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Informed choice

In the face of stricter regulation, better data management can arm companies for the future

RadarRegulation is here to stay. Intended to maintain high ethical standards across the industry, regulation bolsters the industry by protecting against bribery and corruption. But even one high-profile breach of compliance can mar the industry as a whole. This grim reality prompts organisations industry-wide to define the standards and determine how to stay in compliance. With stricter regulations increasingly enforced, the consequences are measured in both civil and criminal sanctions. Companies, and even individual executives, are being prosecuted for failing to maintain adequate internal controls. However, by fortifying themselves with the right people, technologies and processes, life sciences companies can handle the regulations and use the increased efficiency to strengthen their businesses.

Even before stricter regulation, the life sciences industry in Europe had begun taking steps to put processes and controls in place to ensure proper interactions with healthcare practitioners and organisations. The difficulty is that monitoring and enforcing these controls manually requires significant resources at a time when the industry is struggling with a rapidly changing market. Thus, leveraging technology to maximise efficiency makes sense.

US influence
European regulators are looking closely at the US model, where life sciences companies are focused on operational compliance. Companies are striving to improve data quality and vendor management and meet regulatory reporting requirements. This will probably lead to increased compliance standards in Europe. Although historically, cultural differences make Europe lean more towards self-policing, US-based corporate officials or local European regulators are already requiring life sciences companies to put controls in place to prevent fraud and corruption while making interactions with healthcare practitioners and organisations more transparent.

The main driver for additional controls required by US-based companies doing business in Europe is the Foreign Corrupt Practices Act (FCPA). The FCPA consists of two provisions: the anti-bribery provision and books and records regulations. The anti-bribery provisions of the FCPA ensure that a company cannot, directly or through someone else, give money, a gift, or anything of value to obtain or retain business with a foreign government official, which includes government-run healthcare practitioners and organisations. The books and records regulations require companies to keep accurate financial records and maintain clear, accurate and adequate controls to protect against improper payments.

In light of this, working with a company that has extensive experience in the US can give European companies a distinct advantage in preparing for greater regulation. The insights shared can allow them to capitalise on the expertise of those already accustomed to a heavily regulated environment.

Investment
Awareness of compliance risk is still spreading across the industry and across Europe. In a recent survey on pharmaceutical compliance in Europe conducted by Cegedim Relationship Management, 53 per cent of the life sciences executives surveyed reported that they were expecting to increase their investment in solutions and resources for aggregate spend reporting and compliance during 2011.

Beyond the FCPA, one other notable reason for this is the arrival of the UK Bribery Act, due to come into effect later in 2011, ushering in a new era of stringent regulation and penalties. Applicable to both public and private healthcare sectors in the UK, it states that an individual convicted of failing to implement adequate anti-bribery control measures can face up to 10 years in prison and unlimited fines.

Other factors driving the increased investment in technology-based compliance solutions are inconsistent and complex reporting requirements, internal transparency requirements to analyse interactions from a compliance standpoint, shortage of internal resources, attempts to build automated reporting and processes, as well as new product launches.

Many organisations across Europe are still developing their strategies and now is the time to set up a robust system that can withstand current and future demands. With companies poised to increase their investment, it is critical for them to invest wisely in something that will pay them back, not only in compliance but also in other aspects of their business.

Here is a specific example of return on investment from a business perspective. If a company implements a compliance system that allows aggregation and a single view of spend related to interactions with healthcare practitioners and organisations, either globally or across a region, it will be able to make educated business decisions on future strategy and direction down to the customer level, for the first time.

Many companies still depend on spreadsheets or manual tracking and reporting. This is especially true of companies with few data sources. However, the costs of these methods are too high in every respect. The ongoing inflated cost of inefficient manual tracking can result in an even more costly compliance breach in the future.

Tailored software
This problem can be solved with software designed to track aggregate spend, alert users to suspicious financial transactions and streamline regulatory compliance monitoring. Some software on the market today is available in two formats, either as a licensed product installed on the computer or as a secure software-as-a-service (SaaS). This provides users with maximum flexibility to suit their needs.

This software should keep executives informed by generating rule-based alerts for a certain country or region. Data should be displayed in pre-defined or customised reports. Temporary access should be granted to third parties and an intuitive interface should allow all users to adjust or make edits with relative ease. Importing data should be simplified and allow for multiple entry points, such as through integration with other business applications, through a self-service interface, and via a data entry user interface. Any new data entered should be fully controlled through detailed audit trails and monitored by automated quality control reporting.

Unique identification
Many companies lack confidence in their internal systems' ability to define the recipient record across all spend sources or across countries. This is the first link in the chain to maintaining accurate records and staying in compliance.

Look for software that can be used to compare companies' data against a continuously updated healthcare reference database, automatically updating the data to reflect the latest information. For maximum accuracy, the reference database should be verified by telephone. For ease of use, it should integrate seamlessly with any customer relationship management (CRM) system, automatically delivering updates every day. Bi-directional service would allow system users to provide updates on the healthcare professionals in their CRM systems which can be quickly verified. Such a solution solves many data-related problems, including providing accurate identification of group practices, affiliations and specialities.

Other software on the market can be leveraged to consolidate all customer data sources and create one master record that still links to each of the original customer data sources. Ideal for companies with multiple customer sources, this makes provider data more reliable and more accessible across the company. It can also reduce the combined cost of deployment, hosting and system management. Accelerating the process from strategy development to data delivery, it also cuts down on bad data and its associated costs.

Such software can provide users with an accurate, master view of customers, organise sales and marketing initiatives and lay the foundation for regulatory compliance.

Eliminate concerns
The top three concerns in complying with regulations typically revolve around data management. As companies prepare for increased regulation, enhancing the data management system is a key consideration.

When consolidating spend data from multiple sources, one of the biggest challenges is incomplete data. A company that cannot pinpoint a healthcare professional from a group of expense data sources will be stymied by inaccurate monitoring and reporting, running the risk of a compliance breach. But even before assigning the unique customer number, the company must reconcile multiple systems and owners, different file formats and numerous third party sources, as well as ensuring that end users are capturing accurate and complete spend data at the source systems.

Add to this the problem of incomplete healthcare provider data and data integration, and the enormity of the task becomes clear. The complexity of just one of these areas can be daunting, let alone the total sum.

Companies can benefit from seeking advice from third parties who can assess their data management system objectively. Data management experts can help them identify all applicable spend sources and determine how complete the data is within each spend source. If gaps are found, they can advise on how to improve data quality during capture. Certain software on the market can also be used to uncover data quality issues and generate the most up-to-date data on each customer.

Targeted solutions to compliance hurdles already exist, designed specifically for life sciences companies and even for European situations. With increased regulation a reality and compliance risk mounting in the months ahead, the risk can be turned into a valuable opportunity. Those with the proper tools can minimise their compliance risk while maximising their resources.

The Author
Bill Buzzeo is general manager and vice president of Global Compliance Solutions, Cegedim Relationship Management

To comment on this article, email pme@pmlive.com

16th March 2011

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