Published on February 18, 2014
www.pwc.com/us/aggregatespend EFPIA and O-US Transparency Requirements: Implementing an aggregate spend program in a global marketplace February 2014
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 PwC February 2014 2
Agenda • Evolution of global transparency landscape • Defining a path to implement a global transparency program – – Define your optimal framework – Evaluate your assets – PwC Define your transparency vision and goals – • Identify inputs that will shape your global transparency policy Define the operational model that fits your organization Conclusion February 2014 3
Evolution of global transparency landscape PwC February 2014 4
The evolution of global transparency • US Sunshine Act Feb. 2013 • French Sunshine Act May 2013 • EFPIA Disclosure Code June 2013 • Belgium’s MedicinesAct May 2006 PhRMA Code July 2002 2002 2003 US OIG Compliance Guidance Apr. 2003 AdvaMed Code Jan. 2004 2004 • ABPI (UK) Code of Practices May 2006 2005 2006 JPMA (Japan) Promotion Code May 2008 2007 Australian Competition & Consumer Commission Mar. 2007 2008 • French Sunshine Act Report Due Aug. 2013 US Healthcare Reform Mar. 2010 2009 2010 • Revised PhRMA Code Jan. 2009 • Revised AdvaMed Code July 2009 2011 Revised ABPI Code of Practices Jan. 2011 2012 2013 2014 EFPIA Data Collection CY 2015 2015 • Revised ABPI Code of Practices Jan.2014 2016 First EFPIA Disclosure Report 2016 • French Sunshine Act Report Due Feb. 2014 • First US Sunshine Report Due Mar. 2014 PwC February 2014 5
Global aggregate spend benchmarking: Operations Reported dedicated resources for O-US aggregate spend programs: September 2013 November 2012 4-6 0-3 Unknown 7+ 4-6 Unknown Unknown Unknown 7+ • Based on the decrease in ‘Unknown’ responses, companies are starting to institute resources to handle in-country global requirements. • Most companies still do not have a global strategy in place and many companies reported a desire for better global alignment and capabilities. • Will be a key focus of pharma companies in 2014 with EFPIA going into effect in 2015. PwC February 2014 6
Global aggregate spend benchmarking: Resources Companies who have implemented a software-based reporting solution/system for: U.S. State & Federal Reporting Global Reporting 10% 15% 85% 90% Yes No Yes No • A majority of companies have implemented a software-based reporting solution/system for U.S. State and Federal Reporting, but not for global reporting. • 35% of respondents reported that the company changed solution/system vendors during an implementation, indicating a general dissatisfaction with vendors. PwC February 2014 7
Defining a path to implement a global transparency program PwC February 2014 8
Your path to a global transparency program 1 Identify inputs that will share your global transparency policy 2 Define your transparency vision and goals 5 3 Define the operational model that fits your organization Define your optimal framework 4 Evaluate your assets PwC February 2014 9
Your path to a global transparency program 1 - Identify inputs that will shape your global transparency program 2 - Define your transparency vision and goals 1 3 - Define your optimal framework 4 - Evaluate your assets 5 - Define the operational model that fits your organization PwC February 2014 10
1 2 3 4 5 Identify inputs necessary to define global transparency • EFPIA Member Associations’ national codes • Japan – JPMA Transparency Guideline • Australia – Medicines Australia Code of Conduct, Ed. 17 • Federal Sunshine Act • State Transparency Laws PwC • French “Sunshine” Decree no. 2013-414 Local Country Laws Industry Codes & Guidelines EFPIA U.S. • EFPIA Disclosure Code impacting 33 European countries February 2014 11
1 2 3 4 5 Member Associations’ codes of conduct • EFPIA Member Associations required to completely integrate the Disclosure Code into their national codes by December 31, 2013 • 33 EFPIA Member Associations • As of January 2014, approximately 11 Member Associations have published updated national codes reflecting the EFPIA Disclosure Code requirements, including: - Bulgaria (ARPharM) − Latvia (SIFFA) - Estonia (APME) − Norway (LMI) - Finland (PIF) − Portugal - Greece (SFEE) − Slovenia (EIG) - Ireland (IPHA) − The United Kingdom (ABPI) - Italy (Farmindustria) PwC February 2014 12
1 2 3 4 5 Member Associations’ codes of conduct (continued) • Generally, for Member Associations that adopted the EFPIA Disclosure Code have adopted 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 of prescription 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 PwC February 2014 13
1 2 3 4 5 Member Associations’ codes of conduct (continued) • Modes of Disclosure - ABPI (UK) to decide by the end of 2014 whether to develop a central disclosure platform ◦ Current requirement is to disclose via company websites - SIFFA (Latvia) intends to create a common database for disclosure, and will permit companies to choose whether to disclose via the database or company website - The Netherlands Transparency Register is a central platform that has been required for annual disclosures since 2012 PwC February 2014 14
