helping pharmas manage compliance risks for speaker programs

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Helping Pharmas Manage Compliance Risks for Speaker Programs By taking a rigorous and thoughtful approach that pivots around key performance indicators, pharmaceuticals companies can proactively identify and solve noncompliance challenges with speaker programs before they impact the bottom line. COGNIZANT 20-20 Cognizant 20-20 Insights | February 2017

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Helping Pharmas Manage Compliance Risks for Speaker Programs

By taking a rigorous and thoughtful approach that pivots around key performance indicators, pharmaceuticals companies can proactively identify and solve noncompliance challenges with speaker programs before they impact the bottom line.

COGNIZANT 20-20

Cognizant 20-20 Insights | February 2017

Executive Summary

Among the many promotional and marketing strategies used by pharmaceuticals companies,

one of the most widely used and necessary components in the industry is the speaker

program event. Pharma companies typically use peer-to-peer speaker programs to promote

and educate healthcare professionals (HCPs) about their drug therapies and the diseases

their drugs treat. The interactions between HCPs through such events not only affect

prescribing patterns but also help HCPs stay up-to-date on the latest molecules, newly

approved drug indications, the latest clinical data and safety issues, among many other

things.

But over the past few years, speaker program events have become a bone of contention in

the industry as they tend to be misused. For example, some programs have provided

opportunities for pharma companies to promote “off label” use of their drugs, which is

illegal. In such instances, companies have been heavily penalized - and in some cases the

resultant fines are estimated to be billions of dollars. As a result, multiple rules and

regulations have been enacted by various U.S. government bodies, trade associations, and

pharmaceuticals companies themselves, to ensure program compliance.

This white paper examines key rules and regulations surrounding speaker programs and

provides an overview of how we believe pharma companies can proactively identify and

solve noncompliance challenges before they impact the bottom line.

Cognizant 20-20 Insights

DECONSTRUCTING SPEAKER PROGRAMS

A speaker program event typically consists of one

or more speakers, multiple attendees and the

company representative who is responsible for

arranging the program venue, topic and speaker.

• Speakers: Speakers at such events are

typically subject matter experts (SMEs)

approved by the company’s internal review

organization who have credentials and have

undergone speaker training. They can be HCPs

(national, regional and/or local key opinion

leaders) or non-HCPs (business or best-prac-

tice experts). Speakers are paid a fee for

service based on fair market value (FMV)

determined by their credentials.

• Attendees: Attendees are primarily HCPs

(prescribers, nurses, technicians, etc.) or

non-HCPs (office staff, patients), and their

medical specialty must correspond with the

topic of the speaker program. Attendees are

typically provided a meal at these events as a

courtesy for their time.

• Topic: Presentation materials used must be

compliant and reviewed by the U.S. Food and

Drug Administration (FDA). Material can

consist of the benefits, safety and usage of the

product, or the diseases it treats, or it can be

completely unrelated to the product. The

speaker must present all the material provided;

any modifications made should be approved

before the material is presented.

3Helping Pharmas Manage Compliance Risks for Speaker Programs |

Figure 1. Layers of Speaker Program Compliance

Pharma companies conduct speaker program events for which they use SMEs to present approved educational materials to medical and associated professionals. These speaker programs must adhere to specific rules and regulations which are set by the government, trade organizations, and internally - as shown, respectively, below.

• Office of Inspector General• Corporate Integrity Agreement• Physician Payments Sunshine Act

• Code on Interactions with Health Care Professionals

• Office of Ethics and Compliance• Financial Compliance Team• Legal Office• Sales & Marketing Operations

Cognizant 20-20 Insights

CONSEQUENCES OF NONCOMPLIANCE

During the past nine years, 10 of the world’s major

pharmaceuticals companies have been penalized a

combined $12.9 billion by the government

(see Figure 2) and are now operating under a

corporate integrity agreement (CIA) for violating

speaker program rules enforced by the Office of

Inspector General (OIG). CIAs typically last five

years and make corporate officers personally

liable for the company’s compliance with

stipulations set forth by the CIA. These agreements

usually require the following:

• Hire a compliance officer/appoint a

compliance committee.

• Develop written standards and policies.

• Implement a comprehensive employee

training program.

• Retain an independent review organization to

conduct annual reviews.

