global transparency requirements: pharmaceuticals & life sciences
DESCRIPTION
Implementing an aggregate spend program in a global marketplace. Treating industry codes, laws, and regulations without considering the broader global transparency landscape, is not an option if companies intend to develop smart transparency approaches and supporting models that more efficiently and effectively address what is required of them. Many of the regulations and requirements imposed on pharmaceutical and life sciences companies have commonalities that create opportunities for businesses to incorporate process efficiencies and economies of scale when developing their transparency strategies. More: http://www.pwc.com/us/en/health-industries/publications/efpia-and-o-us-transparency-requirements.jhtmlTRANSCRIPT
www.pwc.com/us/aggregatespend
EFPIA and O-USTransparency Requirements:Implementing an aggregate spendprogram in a global marketplace
February 2014
PwC
Today’s Presenters
David Wysocky – Principal, Advisory Pharma & Life Sciences
Bharathram Lakshmivarahan, Director, Advisory Pharma &Life Sciences
Alexis Wong – Manager, Advisory Pharma & Life Sciences
Sarah Volden – Manager, Advisory Pharma & Life Sciences
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Agenda
• Evolution of global transparency landscape
• Defining a path to implement a global transparency program
– Identify inputs that will shape your global transparencypolicy
– Define your transparency vision and goals
– Define your optimal framework
– Evaluate your assets
– Define the operational model that fits your organization
• Conclusion
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Evolution of global transparencylandscape
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The evolution of global transparency
PhRMA CodeJuly 2002
AdvaMedCodeJan. 2004
US OIGComplianceGuidanceApr. 2003
AustralianCompetition &ConsumerCommissionMar. 2007
JPMA (Japan)PromotionCodeMay 2008
US HealthcareReformMar. 2010
Revised ABPICode ofPracticesJan. 2011
EFPIA DataCollectionCY 2015
• Belgium’sMedicinesActMay 2006
• ABPI (UK) Codeof PracticesMay 2006
First EFPIADisclosureReport 2016
• RevisedPhRMA CodeJan. 2009
• RevisedAdvaMed CodeJuly 2009
• Revised ABPICode ofPracticesJan.2014
• FrenchSunshineAct Report DueFeb. 2014
• First USSunshineReportDue Mar. 2014
• US Sunshine ActFeb. 2013
• French Sunshine ActMay 2013
• EFPIA DisclosureCode June 2013
• French Sunshine ActReport Due Aug.2013
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Global aggregate spend benchmarking: Operations
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Reported dedicated resources for O-US aggregate spend programs:
4-6
7+
November 2012
0-3
4-6
7+
September 2013
• Based on the decrease in ‘Unknown’ responses, companies are starting to instituteresources to handle in-country global requirements.
• Most companies still do not have a global strategy in place and many companiesreported a desire for better global alignment and capabilities.
• Will be a key focus of pharma companies in 2014 with EFPIA going into effect in2015.
Unknown
UnknownUnknown
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Global aggregate spend benchmarking: Resources
Companies who have implemented a software-based reportingsolution/system for:
90%
10%
U.S. State & Federal Reporting
Yes No
15%
85%
Global Reporting
Yes No
• A majority of companies have implemented a software-based reportingsolution/system for U.S. State and Federal Reporting, but not for global reporting.
• 35% of respondents reported that the company changed solution/system vendorsduring an implementation, indicating a general dissatisfaction with vendors.
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Defining a path to implement a globaltransparency program
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Your path to a global transparency program
Identify inputs thatwill share your globaltransparency policy
Define yourtransparency visionand goals
Define your optimalframework
Define the operationalmodel that fits yourorganization
Evaluate your assets
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1 - Identify inputs that will shape yourglobal transparency program
2 - Define your transparency vision andgoals
3 - Define your optimal framework
4 - Evaluate your assets
5 - Define the operational model that fitsyour organization
Your path to a global transparency program
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Identify inputs necessary to define globaltransparency
Local Country Laws
U.S.