Your path to a global transparency program 1 - Identify inputs that will shape your global transparency program 2 - Define your transparency vision and goals 2 3 - Define your optimal framework 4 - Evaluate your assets 5 - Define the operational model that fits your organization PwC February 2014 15
1 2 3 4 5 Define your transparency vision and goals Purpose • 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 that shed light on the performance of compliance controls, investments with HCPs and the impact of different types of promotional and non-promotional activities)? Roles & Responsibilities • What is the scope of my global transparency program? • What are my key responsibilities? • How can I realistically operate a global transparency program? Talent Management • What resident subject matter experts, skilled workers, and support staff will I need to run a global transparency 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, and execution of my program? Communication & Training • What are the types and depth of the training and communications programs that will be necessary to implement my global transparency program? • What do I want to communicate to my stakeholder groups so they will understand transparency and its associated reporting requirements? PwC February 2014 16
Your path to a global transparency program 1 - Identify inputs that will shape your global transparency program 2 - Define your transparency vision and goals 3 3 - Define your optimal framework 4 - Evaluate your assets 5 - Define the operational model that fits your organization PwC February 2014 17
1 2 3 4 5 Optimal framework key considerations Governance • 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 regarding HCP/HCO spend across the countries that require some form of transparency disclosure? Policy, procedures and controls • Which existing country-specific compliance, policy, and control considerations can I expand upon or leverage? • What existing safe harbor considerations and local country privacy laws affect tracking and reporting cross-border spend? Resources and investments • 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 to effectively operate? • What other dependent, existing, or planned investments in systems and data upgrades should I consider to promote implementation success? • Will I manage transparency reporting in-house, outsource it to a third-party vendor, or achieve it through a combination of in-house/outsourcing? • What lessons learned/assets can I leverage from my US efforts? PwC February 2014 18
1 2 3 4 5 Define your optimal framework Governance Regional Local + Ownership of transparency and accountability at the country level - - Limited learning, synergies, and standardization across the organization Inconsistent data review and certification processes Inconsistent transparency definitions and documentation Global + Ability to develop synergies and standardization across a region + Oversight and ownership of program across the region + Consistent transparency policies and procedures across the region - - + Clearly defined ownership and accountability across the organization + Centralized oversight of all transparency activities across the organization + Consistent and standard transparency policies and procedures across the organization Data privacy laws may limit + Ability to share and implement local ability to standardize program leading practices and local lessons and share information across the learned across organization region Limited accountability for program at a local level - PwC Data privacy laws may limit ability to share information across borders Neglecting local sensitivities and expectations Organizational-level accountability for local affiliate violations February 2014 19
1 2 3 4 5 Define your optimal framework Local Source Systems, Data Capture & Remediation Regional + Limit data captured to only that which is required for reporting - - Lack of visibility into interactions with local HCPs by regional affiliates Inconsistent use of source systems by local affiliates + Consistency in HCP/HCO data captured across the region + Consistent use of source systems across the region - PwC + Standard terms, definitions, processes, and source systems to capture transaction data - - Requires capture of data and information that may not be required for reporting in several countries in the region Requires compliance with strictest data capture requirements in the region Global - Update to local law/regulation impacts data collection across organization Requires compliance with strictest data capture requirements February 2014 20
1 2 3 4 5 Define your optimal framework Master Data Management Regional Local + Ease of developing, implementing, and maintaining a local customer master list + Avoid duplicative entries for the same recipient in a single customer master list + Regional unique customer master identifier + Ability to identify cross-border spend within the region - - - Inability to identify cross-border spend Limited visibility into HCP/HCO spend in other countries - - PwC Global + Unique HCP/HCO profile across the organization + Uniform information available for all HCPs/HCOs + Complete list of global HCPs/HCOs + Updates to customer master list available to entire organization Data processing across the region is difficult Recipient identifying information varies among countries in a region Differing unique identifiers across countries Potential for duplicative entries Limited ability to identify crossborder spend outside of the region Potential for duplicative entries for those customers located in several countries Recipient identifying information varies among countries February 2014 21
