Helping Pharmas Manage Compliance Risks For Speaker Programs

COGNIZANT 20-20Helping PharmasManage ComplianceRisks for SpeakerProgramsBy taking a rigorous and thoughtful approachthat pivots around key performance indicators,pharmaceuticals companies can proactivelyidentify and solve noncompliance challengeswith speaker programs before they impact thebottom line.Cognizant 20-20 Insights February 2017

Executive SummaryAmong the many promotional and marketing strategies used by pharmaceuticals companies,one of the most widely used and necessary components in the industry is the speakerprogram event. Pharma companies typically use peer-to-peer speaker programs to promoteand educate healthcare professionals (HCPs) about their drug therapies and the diseasestheir drugs treat. The interactions between HCPs through such events not only affectprescribing patterns but also help HCPs stay up-to-date on the latest molecules, newlyapproved drug indications, the latest clinical data and safety issues, among many otherthings.But over the past few years, speaker program events have become a bone of contention inthe industry as they tend to be misused. For example, some programs have providedopportunities for pharma companies to promote “off label” use of their drugs, which isillegal. In such instances, companies have been heavily penalized - and in some cases theresultant fines are estimated to be billions of dollars. As a result, multiple rules andregulations have been enacted by various U.S. government bodies, trade associations, andpharmaceuticals companies themselves, to ensure program compliance.This white paper examines key rules and regulations surrounding speaker programs andprovides an overview of how we believe pharma companies can proactively identify andsolve noncompliance challenges before they impact the bottom line.

Cognizant 20-20 InsightsFigure 1. Layers of Speaker Program CompliancePharma companies conduct speaker program events for which they use SMEs to presentapproved educational materials to medical and associated professionals. These speakerprograms 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 withHealth Care ProfessionalsDECONSTRUCTING SPEAKERPROGRAMS Attendees: Attendees are primarily HCPs(prescribers, nurses, technicians, etc.) ornon-HCPs (office staff, patients), and theirmedical specialty must correspond with thetopic of the speaker program. Attendees aretypically provided a meal at these events as acourtesy for their time. Topic: Presentation materials used must becompliant and reviewed by the U.S. Food andDrug Administration (FDA). Material canconsist of the benefits, safety and usage of theproduct, or the diseases it treats, or it can becompletely unrelated to the product. Thespeaker must present all the material provided;any modifications made should be approvedbefore the material is presented.A speaker program event typically consists of oneor more speakers, multiple attendees and thecompany representative who is responsible forarranging the program venue, topic and speaker. Speakers: Speakers at such events aretypically subject matter experts (SMEs)approved by the company’s internal revieworganization who have credentials and haveundergone speaker training. They can be HCPs(national, regional and/or local key opinionleaders) or non-HCPs (business or best-practice experts). Speakers are paid a fee forservice based on fair market value (FMV)determined by their credentials. Office of Ethics and Compliance Financial Compliance Team Legal Office Sales & Marketing OperationsHelping Pharmas Manage Compliance Risks for Speaker Programs 3

Cognizant 20-20 InsightsCONSEQUENCES OFNONCOMPLIANCE Report overpayments, reportable events andongoing investigations/legal proceedings.During the past nine years, 10 of the world’s majorpharmaceuticals companies have been penalized acombined 12.9 billion by the government(see Figure 2) and are now operating under acorporate integrity agreement (CIA) for violatingspeaker program rules enforced by the Office ofInspector General (OIG). CIAs typically last fiveyears and make corporate officers personallyliable for the company’s compliance withstipulations set forth by the CIA. These agreementsusually require the following: Provide an implementation report and annualreports to U.S. OIG on the status of theentity’s compliance activities. Hire a compliance officer/appoint acompliance committee. Develop written standards and policies. Implement a comprehensive employeetraining program. Retain an independent review organization toconduct annual reviews.A part of the Affordable Care Act (ACA) known asthe Physician Payments Sunshine Act coversphysician financial transparency reports. Thislegislation requires manufacturers of drugs,medical devices and biologicals that participate inU.S. federal health care programs to report certainpayments and items of value given to physiciansand teaching hospitals.The Pharmaceutical Research and Manufacturersof America (PhRMA) is a U.S. industry trade groupthat represents pharmaceuticals research andbiopharmaceuticals companies and advocates forpublic policies that encourage the discovery ofnew medicines for patients. They have codifiedrules concerning interactions with HCPs for thetrade group’s members to abide by. (TheFigure 2. Financial Consequences for Noncompliance with a Blockbuster DrugGlaxoSmithKline 3 BnPfizer 2.3 BnJohnson &Johnson 2.2 BnAbbVie 1.5 BnEli Lilly 1.4 BnMerck 950 Mn201220092013201220092011AmgenAstraZeneca 762 Mn 520 MnSanofi- BoehringerAventis Ingelheim 109 Mn 95 Mn2012201020122012Penalties levied by the Office of Inspector General on each company during recent years.Helping Pharmas Manage Compliance Risks for Speaker Programs 4