EFPIAIndustryCodes &
Guidelines
• French “Sunshine”Decree no. 2013-414
• EFPIA Disclosure Codeimpacting 33 Europeancountries
• Federal Sunshine Act
• State TransparencyLaws
• EFPIA MemberAssociations’ nationalcodes
• Japan – JPMATransparencyGuideline
• Australia – MedicinesAustralia Code ofConduct, Ed. 17
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Member Associations’ codes of conduct
• EFPIA Member Associations required to completely integrate the Disclosure Code intotheir national codes by December 31, 2013
• 33 EFPIA Member Associations
• As of January 2014, approximately 11 Member Associations have published updatednational codes reflecting the EFPIA Disclosure Code requirements, including:
- Bulgaria (ARPharM)
- Estonia (APME)
- Finland (PIF)
- Greece (SFEE)
- Ireland (IPHA)
- Italy (Farmindustria)
− Latvia (SIFFA)
− Norway (LMI)
− Portugal
− Slovenia (EIG)
− The United Kingdom (ABPI)
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Member Associations’ codes of conduct (continued)
• Generally, for Member Associations that adopted the EFPIA Disclosure Code haveadopted it as the code has been written with minor variations
• Member Associations’ variations to the EFPIA Disclosure Code include:
- Disclosure of transfers of value related to marketing, promotion, and R&D ofprescription drugs (Bulgaria)
- Express consent to disclose information from Covered Recipient
◦ Written consent required by SFEE (Greece), Farmaindustria (Italy), EIG (Slovenia)
◦ Contractual consent encouraged by ABPI (UK)
◦ Covered Recipient consent to disclosure may be revoked
- Disclosures published in local language
◦ Many Member Associations also encourage dual disclosure in English
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Member Associations’ codes of conduct (continued)
• Modes of Disclosure
- ABPI (UK) to decide by the end of 2014 whether to develop a central disclosureplatform
◦ Current requirement is to disclose via company websites
- SIFFA (Latvia) intends to create a common database for disclosure, and will permitcompanies to choose whether to disclose via the database or company website
- The Netherlands Transparency Register is a central platform that has been requiredfor annual disclosures since 2012
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1 - Identify inputs that will shape yourglobal transparency program
2 - Define your transparency vision andgoals
3 - Define your optimal framework
4 - Evaluate your assets
5 - Define the operational model that fitsyour organization
Your path to a global transparency program
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Define your transparency vision and goals
• Do I want solely to meet transparency requirements?
• Or do I also want to use the data I collect to accomplish more (e.g., conduct analytics such thatshed light on the performance of compliance controls, investments with HCPs and the impact ofdifferent types of promotional and non-promotional activities)?
Purpose
• What is the scope of my global transparency program?
• What are my key responsibilities?
• How can I realistically operate a global transparency program?
Roles & Responsibilities
• What resident subject matter experts, skilled workers, and support staff will I need to run a globaltransparency operation and execute the key responsibilities I’ve defined?
• Can I leverage my US resources and expertise?
• What cross-functional areas will my company need to support the build, implementation, andexecution of my program?
Talent Management
• What are the types and depth of the training and communications programs that will be necessaryto implement my global transparency program?
• What do I want to communicate to my stakeholder groups so they will understand transparencyand its associated reporting requirements?
Communication & Training
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1 - Identify inputs that will shape yourglobal transparency program
2 - Define your transparency vision andgoals
3 - Define your optimal framework
4 - Evaluate your assets
5 - Define the operational model that fitsyour organization
Your path to a global transparency program
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Optimal framework key considerations
• What are the pros/cons of implementing a local, regional, or global approach to transparency?
• How can I leverage existing and planned organization structures, processes, and systems?
• What is an appropriate level of governance, collaboration, coordination, and visibility regardingHCP/HCO spend across the countries that require some form of transparency disclosure?
Governance
• Which existing country-specific compliance, policy, and control considerations can I expand uponor leverage?
• What existing safe harbor considerations and local country privacy laws affect tracking andreporting cross-border spend?
Policy, procedures and controls
• How can I capture, maintain, and report cross-border HCP engagement activity?
