As the Pharmaceutical landscape evolves to meet the new PhRMA Code restrictions that went to effect January 1, 2022, we surveyed our accounts to assess the impact these changes have made and to understand the evolution of compliance policies and practices within this cohort. Though our survey is limited to the meetings & events industry, it provides fascinating insights into the broader topic of life science compliance. Below, are seven takeaways from the report which will be available in April 2022.
7 Things to Know about Compliance in the Life Sciences in 2022
1. Changes to the PhRMA Code
The changes to the PhRMA Code have been a long time in the making. There have been several high-profile lawsuits filed by federal authorities which have resulted in corporate integrity agreements and massive fines thus laying the groundwork for these systemic changes. The OIG (Office of Inspector General) Special Fraud Alert in 2020 solidified this further. Fast forward nearly a year and PhRMA officially announced a new Code on Interactions with HCPs which very closely mirrors the OIG Special Fraud Alert guidance.
2. Attendance at speaker programs
There are still gray areas in the revised 2022 PhRMA Code about attendance at speaker programs. While PhRMA’s new language closely mirrors that of the OIG Special Fraud Alert, it did not give guidance on areas of nuance. For example, the Code states, “Repeat attendance at a speaker program on the same or substantially the same topic is generally not appropriate unless the attendee has a bona fide educational need to receive the information presented. Attendance by speakers as participants at programs after speaking on the same or substantially the same topic is generally not appropriate.”
It is widely agreed that this was instituted to address the potential for fraud or inducement if an HCP attends a program on the same title multiple times and receives multiple complimentary meals in the course of doing so. However, in today’s virtual world, an HCP could realistically attend a talk-title once virtually, then once live. Whilst the Code clarifies that attendance by speakers who have already presented on the topic is not appropriate and repeat attendance at a speaker program on the same or substantially the same topic where a meal is provided leaves open the opportunity to attend again but not accept the hospitality.
Similarly, there is no clear definition on what constitutes a “bona fide need to receive the information presented” a subsequent time? Is it the passing of a certain amount of time? If so, what is a reasonable amount of time that needs to pass to make the need to refresh the content “bona fide”? The reality is that most of our accounts which were surveyed are still working through these concepts and are taking them on a case-by-case basis.
Another example of ambiguity in the Code relates to alcohol. It now states “Companies should not pay for or provide alcohol in connection with the speaker program.” It doesn’t speak to whether consumption is permissible during the program. Our surveyed accounts universally no longer permit alcohol to be served at speaker programs or be paid for by their field force. However, they have also determined not to be the alcohol police; instead, they will allow attendees to do what is acceptable for themselves. Specifically, attendees can purchase alcohol outside the room and bring it into the program if they feel the need to do so.
3. Meals and incidentals
Providing meals and incidentals of modest value is not new, but the Code has gone on to exclude “high-end” establishments in its latest iteration in relation to speaker programs. Modest by dictionary definition is defined as “not very large in size or amount” but this is all relative to the person considering the value. Our surveyed respondents did not reduce their meal caps in light of these Code modifications, but several had adjusted or will adjust their list of permissible venues as a result. Our full report will outline some of the strategies and parameters used in refining permissible venues.
4. Compliance maturity
Life science organizations have varying levels of compliance maturity. This can be for various reasons, including the age of the organization, the products/focus areas, risk tolerance and investment into compliance. Our survey asked what level of compliance strategy or vision was shared by the life science organization with our third-party teams. Only 25% of our account leaders were given a clear and articulated compliance vision. Two more were actively partnering with the life science organizations to learn more about their unique strategies. The balance of the respondents was uncertain of the life science organization’s strategy/vision.
This is not to suggest that there is a gap in understanding the importance of compliance with any particular response, but simply to share that the more mature and robust a compliance program is within an organization, the more likely they are to share and overshare their compliance vision and strategy with their internal stakeholders and third parties. Achieving a culture of compliance, the gold standard by which most seek to attain, isn’t a destination, it’s an ongoing journey and it takes every contributor to join along the way.
5. The legal landscape
The legal landscape is constantly evolving but many life science organizations take for granted their third-party supplier’s own knowledge. An effective compliance program requires initial Training and Annual Training updates to ensure the education and understanding of your organizational requirements regarding compliance.
Accuracy, Adherence and Financial Limits were 3 areas featured in the recent survey regarding compliance related priorities and education of the importance of accuracy, definition of financial limits and an explanation of resource to ensure adherence to compliance policy will enable your internal and external partners to support that policy with the same understanding and effectiveness. Roughly 38% of our surveyed accounts have mandatory third-party compliance training courses created by or delivered by the client. Likewise, with the exception of emailing out new policies which align with the 2022 PhRMA Code changes, only 38% of our surveyed accounts provided actual training on the changes.
6. Transfer of value reporting
Transfer of value reporting really did get more complicated this last year. We all knew changes were on the horizon. In fact, Congress gave us nearly three years to prepare. However, when changes were made to the definition of “covered recipients” in the “Fighting the Opioid Epidemic with Sunshine Act” few probably realized how complicated it would be to precisely identify those new covered recipients because not all of them have NPI (National Provider Identification) numbers.
As reporting requirements have evolved over the past few years to include an increasing number of additional medical professionals, the most significant increases included both Physician’s assistants (PA or PA-C) as well as various levels of midwifery and nursing. The work to identify this expanded group of professionals was often difficult due to illegible writing coupled with common names. This can make the reconciliation process for transfer of value reporting challenging and time consuming. There were also two notable trends from this evolution. First, despite the fact that the current reporting requirement does not extend to the Registered Nursing (RN) providers we are seeing a trend across our client base to capture the National Provider Identifier (NPI) or state license number for all levels of nursing in anticipation of further increase in reporting requirements.
Second, we noticed a considerable absence in the use of digital e-sign technology. Only 38% of the accounts we surveyed utilize e-sign or digital sign in technologies. This may be due to a combination of factors, such as the cost of the software and associated products to deliver the software or integration limitations. However, given the increased number of reportable covered recipients in 2022, the opportunity for OIG scrutiny, and fines levied for erroneous or omitted open payments data, it is surprising the number hasn’t trended higher.
7. The importance of audit
The importance of audit is not lost on those who were surveyed. Our final takeaway in this early release is related to audits. A full 78% of those surveyed have an independent, non-operational person within our organization conduct either a document check or full audit of the program files as a course of business, not just prior to an external audit. The scope, sample size and audit plans associated with these responses differed in many respects, ranging from 100% audit samples to <10% and from document checks to fully integrated procedural and financial audits. Invariably risk plays a key part in any audit and the audit plan should be designed to prioritize meetings and events with high- risk attributes, such as those that are external, include healthcare professionals, and are promotional in nature.
These seven takeaways related to life science compliance in 2022 are just a highlight of what we have learned. Additional insights from our survey will be published in April of 2022. In the meantime if you have questions about life science compliance and how it can impact and improve your meetings and events, we are here to help. Our team of experts around the world can help you navigate this new landscape. We delight in being consultative and tailored to your business needs, adapting when your compliance requirements shift, now and in the future. There is no “one size fits all” approach, and we are here to be a truly consultative and collaborative partner for our clients.