1 2 3 4 5 Define your optimal framework Reporting Regional Local + Tailored business rules to meet local requirements + More flexibility to update reporting processes and to update reports - - Interpretation of requirements inconsistent among each local affiliate Lack of visibility into HCP/HCO spend in other countries Potential for incomplete reporting Inconsistent approach to resolving inquiries and disputes + Greater scalability and automation of manual reporting processes + Greater visibility into crossborder activities + Consistent approach to resolving inquiries and disputes within the region - - Concerns with report quality and completeness due to large volume of transactions Larger volume of inquiries and disputes Security and access to reports Global + Consistent process for consolidating transactional data based on uniform business rules to generate reports + Consistent approach to resolve inquiries and disputes of reported data + Greater automation of manual reporting processes - - PwC Concerns with report quality and completeness due to large volume of transactions Large volume of inquiries and disputes Requires certification of transactions across several regions February 2014 22
1 2 3 4 5 Leveraging lessons learned As companies adjust to the evolving global transparency landscape, they should reach out to their counterparts in other countries and leverage the lessons those counterparts have learned as they created their own transparency programs. Companies should incorporate these lessons learned when determining their overall transparency strategy. Policies and Guidelines Governance Systems and Data PwC Business Processes February 2014 23
Your path to a global transparency program 1 - Identify inputs that will shape your global transparency program 2 - Define your transparency vision and goals 4 3 - Define your optimal framework 4 - Evaluate your assets 5 - Define the operational model that fits your organization PwC February 2014 24
1 2 3 4 5 Evaluate your assets Once a company has identified its transparency program options, it should next determine which key drivers impact its ability to implement the program. To what extent do we need standardize recipient profile information for more accurate reporting How do we align the governance structure to implement the program options Master data management Governance Organization What sources do we need to evaluate, standardize or enhance to implement PwC Source systems, data capture and remediation Talent management and resourcing Reporting What talent / resources are needed to support program implementation & operations How can we develop, review, finalize and generate reports for disclosure (leverage existing or purchase systems, outsource, build) February 2014 25
1 2 3 4 5 Data privacy considerations: EU-US data transfer restrictions example The Issue: The EU Data Protection Directive prevents the transfer and access of EEArelated business and employee data to countries that are deemed “inadequate” such as the US. Trans border Date Flows PwC February 2014 26
Your path to a global transparency program 1 - Identify inputs that will shape your global transparency program 2 - Define your transparency vision and goals 5 3 - Define your optimal framework 4 - Evaluate your assets 5 - Define the operational model that fits your organization PwC February 2014 28
1 2 3 4 5 Define the operational model that fits your organization Individual companies should define a global strategy and operational model to support their 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 operate and 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 and preserve data quality PwC February 2014 29
Conclusion PwC February 2014 30
Questions? PwC February 2014 31
Contacts David J. Wysocky, Principal Pharma & Life Sciences – Global Transparency +1 (973) 641-2040 firstname.lastname@example.org Bharathram Lakshmivarahan, Director Pharma & Life Sciences – Global Transparency +1 (917) 747-0767 email@example.com Alexis Wong, Manager Pharma & Life Sciences – Global Transparency +1 (267) 275-1319 firstname.lastname@example.org Sarah Volden, Manager Pharma & Life Sciences – Global Transparency +1 (323) 528-8158 email@example.com PwC February 2014 32
This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PricewaterhouseCoopers has exercised reasonable care in the collecting, processing, and reporting of this information but has not independently verified, validated, or audited the data to verify the accuracy or completeness of the information. PricewaterhouseCoopers gives no express or implied warranties, including but not limited to any warranties of merchantability or fitness for a particular purpose or use and shall not be liable to any entity or person using this document, or have any liability with respect to this document. © 2014 PwC. All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
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