• Report overpayments, reportable events and

ongoing investigations/legal proceedings.

• Provide an implementation report and annual

reports to U.S. OIG on the status of the

entity’s compliance activities.

A part of the Affordable Care Act (ACA) known as

the Physician Payments Sunshine Act covers

physician financial transparency reports. This

legislation requires manufacturers of drugs,

medical devices and biologicals that participate in

U.S. federal health care programs to report certain

payments and items of value given to physicians

and teaching hospitals.

The Pharmaceutical Research and Manufacturers

of America (PhRMA) is a U.S. industry trade group

that represents pharmaceuticals research and

biopharmaceuticals companies and advocates for

public policies that encourage the discovery of

new medicines for patients. They have codified

rules concerning interactions with HCPs for the

trade group’s members to abide by. (The

Figure 2. Financial Consequences for Noncompliance with a Blockbuster Drug

GlaxoSmithKline$3 Bn

Pfizer$2.3 Bn

Johnson &Johnson$2.2 Bn

AbbVie$1.5 Bn

Eli Lilly$1.4 Bn

AstraZeneca$520 Mn Sanofi-

Aventis$109 Mn

2012 2009 2013 2012 2009

Amgen$762 Mn

2012 2010

BoehringerIngelheim$95 Mn

2012 2012

Merck$950 Mn

2011

Penalties levied by the Office of Inspector General on each company during recent years.

4Helping Pharmas Manage Compliance Risks for Speaker Programs |

Cognizant 20-20 Insights

peer-to-peer speaker programs are considered a

form of interaction with HCPs.)

As mentioned above, companies that have a CIA

are also required to hire a compliance officer

and/or appoint a compliance committee. These

entities must set company policies to prevent

inappropriate engagements as well as to

preempt any activity that could be perceived as

misconduct.

IDENTIFYING NONCOMPLIANCE

Our solution proposed in Figure 3 not only helps

to identify cases of noncompliance but will also

help a pharma company to more efficiently

manage speaker programs, in turn making them

more effective. It will also enable the company to

identify the gaps in its compliance systems and

processes – and help it define the guidelines

required to close them.

Our process involves, initially, defining or

identifying the various metrics or key

performance indicators (KPIs). These KPIs would

be based on the relevant laws, regulations,

policies, standards, procedures or contractual

obligations to which the organization must

conform. These include the CIA, the Sunshine

Act, the PhRMA code on interactions with HCPs,

and the pharma company’s own internal

regulations and guidelines, among others.

Some of the compliance areas covered are the

following:

• Transparency of speaker payments: All

expenses paid to speakers and other “transfers

of value” (i.e., meals) can be tracked for each

individual speaker in a calendar year. This can

be tied to the type of program (lunch/dinner/

teleconference), the number of times each

speaker presented, the number of attendees,

whether the program took place or not (to

Figure 3. A Framework for Speaker Program Compliance

Compliance

Guideline

Efficiency

MaterialManagement

MealConsumption

AttendeeFrequency

SpeakerAttendance

F&BManagement

ProgramCosts

SpeakerBureauManagement

AttendeeSummary

RSVPRequirement

AggregateSpendAnalysis

AnnualPlanMonitoring

SpeakerContractConfirmation

Honoraria forCancelledPrograms

ApprovedSpecialtyMonitoring

AllowableMealLimit

AttestationQuestions

� Transparency of speaker payments� Programs with high catering

expenses � Speakers who are paid incorrect

honoraria � Attendees attending the same

topic multiple times� Speakers without a contract� Programs without attendees� HCPs who promote off-label usage

of drugs� Speakers with an expiring contract� Speakers attending programs on

the same topics they spoke on� Percent of topics unutilized� Programs where F&B ordered was

less than the number of attendees� Percent of speakers unutilized� Planned vs. actual

• Vendor Data• Client Data• Expenses

• Speaker Information• Specialty Data• Attendee Information

• RSVP Data• Budget Data• Contract Information

• Attestation Data• Topic Information• Food Ordered Info

5Helping Pharmas Manage Compliance Risks for Speaker Programs |

Cognizant 20-20 Insights

monitor potential kickbacks) and brand-

related information. Excessive expenses

(hotel, airfare, etc.) can be identified and new

rules can be set to prevent further risks. This

would be in accordance with a CIA as well as

the Sunshine Act.