• Which of my funding, resource, timing, and capability constraints may impact my ability toeffectively operate?
• What other dependent, existing, or planned investments in systems and data upgrades should Iconsider to promote implementation success?
• Will I manage transparency reporting in-house, outsource it to a third-party vendor, or achieve itthrough a combination of in-house/outsourcing?
• What lessons learned/assets can I leverage from my US efforts?
Resources and investments
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Define your optimal frameworkGovernance
+ Ownership of transparency andaccountability at the countrylevel
- Limited learning, synergies, andstandardization across theorganization
- Inconsistent data review andcertification processes
- Inconsistent transparencydefinitions and documentation
+ Ability to develop synergies andstandardization across a region
+ Oversight and ownership ofprogram across the region
+ Consistent transparency policiesand procedures across theregion
- Data privacy laws may limitability to standardize programand share information across theregion
- Limited accountability forprogram at a local level
+ Clearly defined ownership andaccountability across theorganization
+ Centralized oversight of alltransparency activities across theorganization
+ Consistent and standardtransparency policies andprocedures across the organization
+ Ability to share and implement localleading practices and local lessonslearned across organization
- Data privacy laws may limit ability toshare information across borders
- Neglecting local sensitivities andexpectations
- Organizational-level accountabilityfor local affiliate violations
Local Regional Global
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Define your optimal frameworkSource Systems, Data Capture & Remediation
+ Limit data captured to only thatwhich is required for reporting
- Lack of visibility into interactionswith local HCPs by regionalaffiliates
- Inconsistent use of sourcesystems by local affiliates
+ Consistency in HCP/HCO datacaptured across the region
+ Consistent use of sourcesystems across the region
- Requires capture of data andinformation that may not berequired for reporting in severalcountries in the region
- Requires compliance withstrictest data capturerequirements in the region
+ Standard terms, definitions,processes, and source systemsto capture transaction data
- Update to local law/regulationimpacts data collection acrossorganization
- Requires compliance withstrictest data capturerequirements
Local Regional Global
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Define your optimal framework
+ Ease of developing,implementing, and maintaining alocal customer master list
+ Avoid duplicative entries for thesame recipient in a singlecustomer master list
- Inability to identify cross-borderspend
- Limited visibility into HCP/HCOspend in other countries
+ Regional unique customermaster identifier
+ Ability to identify cross-borderspend within the region
- Data processing across theregion is difficult
- Recipient identifying informationvaries among countries in aregion
- Differing unique identifiers acrosscountries
- Potential for duplicative entries
- Limited ability to identify cross-border spend outside of theregion
+ Unique HCP/HCO profile acrossthe organization
+ Uniform information available forall HCPs/HCOs
+ Complete list of globalHCPs/HCOs
+ Updates to customer master listavailable to entire organization
- Potential for duplicative entriesfor those customers located inseveral countries
- Recipient identifying informationvaries among countries
Master Data Management
Local Regional Global
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Define your optimal framework
+ Tailored business rules to meetlocal requirements
+ More flexibility to updatereporting processes and toupdate reports
- Interpretation of requirementsinconsistent among each localaffiliate
- Lack of visibility into HCP/HCOspend in other countries
- Potential for incompletereporting
- Inconsistent approach toresolving inquiries and disputes
+ Greater scalability andautomation of manual reportingprocesses
+ Greater visibility into cross-border activities
+ Consistent approach to resolvinginquiries and disputes within theregion
- Concerns with report quality andcompleteness due to largevolume of transactions
- Larger volume of inquiries anddisputes
- Security and access to reports
+ Consistent process forconsolidating transactional databased on uniform business rulesto generate reports
+ Consistent approach to resolveinquiries and disputes ofreported data
+ Greater automation of manualreporting processes
- Concerns with report quality andcompleteness due to largevolume of transactions
- Large volume of inquiries anddisputes
- Requires certification oftransactions across severalregions
Reporting
Local Regional Global
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Leveraging lessons learnedAs companies adjust to the evolving global transparency landscape, they should reachout to their counterparts in other countries and leverage the lessons those counterpartshave learned as they created their own transparency programs. Companies shouldincorporate these lessons learned when determining their overall transparencystrategy.
