Life Science Compliance Update

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33 posts from July 2014

July 31, 2014

FDA Reliance on Draft Guidance for Significant Policy Changes under Pressure

In May, Senator Lamar Alexander (R-TN), the ranking member of the Senate HELP Committee, along with Senators Richard Burr (R-NC), Johnny Isakson (R-GA), and Orrin Hatch (R-UT), sent a letter to FDA Commissioner Margaret Hamburg "to express significant concern about [FDA's] use of draft guidances to make substantive policy changes." The letter notes that draft guidances are becoming default FDA policy, notwithstanding that they are issued for comment purposes only. Moreover, draft guidances are not revised, finalized, or withdrawn in a timely manner. 

Additionally, as previously reported, draft guidances often are the only information that the medical community, FDA-regulated entities, and FDA review staff may have on the agency's current position on important issues. Stakeholders feel constrained by the policy positions laid out in draft guidance, even (or perhaps especially) when those positions are inconsistent with consensus within the biomedical community-a fourth concern of the senators. In its September 2012 Report to the President On Propelling Innovation In Drug Discovery, Development, and Evaluation, the President's Council of Advisors on Science and Technology (PCAST) recommended, among other things, that the FDA rely on-and reflect the consensus of-the scientific community in developing and revising guidances. Despite this recommendation, however, the senators cited recent draft guidances by the FDA that did not incorporate recommendations by the international scientific community.

The letter requests FDA to respond to the following information requests and questions:

1. A list of all Level I Draft Guidances, including the date issued, and the timeline with which you plan to withdraw, revise, or finalize each guidance.

2. An update on Agency-wide activities to implement the "best practices" to make the finalization of guidance more efficient and expeditious, as discussed in the 2011 report Food and Drug Administration Report on Good Guidance Practices:  Improving Efficiency and Transparency.

3. Have you implemented the President's Council of Advisors on Science and Technology recommendation to rely more on the biomedical community in help developing and revising guidances, and if so, could you provide examples of specific guidances?

4. For the guidances still in draft form, how do you ensure your staff does not follow the guidance in the absence of any other policy or final guidance?

5. What is the average amount of time in calendar days that the FDA has taken to finalize draft guidances in the last five years?  What is the range?

Because these are all minority members on the HELP committee it will be interesting to see if the FDA ever responded to their requests.

July 30, 2014

Cegedim Sunshine Act Survey: 85% of Physicians Want to Review Data Before Companies Submit to CMS; Only 7% Have Visited Open Payments Website

Cegedim Country Priority

Cegedim Relationship Management recently published results from their Fifth Annual Survey on U.S. Trends in Aggregate Spend Disclosure and Transparency. The survey looked at three interesting aspects of the Physician Payments Sunshine Act: (1) physician’s expectations regarding the law; (2) best practices learned through year one of the aggregate spend process; (3) international disclosure trends.

Physician Understanding and Expectations of the Sunshine Act

Currently, manufacturers and healthcare professionals are right in the middle of the Dispute Resolution period of the Physician Payments Sunshine Act, which takes place in the time between when manufacturers submit their payment data to CMS and when the data becomes public on September 30, 2014.

During this 45-day period, physicians can theoretically register in Open Payments, review transactions listed under their names, and dispute any inaccuracies with the manufacturers. We recently covered CMS’ 91-slide walkthrough of the process that physician’s must go through to register with Open Payments and initiate the dispute process. We noted that the number of steps involved to review data may serve as a deterrent for already busy physicians simply interested in finding out what companies have recorded about them. CMS has repeatedly stated that they will not oversee the dispute process: manufacturers and physicians are expected to work it out on their own offline.

Cegedim’s report sheds new light onto how companies are interacting with physicians regarding their transfers of value, as well as physician understanding and expectations of what transactions will be made public by Sunshine Act. What we gleaned is that physicians are very interested in the accuracy of their payment data, but expect manufacturers to have an open and continuous discussion with them about their transfers of value.

Cegedim surveyed 507 physicians about their thoughts on Sunshine compliance. The vast majority—85 percent—said they would like to review data BEFORE manufacturers submit the data to CMS. Additionally, 80 percent of physicians would like to be informed of the value of goods and services even before accepting them.

Another interesting aspect of the study found that physicians are not relying on the Open Payments system for the dispute process. Cegedim found that only 44 percent of physicians surveyed were even aware of the CMS website. Amazingly, only 7 percent said that they visited the site at all! Any physician who tuned in to CMS’ 90 minute presentation about registering for Open Payments likely wasn’t convinced to start now. 

Sunshine Physician Survey

How will physicians react? 

