submission• Validation through audit

Generating Reports & Insights

Certification &

Submission

Aggregate Spend Governance

Communication & Change Managementg g

Monitoring

Auditing

Slide 19

ComplianceComplianceEstablishing a Compliance Program allows manufacturers to meet state, federal, and international requirements and implement a robust Aggregate Spend SolutionSpend Solution

• Code of Conduct• Code of Conduct

• Common Definitions Framework

• Policies and ProceduresPolicies and Procedures

• Prohibited Interactions

Governance

Compliance


Reporting


Slide 20

Global implicationsGlobal implications

• Expanded number of data sources with varying levels of data details

• Management of HCP engagements requires greater coordination a age e t o C e gage e ts equ es g eate coo d at o (e.g., business justification, FMV, spend caps)

• Alignment needed of multiple customer masters with a variety of i IDunique IDs

• Technology systems needed to support global requirements and reportingreporting

• Global roles will need to be defined and responsibilities will need to be shared across organizational boundaries and borders

• Coordinated efforts to successfully achieve global compliance oversight

Slide 21

Q&A ForumQ&A Forum

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