Life Science Compliance Update

February 17, 2017

Anti-corruption: All roads lead to enforcement


When it comes to corruption, Life Sciences companies are a frequent target of investigation and enforcement. The French enactment of Sapin II is the latest in a long line of laws to combat corruption. This article explores Sapin II and why the authors feel that Life Sciences companies are among the best positioned to comply with Sapin II’s requirements.

Corruption occurs across all industries – from banking and finance to energy and mining – however, Life Sciences companies are frequently under the microscope due to a variety of circumstances unique to the industry. Among these circumstances are the fact that:

  1. Customers and influencers of prescription drug use are often public officials (i.e. HCPs can be government employees or work at public institutions),

  2. Company-sponsored event objectives can be unclear (i.e. whether a sponsored event or engagement is related to scientific exchange or is promotional/ commercial in nature),

  3. There is a heavy reliance on third parties and sub- contractors who are responsible for engaging with government officials and employees, and relatedly, and

  4.  Complex supply chains and distribution channels typically span all corners of the globe.

    Read the full article in the February 2017 issue of Life Science Compliance Update

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July 12, 2016

EFPIA Transparency Begins

Europe has recently pulled the trigger on their version of our Sunshine Act. While it is true that, with the exception of Denmark, France, and Portugal, the requirement to disclose does not have the force of law, information on money paid to individuals will be available for public scrutiny for the first time in Europe.

However, with the exception of those three aforementioned countries, pharmaceutical companies that are responsible for collecting the information must get consent from each individual healthcare professional or organization before they can publish it.

This move comes after a strong push by the European Federation of Pharmaceutical Industries and Associations (EFPIA). EFPIA, which has many major pharmaceutical companies among its members, has issued a minimum standard for what is required for disclosure for its members.

However, such a requirement that most countries involved require consent of professionals and organizations will likely result in differences in the level of compliance from country to country, and maybe even organization to organization. According to Andrew Powrie-Smith, responsible for implementation at EFPIA, "[t]here are differences in culture, differences in privacy law – Germany for instance has very strong laws – there are different socio-economic conditions in different countries, so inevitably there will be variation."

It isn't just the variation in the level of consent from healthcare professionals and healthcare organizations, there will also be differences in the way information is published. For example, for some countries (i.e., the Netherlands and the United Kingdom), there is a central database, whereas in other countries the data will be accessible via the websites of individual pharmaceutical companies.

How Are the Countries Coping?

In the United Kingdom, the Association of British Pharmaceutical Industry (ABPI) turned on its centralized database on July 30, 2016, disclosing aggregate spending of £340.3million ($450 million) by over one hundred companies. Most of the payments (67%) involved payments for Research & Development. The other third of payments was for a range of commercial activities, with roughly half of that third going toward a range of service and consultancy fees. Event-related payments (i.e., travel and accommodation) and donations and grants to healthcare organizations.

In the UK, however, roughly one third of physicians featured in the new, public database refuse to be named and some companies have faced difficulties in getting healthcare providers to disclose their own details, outlining some of the difficulties that are likely to continue and plague the EFPIA transparency effort.

Kyriakos Mikellis, President of the Cyprus Association of Research and Development Pharmaceutical Companies (KEFEA), notes that his aim is "to boost the legitimate relationship and cooperation between pharmaceutical companies, healthcare professionals and healthcare organizations, boosting credibility through transparency and making it more comprehensible to patients and all relevant stakeholders."

In Switzerland, the organization responsible for the implementation of the EFPIA requirements is, the Swiss business association of chemistry, pharmaceuticals and biotechnology. The association coordinated with various pharmaceutical associations and drafted the Pharma Cooperation Code (PCC). The PCC was drafted in an attempt to regulate interactions between pharmaceutical companies, doctors, pharmacists, and other stakeholders, in Switzerland.

EFPIA Intent

According to Powrie-Smith, the goal is not to shame physicians, but instead to "make sure we do whatever we can to make the relationship as transparent as possible, to get consent and get the information in the public domain in a way the public can access it." He acknowledges the importance of cooperation between industry and health care professionals, but is hoping that this transparency effort will provide an understanding of why such coordination is crucial.

July 06, 2016

Colombia v. Novartis

Several weeks ago, Columbian Health Minister Alejandro Gaviria announced that he was going to find a way to force Novartis to lower the price of its Gleevec leukemia treatment. He started out by threatening to sidestep the drug patent and declare a compulsory license, but the decided to declare a lower price for the medicine under the guise that doing so would be in the public interest because it would save the country money.

Colombia's decision stops short of a compulsory license that would have stripped the drug's patent to allow for generic production. The country had feared that move would lead the U.S. to pull financial support in other areas, such as Colombia's peace talks.

Such a move by Columbia, where the focus is on imposing more price controls is unnecessary and a major threat to an innovative manufacturing environment. Such an environment is crucial to any country seeking economic growth, an improved standard of living, and better jobs.

It is likely that some politicos (and non-politicos) will hail these actions as a great move to protect "public health." Those will be the same folks who want and expect it all to be free, and will have never spent any time or money to create the new cures that the world is currently, and always will be, seeking. They will ignore the fact that the innovative life sciences sector not only provides millions of jobs, but it is also the necessary pipeline for the generic industry they tend to favor.

PhRMA spokesman Mark Grayson opposed to idea, stating, "This medicine is being provided to all Colombian patients who need it and at a price negotiated and agreed by the Colombian Government under its existing pricing system. Several competing versions are also available in Colombia, and there is no apparent shortage or evidence of other access issues. Under these circumstances, a declaration of public interest is unwarranted and unjustified."

The National Association of Manufacturers also opposes the decision made by Gaviria, noting that, "[t]here was no need for this action given that the product is already available at a significantly reduced price and there are already non-infringing generic versions available in the Columbian market."

According to Garvia, the declaration was prompted by a breakdown in negotiations between the Columbian government and Novartis. Novartis has not yet received official confirmation regarding the declaration, but so far, it is refusing to lower the drug's cost. The Colombian Medical Federation noted that sales of generic Gleevec have declined, possibly due to a decreased availability of the drug. It isn't clear how many Columbian patients aren't receiving treatment because of the pricing dispute.

Novartis is not commenting on the situation unless and until it receives official confirmation from the Columbian authorities. In a statement, a Novartis spokesman stated

Throughout this dialogue we have remained fully committed to finding a resolution that benefits patients, innovators and the Colombian health care system. We have received no official confirmation from the Colombian authorities regarding the conclusion of these talks. Until we do, it is not appropriate to make further comment. 

We have consistently said that Declarations of Public Interest can be important and legitimate tools to be used only in exceptional circumstances. This is simply not the case in Colombia. There are no shortages of Gleevec or other access issues. Colombia's universal healthcare system means all patients who need Gleevec receive it. Novartis does not have a monopoly. There are already noninfringing generic versions on the market, which the government could purchase instead of Gleevec in order to reduce its costs.

If Columbia's actions do stand, it may be time to truly start worrying about access to medicines for this Latin American country.


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