Most physician respondents (88 percent) have some degree of concern over the impact of the Sunshine Act. They are concerned mostly with patient perception (85 percent) and also media backlash (51 percent) once the information is made public in the fall. About a third of respondents noted that the Sunshine Act would "somewhat affect" their personal interactions with manufacturers. About 40% responded that it wouldn't affect their relationship very much or at all. Ten percent stated it would greatly affect their interactions. 

The Sunshine Act may also affect whether physicians accept certain items of value. The following chart lists the frequency of items physicians no longer plan to accept. Entertainment, gifts, and travel and lodging are high on the list. However, the majority of physicians seemingly will not be turning away food and beverage. Furthermore, physicians still are willing to work for consulting fees and honoraria, and don't seem to be overly concerned about the research payment reporting (though this may have to do with the limited number of physician-respondents involved in research). 

   Cegedim Items physicians no longer plan to accept


Best Practices For Aggregate Spend Processes

Cegedim surveyed companies regarding important aspects of their aggregate spend systems. They looked at 51 companies, mostly pharmaceutical manufactures, but also a number of biotech and medical device companies as well. The survey represents the industry at large, as responding companies ranged from below $500 million in revenues to over $40 billion. All individuals who participated in the survey are either very involved (88%) or somewhat involved (12%) in ensuring their company complies with aggregate spend, disclosure laws, and regulations.

  • Aggregate Spend Systems

The survey revealed an increasing trend towards companies who have moved towards automated solutions for reporting. Only 24 percent of respondents say they are still using a manual spreadsheet solution to satisfy reporting requirements, and all of those respondents are from smaller companies with annual revenue of less than $5 billion.

About half of respondents are using the same system for aggregate spend/transparency reporting and sample reporting. This number is up from 2013 when "only 34 percent of respondents said the same, likely due to required reporting per Section 6004 of the Affordable Care Act and per Vermont state reporting." Cegedim notes that “[t]here are some significant advantages and efficiencies that can be realized by having this information all in one place, particularly if the data is being fed into an automated system for consolidation and validation.”

Most respondents (86%) expect to comply using either an internal or third-party solution as more regulatory requirements are implemented, with the majority saying that a third-party system is ideal. “In fact, 23 percent of companies who are currently using an internal solution plan to switch to a third party in the future,” the report states. “Many companies are finding is easier and more cost effective to outsource their solution due to resource constraints.” Real-time cloud based systems “have the added benefit of being updated automatically according to the latest regulatory requirements which could be a significant time investment if done internally.”

“Somewhat surprisingly,” Cegedim reports, “14 percent of respondents expect to continue their manual methods for reporting. With the increase in complexity of requirements, this can be a big task for an internal team who has to track regulatory updates, consolidate and validate data, and prepare the required reports.” One respondent stated, “[s]preadsheets are too cumbersome and too prone to error; data volume is significant even for a small sales force.”

Sixty-five percent of respondents are using their aggregated spend data to gain business insights regarding physician spend. “These business insights provide much more than the compliance metrics that are required for reporting,” the report states. “A more analytical view of the data supports applications for marketing and financial reporting and helps companies make more informed business decisions to increase the efficiency and effectiveness of their HCP programs across the company.” These insights allow companies to examine, for example, year-to-year spending, spending by individual physician, and average spend per activity. “Some leading aggregate spend solutions have advanced analytical reporting integrated into the solution dashboard, enabling users to take full advantage of their data.”

The Cegedim report also gets into detail about data integration in their aggregate spend and disclosure compliance solutions—specifically with regards to third parties including clinical research organizations (CROs). 

  Spend Data Sources

  • Best Practices for Dispute Resolution

As we noted above, physicians are placing an increased emphasis on reviewing their data before companies submit to CMS. Companies appear to be listening. This year, more companies (61% vs. 52% in 2013) report they are planning a “pre-submission review” by covered recipients.

Currently, the Dispute Resolution process places discretion in the hands of the manufacturer. While physicians may dispute a certain transaction, a manufacturer may unilaterally dismiss the dispute. However, this could lead to having some dissatisfied clients. “With this information becoming publicly available, manufacturers need to be sensitive to their relationships with their customers,” Cegedim states. “Giving the HCP an opportunity to review these expenses in a private, secure portal prior to submitting information to CMS will keep the channels of communication open and lead to more content physicians.”

The following graphs show the respondents’ approaches to pre-submission review:

Cegedim Pre-Submission

  • Other Aspects of Sunshine Reporting: Assumptions Documents, Delayed Payments, and Travel Abroad Expenses

While the majority of companies plan to create an Assumptions Document in relation to Sunshine, only about half of them plan to submit their assumptions document to CMS with their reports. “An Assumptions Document is an important step in Sunshine compliance because it defines the business processes and definitions they have in place to meet reporting requirements,” per the report. “While CMS has stated that manufacturers could submit an Assumptions Document with their report, companies

 are split on the impact of doing so. There is some debate in the industry about whether the information could be used in non-compliance disclosure reporting-related investigation, although, in an audit situation, the document will likely be discovered anyway.”

