New Reform du Medicament requires the reporting of every payment and goes further than the US PPACA
As Europe enters a new era of pharmaceutical transparency in order to reduce conflict of interest, it is French pharmaceutical companies that are on the front line as they respond to the stringent demands of new compliance regulation.
From recording every single payment, not only to healthcare providers (HCPs) but also medical students and business associates, including media companies and consultancies, to imposing control over visits to clinicians and demanding new validation for advertising, the Reform du Medicament, which became law in December 2011, has shocked many pharmaceutical companies in both its broad extent and challenging timescales.
So what are the implications of new compliance legislation in France and the likely consequences for increasing transparency across Europe?
Sunshine Act à la Francaise
The scandal surrounding Servier and its Mediator drug, which was prescribed as an appetite suppressant for overweight diabetics, rocked France. Finally banned in 2009, despite concerns being raised as long ago as 1998, the drug may have been linked to up to 2,000 deaths. The ramifications for the pharmaceutical industry in France, indeed across Europe, are significant and set to fundamentally change the way pharmaceutical companies interact with HCPs.
The public and political furore surrounding Mediator has led to an extraordinary fast-tracking of the new compliance legislation. The Reform du Medicament was described by Health Minister Xavier Bertrand as “Sunshine Act à la Francaise”. In reality, the new legislation far outstrips the requirements of the US Patient Protection and Affordable Care Act (PPACA), known as the Sunshine Act, which, in essence, demands that companies record any payments over $10 to physicians and teaching hospitals.
The new French regulations are far more stringent and address not only information transparency but also visits to hospitals and validation of advertising. Organisations must now record any payment from the first Euro spent, from a cup of coffee to a pen, not only to HCPs but also medical students and any company, such as an IT supplier, consultancy or media company, involved in facilitating service delivery to the pharmaceutical company.
Currently, although the market is awaiting the final draft of the decree, the regulation also applies to research and development information, which raises the issues of competitive position. Certainly in the US, companies have to record R&D-related spend, but do not have to publish for up to four years. Whether or not a similar position will be adopted by the French government to enable organisations to retain essential business confidentiality and intellectual property is yet to become clear.
At the moment, all payment information must be recorded and published on the company's website within 15 days of the payment. It must also be delivered in report form to the six professional organisations in France – for physicians, nurses, midwives, kinesitherapists, pharmacists and dentists.
One of the most striking effects of the Reform du Medicament is the timing: while companies in the US had two years to prepare for the introduction of the Sunshine Act, in France there is no time for organisations to ensure they are compliant with the new requirements. Companies have been required to record all payments and transactions since January 1, 2012.
The difficulties associated with achieving compliance to this new regulation cannot be underestimated and many pharmaceutical companies are struggling to assess how to move forward. Even multinational organisations with experience of complying with the Sunshine Act are assessing how to pull together payments information from diverse systems and achieve consolidation into a single repository.
The key requirement is a gap analysis to determine how different systems are capturing payments; how these systems exchange data and how that data is currently analysed. Armed with this insight, organisations can ascertain what needs to be done to achieve compliance, including data transformation to clean, harmonise and standardise the data to enable integration into a single repository and ensure every reportable entity can be uniquely identified. With this single repository holding all spend data, the organisation will be able to automate the generation of reports for both the website and relevant medical associations.
Field force imperative
In addition to the impact on information systems to attain data consolidation, this new compliance regulation will have a far-reaching effect on business operations. The new transparency model will provide detailed payment information to the press, to physicians and to patients, which will have a massive impact on company perception and a company's Key Opinion Leader (KOL) relationship. In the US, for example, third party organisations regularly trawl pharmaceutical companies' online payments data and produce lists of well-paid physicians. With patients, the media and other clinicians looking at this information, the implications are significant, from patients questioning whether prescribing decisions have been financially motivated to clinicians concerned over their public reputations.
There is, therefore, a huge need to provide field representatives with the right skills and messaging to communicate with HCPs who are, in the main, unclear as to the impact of the new regulation. Many are unaware that payments will now be publicly available and failure to prepare them for this transparency could undermine relationships and collaboration with KOLs. How, for example, will representatives respond to a clinician who has discovered that a colleague has received far more remuneration for taking part in a technical evaluation or assessment? Or how will they ensure that the fear of patient disapproval does not prompt physicians to back away from essential collaboration?
Without arming the field force with the skills to address the implications of transparency, the industry risks a breakdown in collaboration with HCPs that could undermine pharmaceutical collaboration for years to come.
In contrast, those organisations that embrace strong messaging could actually benefit from the increase in transparency to boost reputation. Post Servier, there is a clear need to rebuild trust in the pharmaceutical providers. Those organisations that can demonstrate a strong commitment to compliance and highly transparent operations will be well placed to improve public perception. Increasingly, therefore, representatives will be promoting a company's compliance position and reputation as much as specific products.
The implications of these changes in France are likely to extend beyond national borders. The European Commission is working with the European Federation of Pharmaceutical Industries and Associations (EFPIA) in a bid to harmonise transparency measures, especially to patient associations, healthcare providers and government officials. Other countries are also looking closely at the French legislation; the Netherlands is currently going through a consultation process to assess how to improve transparency; while the UK is likely to reinforce transparency measures to deliver nominative, rather than consolidated, transparency.
The emphasis of the French legislation on preventing conflict of interest also ties in with the anti-bribery and corruption laws that have been adopted around the globe, from the US Foreign Corrupt Practices Act (FCPA) to the UK Bribery Act. The new legislation clearly demands French pharmaceutical companies adopt adequate procedures to prevent bribery and corruption and conflict of interest.
It is evident that the trend towards transparency is here to last, as organisations across the world look to eradicate conflict of interest. The implication for pharmaceutical companies is significant; not least in increasing the level of risk from perhaps two out of 10 under the old regulatory regime to seven or eight out of 10 under the new model. This new risk profile has prompted the industry to invest in dedicated compliance officers, a function that has been in place in the US for some years. But it is essential that organisations recognise that compliance extends far beyond recording and reporting detailed payment information; the role of the representative will also be key in both explaining compliance and demonstrating corporate responsibility.
Failure to comply with the Reform du Medicament will incur a €45,000 penalty. But far more damaging will be the impact on the pharmaceutical company's reputation: no organisation wants to risk the negative publicity associated with a conflict of interest or to disenfranchise healthcare providers and jeopardise long-developed relationships.
There is no doubt that the obligation to report and disclose payment information will impact the way the industry is perceived in the market – by patients, HCPs and politicians. But this is not necessarily negative. In many ways increased transparency will, in the long term, be good for the industry. The key is to be proactive now in France and use improved commitment to compliance and transparency to restore a good image with both patients and HCPs.
Guillaume Roussel is vice president, compliance solutions EMEA at Cegedim Relationship Management. He leads all the compliance initiatives throughout Europe for Cegedim. He has worked with the company for the past ten years in various roles: supporting the creation of international customer service organisations, managing different solution launches and establishing successful partnerships with strategic global life science companies. Guillaume has contributed significantly to define the OneKey and Compliance offerings in the US and develop the business on these strategic markets.
Prior to Cegedim, Guillaume was product manager for a Danish medical supply company where he launched and promoted a new brand in the medical device arena.