Governance Policies andGuidelines
BusinessProcesses
Systems andData
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1 - Identify inputs that will shape yourglobal transparency program
2 - Define your transparency vision andgoals
3 - Define your optimal framework
4 - Evaluate your assets
5 - Define the operational model that fitsyour organization
Your path to a global transparency program
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Evaluate your assetsOnce a company has identified its transparency program options, it should next determinewhich key drivers impact its ability to implement the program.
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GovernanceOrganization
Reporting
Master datamanagement
Source systems,data capture and
remediation
Talent managementand resourcing
What talent /resources are
needed to supportprogram
implementation &operations
To what extent do weneed standardizerecipient profile
information for moreaccurate reporting
How can wedevelop, review,
finalize andgenerate reports fordisclosure (leverage
existing orpurchase systems,outsource, build)
How do we align thegovernance structure
to implement theprogram options
What sources dowe need toevaluate,
standardize orenhance toimplement
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Data privacy considerations: EU-US data transferrestrictions example
The Issue: The EU Data Protection Directive prevents the transfer and access of EEA-related business and employee data to countries that are deemed “inadequate” such as theUS.
Trans border Date Flows
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EU trans-border data transfer options
• In 2000, the U.S. and the EU entered into a “Safe Harbor Agreement” which allows companies operating in theU.S. to be deemed “adequate” on a company basis for receipt of personal data transferred out of the EEA upon thecondition that the certifying company agrees to abide by seven data handling principles and annually certifycompliance therewith.
Safe Harbor
• The International Chamber of Commerce developed standard privacy terms that have been deemed “adequate” ona contract basis in contracts for transactions involving the transfer of PII processed in the EEA to the U.S. thatprovide privacy guarantees and explicitly subject the U.S. business to the jurisdiction of EU DPAs. These contractsoften have high compliance standards.
Model Contracts
• Similar to a global privacy policy or a corporate code of conduct requiring the approval of each DPA in the countriesin which data is being transferred out of the EEA, binding corporate rules (“BCR”) is a new, untested potentiallycost-effective way to attain adequacy if a company is not in all EEA countries. In general, it is difficult to attainconsensus among DPAs.
Binding Corporate Rules
• Many companies do not use consent for Customer trans-border data transfers as the EU data protection authorities(DPAs) generally do not recognize consent as being valid or freely given in the Customer context, however,consent in the form of opt-in for commercial data is often considered a sufficient method of compliance.
Consent
Due to international data transfer restrictions, there has been several mechanisms that have been put in place in order totransfer data in a compliant manner. The following are some of the compliance mechanisms available for the internationaltransfer of data:
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1 - Identify inputs that will shape yourglobal transparency program
2 - Define your transparency vision andgoals
3 - Define your optimal framework
4 - Evaluate your assets
5 - Define the operational model that fitsyour organization
Your path to a global transparency program
PwC
Define the operational model that fits yourorganization
Individual companies should define a global strategy and operational model to supporttheir transparency program. Considerations can include:
• Define the program’s governance, roles, and responsibilities across the organization
• Detail the resources, activities, timing, budget, and deliverables necessary to operateand manage the day-to-day operations of the program
• Develop data and process standards, focusing on the creation, update, approval,implementation, and enforcement of requirements to provide consistency andpreserve data quality
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Conclusion
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Questions?
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Contacts
David J. Wysocky, Principal
Pharma & Life Sciences – GlobalTransparency
+1 (973) 641-2040
Alexis Wong, Manager
Pharma & Life Sciences – GlobalTransparency
+1 (267) 275-1319
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Bharathram Lakshmivarahan, Director
Pharma & Life Sciences – GlobalTransparency
+1 (917) 747-0767
Sarah Volden, Manager
Pharma & Life Sciences – GlobalTransparency
+1 (323) 528-8158
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