According the report, companies are also split on whether or not they will label payments as delayed for Sunshine reporting. “Flagging payments as delayed is an option for manufacturers to shield the visibility of payments on products that are still in development.” Such payments will not be disclosed to the public until the relevant product is approved or after 4 years. “While flagging payments could protect some pipeline information, companies seem to be split on whether the extra work is worth the effort.” Survey responses with regards to whether companies will label payments “delayed” to were fairly divergent: yes (33%) no (26%) and “not sure” (41%).  

Similar to 2013, the majority of respondents (67%) capture physician payments for U.S. reporting when the physician travels abroad on behalf of foreign affiliates. “Sunshine will require reporting of all expenses paid to U.S. physicians including travel, transportation and lodging, so the few amount of “Nos” means companies are getting more prepared for Sunshine, but those companies will need to update their processes in order to be compliant with Sunshine requirements.”

 Global Transparency

"Transparency regulations are increasing around the globe," Cegedim states. "Countries in regions such as Europe and Asia-Pacific are watching the U.S. legislation unfold and starting to implement laws that are similar in nature but customized to their healthcare system and practices." Indeed, just yesterday we posted about Australia's new disclosure plan, which in many ways mirrors the US law, but adds certain changes.

Cegedim asked respondents if global issues affect how U.S.-based groups make decisions about their disclosure and transparency compliance.Few respondents say that there is no need for a global solution, though only about one-third consider it a necessity to implement such a system. 

The majority of companies, 57 percent, say that their solution is centralized regionally (in which data integration, business rules, and reporting is defined and controlled by regional governance). This is up from 37 percent in 2013 and probably due to the fact that there are differences in reporting requirements around the world. The authors posit that "[i]t’s possible that, at least for now, companies are finding that the regional experts are more effective in defining the rules that are necessary for their reporting, especially as new requirements are still being developed."

The report also offers insight into which particular countries manufacturers have been focused on: 

Cegedim Country Priority


We appreciate Cegedim's insight into the first year of reporting. Based on the surveys, it appears that keeping physician clients happy now involves more work on the front-end: informing physicians about what individual payments are reportable, maintaining an ongoing dispute process, and perhaps even keeping a real-time portal in place to update payments as they occur. In the end though, such a system could both streamline the manufacturer’s Sunshine reporting obligations and the dispute resolution, as well as give companies the incentive to take a constructive look at where their spend is going.

Planning robust systems on the front-end may also provide much needed flexibility for divergent international laws as more and more countries develop their own particular requirements in the future. 

July 29, 2014

CBI's Transparency & Aggregate Spend Forum: August 18-20 in Washington, DC

CBI Agg Spend Conference

The longest running and most highly acclaimed transparency meeting takes place August 18-20 in Washington, DC this year. CBI's Transparency & Aggregate Spend Forum provides an amazing opportunity to hear from industry experts and interact with other compliance and agg spend personnel about lessons learned from 2013 reporting, and what to anticipate going forward. The conference features live audience polling for benchmarking comparisons, in-depth workshops, concurrent tracks, interactive presentations, panels, case studies and peer-to-peer working groups.

The Conference will cover the following important topics:

  • Learn about the impact of Open Payments reporting on the relationships between industry and physicians
  • Increase the accuracy and speed of recording a transfer-of-value at the point of transfer
  • Consider the best ways to prepare for public disclosure
  • Discover pre-reporting and dispute resolution strategies
  • Hear a summary of how industry has responded to initial reporting 
  • Create an internal process for sharing ownership and accountability for reporting compliance
  • Implement processes and integrate systems to ensure data accuracy and verification 
  • Work with third-party vendors to improve data and reporting processes
  • Validate and verify your aggregate spend programs and transparency process

The Transparency and Aggregate Spend Forum provides three tracks on Monday that all touch on very timely issues: tracking clinical research spend, international data privacy considerations, and requirements for global reporting. Thomas Sullivan, editor of Policy and Medicine will be leading the workshop entitled "How to Identify, Track, and Report Clinical Spending" as well as an interactive working group presentation on "Open Payments Reporting on Education and Indirect Payments" on Wednesday.  


We highly recommend that you register for this conference--it is one of the most comprehensive forums for the Sunshine Act to happen all year.  

Click here to register and to download a brochure for a detailed list of speakers and talks. 



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