Life Science Compliance Update

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26 posts from March 2013

March 29, 2013

FDA Reorganizing Office of Prescription Drug Promotion

Moving 2
Janet Woodcock, Director of the Center for Drug Evaluation and Research (CDER) at the Food and Drug Administration (FDA) announced a new restructuring of FDA’s Office of Prescription Drug Promotion (OPDP).  As we noted back in the fall of 2011, FDA reorganized its previous office—the Division of Drug Marketing, Advertising, and Communications (DDMAC) into OPDP. 

OPDP works to protect the public health by ensuring that all prescription drug promotional labeling and advertising directed to health care professionals and consumers is truthful, balanced, and not misleading.  

Shortly after launching OPDP, the office created a new “Bad Ad Program,” which subsequently issued a few yearly reports about its progress in educating physicians and “deputizing” them to report fraudulent or questionable detailing or advertising.  

Recently, OPDP reviewed and analyzed the workload and review processes in its two divisions, the Division of Consumer Drug Promotion, and the Division of Professional Drug Promotion, in an effort to improve upon their overall impact and effectiveness.  The goal of this analysis was to increase efficiency, improve work distribution, and eliminate redundancy.   

Through the analysis, OPDP concluded that a structure that integrates the review of health care professional-directed and consumer-directed promotion across the two divisions would meet this goal. 

Toward this goal, OPDP will be restructuring its divisions and, pending final approval, will rename them the Division of Advertising and Promotion Review I and the Division of Advertising and Promotion Review II.  Both divisions will handle health care and consumer promotion.  As a way to distribute the work evenly, each division will oversee different therapeutic classes of drugs.  These changes will allow OPDP to review direct-to-consumer (DTC) and health professional advertising more effectively. 

Woodcock acknowledged the importance of DTC ads, and noted that it is “often the catalyst for patients initiating conversations with their physicians about their untreated or undertreated conditions.”  Woodcock noted that the “decision to restructure the divisions reflects our commitment to continue providing close oversight of DTC advertising. The new structure will improve efficiency in our program area and our ability to meet the health needs of the American public.”  

Finally, she noted that “ODPD reviewers will continue to use a comprehensive surveillance, enforcement, and education program to foster superior communication of labeling and promotional information to both health care professionals and consumers.” 

Whether this new restructuring will help in speeding up the issuance of the long-awaited Social Media guidance is yet to be seen.   

March 28, 2013

OIG Offers Compliance Tips for Healthcare Boards, Executives

Two of the most recent settlements involving pharmaceutical companies alleged to have engaged in off-label promotion, included corporate integrity agreements (CIAs) with the Office of the Inspector General (OIG) for the U.S. Department of Health and Human Services.  These recent CIAs—GlaxoSmithKline (GSK) and Par Pharmaceuticals—both included new provisions, which specify that company executives may have to forfeit annual bonuses if they or their subordinates engage in significant misconduct, and sales representatives may not be paid incentive compensation (e.g., based on volume) for drugs that were involved in the settlement or successor branded versions of that drugs. 

These recent CIAs created Employee and Executive Incentive Compensation Restriction Program and Executive Financial Recoupment Programs, which put at risk of forfeiture and recoupment an amount equivalent to up to 3 years of annual performance pay for an executive who is discovered to have been involved in any significant misconduct.  The financial recoupment program applies to Covered Executives who are either current employees or who are former employees at the time of a Recoupment Determination.

These recent CIAs highlight the crucial role that pharma and device executives play in ensuring compliance throughout their organizations, particularly compliance officers and their staff.  Emphasizing the important role healthcare boards play, OIG Chief Counsel Greg Demske recently posted a video on the OIG website explaining guidance for health care boards, including boards and executives of pharmaceutical and medical device manufacturers.

The video is particularly interesting given recent decisions by OIG to exclude executives and corporate officials, such as the executives at Purdue Pharma, executives at Synthes, and Scott Harkonen.  One could only speculate, but this video may confirm opinions by OIG, FDA, and DOJ that the emphasis for compliance will increasingly be pressed on corporate executives and board members, and such outreach to these individuals may reaffirm the government’s inclination to use the Park doctrine.

Demske recognized that boards play a vital role in health care organizations, by promoting economy, efficiency and effectiveness—common goals that OIG shares.  “The emergence of new payment models that reward quality, value and the reduction of waste present opportunities and risks.”  As a result, health care organizations going forward “will need to use new tools to collect and analyze data and improve clinical effectiveness at lower costs.”

He referenced the two CIA roundtables held last year (pharma and healthcare provider), and the feedback from stakeholders under CIAs.  Demske said the message was clear: “boards have the power to enhance compliance through involvement in oversight activities and by integrating compliance throughout the business.”

Regardless of the size of the company or the size of the compliance department or staff, Demske emphasized the critical role of boards and compliance programs.  He listed three key roles of a health care board and board members:

  1. Compliance oversight
  2. Structuring your compliance program; and
  3. Evaluating effectiveness of standards and processes

First, Demske noted that serving on a healthcare board requires a “unique skill set.” Accordingly, he maintained that board members should engage in oversight responsibilities.  He recognized several factors that make the “best boards:”

  • Is the board active? Do they raise questions and exercise some degree of skepticism in their oversight responsibilities?
  • Does the board have diverse experience in several areas of expertise, including compliance, clinical, and financial auditing expertise?
  • Does the board stay informed on risk areas and compliance issues?  How does the organization identify, audit and monitor risk areas?  Does the board learn all significant compliance issues?  Is someone responsible for keeping the board informed?
  • Is the board involved?  Do they attend compliance training and speak to staff about compliance, demonstrating their commitment to it?; and
  • Is the board adaptble to the changing health care delivery system and reimbursement risks?  Does the organization evaluate new risk areas and develop appropriate and update safeguards?

Second, Demske emphasized the key role board members must play in evaluating the design and implementing the compliance program.  Demske said that board members should ask several questions to determine how far reaching and effective the structure of such program is:

  1. Does your compliance officer have sufficient prominence and influence in the organization? Does the compliance officer report directly to the board?
  2. How does your organization encourage communication between compliance staff and the rest of the organization?   
  3. Are compliance goals periodically adjusted to account for payment reform and new quality standards?
  4. How does the board encourage managers to incorporate compliance considerations in daily decision-making?
  5. Does the board hold key employees accountable for following compliance standards and processes?

Finally, the OIG Chief Counsel discussed evaluating whether an organization’s compliance program is effective.  Demske emphasized the need for boards to “routinely review” compliance efforts across its organization to determine if its program is effective.  To assess the effectiveness of an organization’s compliance program, the board should ask:

  1. What metrics are used to evaluate the company’s compliance with laws and regulations?  How are those metrics selected?
  2. How does your organization identify gaps in quality and areas for quality improvement?
  3. Is the organization routinely conducting internal compliance audits?
  4. Is the organization’s response to specific problems sufficient?  Does it track correction action plans to make sure the proposed changes are implemented; and
  5. Has your compliance officer identified hurdles to promoting compliance, such as resource constraints or lack of management support?





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