• Excessive value of company-provided

meals: This would satisfy transparency and

PhRMA guidelines, which stipulate that each

meal should be of nominal value and is

provided as a courtesy. Importantly, it should

not be used to influence an attendee or a

speaker.

• Signed contract confirmation: For every

speaker program, a statement of work (SOW)

or contract must be signed between the

speaker and the organization that details the

speaker’s fee-for-service, expenses, topic to

be covered, etc.

• Approved specialty monitoring: To prevent

the promotion of off-label use of its drugs,

companies must ensure that attendees are

appropriate to the topic presented. The

approved specialty is usually determined by

FDA parameters covered in the speaker

program.

• RSVPs: To ensure that the event has a

minimum number of attendees apart from

the speakers and reps, speaker programs are

required to have a minimum number of RSVPs

a few hours prior to the event. The minimum

number may vary based on the event type.

• Annual plan monitoring: According to a

company’s CIA, it must submit annual plans

that identify the business needs for various

publication activities (including speaker

programs) and the estimated numbers of

such activities. The plans also identify the

budgeted amounts to be spent on such

activities. Speaker bureau size, number of

programs and amount spent on programs are

tracked.

• Meal consumption: Companies are allowed

to provide a nominal meal as a courtesy to

the attendees and speakers for participating

in a speaker program. They will set limits on

frequency of meals consumed by attendees

to avoid the perception of the meal serving as

a kickback. In addition, reporting on the meals

consumed will be utilized for transparency of

payments and transfer of value to HCPs

(attendees and speakers).

• Food and beverage management: When

speaker programs are held in a physician’s

office, the meals provided are intended for only

those individuals who attend the speaker

program. HCPs at the physician’s office not

According to a company’s CIA, it must submit annual plans that identify the business needs for various publication activities (including speaker programs) and the estimated numbers of such activities.

6Helping Pharmas Manage Compliance Risks for Speaker Programs |

Cognizant 20-20 Insights

attending the speaker program are not

permitted to receive food intended for

attendees (i.e., distribution of leftovers is not

permitted). So, the amount of food ordered

should not exceed the requirements for the

number of actual attendees or other parameters

set forth by the company, such as RSVPs.

• Speaker bureau management: Companies

can track the frequency of speaker utilization

(national/regional/local key opinion leader

(KOL) and non-KOL), average attendance size

per speaker, attendee mix per speaker (doctor,

physician’s assistant, etc.), speakers with

expiring contracts, etc.

• Presentation decks management: Companies

can track the frequency of utilization, average

number of attendees per topic, average

attendee mix (doctor, physician’s assistant,

etc.), expiring topics, etc.

• Attendee summary: Companies can track the

number of attendees by program type (in-

office, out-of-office or teleconference),

attendee category, etc.

• Speaker program costs summary: Speaker

program-related expenses can be tracked for

better budget management. Expenses can be

categorized into expense types, such as

speaker expenses (honoraria, travel, meals,

etc.), pass-through costs (A/V costs, room

rentals, management fees, etc.) and catering.

These expenses can also be viewed by program

type.

7Helping Pharmas Manage Compliance Risks for Speaker Programs |

Cognizant 20-20 Insights

8Helping Pharmas Manage Compliance Risks for Speaker Programs |

Bill Restrepo

Senior Associate

Bill Restrepo is a Senior Associate within Cognizant’s

Analytics & Information Management Practice. He has over

15 years of experience in data analysis/analytics (the past four

with Cognizant). Prior to Cognizant, Bill worked for companies

in the life sciences, medical devices and scientific equipment

industries. While at Cognizant, he has worked on projects for

multiple pharmaceuticals clients. Bill has a bachelor’s degree

from the University of Illinois Urbana-Champaign. He can be

reached at [email protected].

The author would like to thank Navin Vipin for his contributions

to this white paper.

ABOUT THE AUTHOR

ACKNOWLEDGMENTS

ABOUT COGNIZANT

Cognizant (NASDAQ-100: CTSH) is one of the world’s leading professional services companies, transforming clients’ business, operating and technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build and run more innovative and efficient businesses. Headquartered in the U.S., Cognizant is ranked 230 on the Fortune 500 and is consistently listed among the most admired companies in the world. Learn how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.

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