Cognizant 20-20 InsightsFigure 3. A Framework for Speaker Program Compliance Vendor Data Client Data Expenses Speaker Information Specialty Data Attendee Information RSVP Data Budget Data Contract ionHonoraria requencyEfficiencyMaterialManagementpeer-to-peer speaker programs are considered aform of interaction with HCPs.)As mentioned above, companies that have a CIAare also required to hire a compliance officerand/or appoint a compliance committee. Theseentities must set company policies to preventinappropriate engagements as well as topreempt any activity that could be perceived asmisconduct.IDENTIFYING NONCOMPLIANCEOur solution proposed in Figure 3 not only helpsto identify cases of noncompliance but will alsohelp a pharma company to more efficientlymanage speaker programs, in turn making themmore effective. It will also enable the company toidentify the gaps in its compliance systems andprocesses – and help it define the guidelinesrequired to close them. Attestation Data Topic Information Food Ordered Info Transparency of speaker payments Programs with high cateringexpenses Speakers who are paid incorrecthonoraria Attendees attending the sametopic multiple times Speakers without a contract Programs without attendees HCPs who promote off-label usageof drugs Speakers with an expiring contract Speakers attending programs onthe same topics they spoke on Percent of topics unutilized Programs where F&B ordered wasless than the number of attendees Percent of speakers unutilized Planned vs. actualOur process involves, initially, defining oridentifying the various metrics or keyperformance indicators (KPIs). These KPIs wouldbe based on the relevant laws, regulations,policies, standards, procedures or contractualobligations to which the organization mustconform. These include the CIA, the SunshineAct, the PhRMA code on interactions with HCPs,and the pharma company’s own internalregulations and guidelines, among others.Some of the compliance areas covered are thefollowing: Transparency of speaker payments: Allexpenses paid to speakers and other “transfersof value” (i.e., meals) can be tracked for eachindividual speaker in a calendar year. This canbe tied to the type of program (lunch/dinner/teleconference), the number of times eachspeaker presented, the number of attendees,whether the program took place or not (toHelping Pharmas Manage Compliance Risks for Speaker Programs 5

Cognizant 20-20 InsightsAccording to a company’s CIA, it mustsubmit annual plans that identify thebusiness needs for various publicationactivities (including speaker programs) andthe estimated numbers of such activities.monitor potential kickbacks) and brandrelated information. Excessive expenses(hotel, airfare, etc.) can be identified and newrules can be set to prevent further risks. Thiswould be in accordance with a CIA as well asthe Sunshine Act. Excessive value of company-providedmeals: This would satisfy transparency andPhRMA guidelines, which stipulate that eachmeal should be of nominal value and isprovided as a courtesy. Importantly, it shouldnot be used to influence an attendee or aspeaker. Signed contract confirmation: For everyspeaker program, a statement of work (SOW)or contract must be signed between thespeaker and the organization that details thespeaker’s fee-for-service, expenses, topic tobe covered, etc. Approved specialty monitoring: To preventthe promotion of off-label use of its drugs,companies must ensure that attendees areappropriate to the topic presented. Theapproved specialty is usually determined byFDA parameters covered in the speakerprogram.RSVPs: To ensure that the event has aminimum number of attendees apart fromthe speakers and reps, speaker programs arerequired to have a minimum number of RSVPsa few hours prior to the event. The minimumnumber may vary based on the event type. Annual plan monitoring: According to acompany’s CIA, it must submit annual plansthat identify the business needs for variouspublication activities (including speakerprograms) and the estimated numbers ofsuch activities. The plans also identify thebudgeted amounts to be spent on suchactivities. Speaker bureau size, number ofprograms and amount spent on programs aretracked. Meal consumption: Companies are allowedto provide a nominal meal as a courtesy tothe attendees and speakers for participatingin a speaker program. They will set limits onfrequency of meals consumed by attendeesto avoid the perception of the meal serving asa kickback. In addition, reporting on the mealsconsumed will be utilized for transparency ofpayments and transfer of value to HCPs(attendees and speakers). Food and beverage management: Whenspeaker programs are held in a physician’soffice, the meals provided are intended for onlythose individuals who attend the speakerprogram. HCPs at the physician’s office notHelping Pharmas Manage Compliance Risks for Speaker Programs 6