Improving regulatory compliance in the wake of global legislation around anti-corruption has emerged as one of pharma’s key challenges for 2012.
A 2011 Cap Gemini report on impending change within life sciences showed that only addressing ‘fragmented business processes’ and a ‘lack of access to business critical data’ rank higher as the most critical issues for the sector.
But despite widespread recognition of the importance of business transparency in all interactions with customers, a recent study shows that 44% of pharma companies are still using manual paper-based systems to record promotional spend with HCPs.
The survey, European Trends in Aggregate Spend, Transparency and Disclosure, conducted in December 2011 by Cegedim Relationship Management, shows that life science companies are making real progress in their attempts to become more compliant. 94% of respondents report that their company enforces corporate standards for spending on HCPs, and over half (54%) indicate that their company already has a project team in place to address compliance issues.
But, despite 64% believing that the implementation of a unique spend data reporting and disclosure solution is an ‘absolute requirement’, a high number of European companies are using traditional methodology to record activity.
“Europe is at a pivotal moment as it approaches an enforcement model increasingly similar to the US,” explained Bill Buzzeo (pictured), Vice President of Global Compliance Solutions at Cegedim Relationship Management. “Companies are making essential strides at self-enforcement, but according to the 2011 survey, most respondents are reliant on inefficient manual and Excel spreadsheet reporting mechanisms.”
Faced with managing relationships within an already complicated customer jigsaw, medical sales professionals can ill afford the administrative burden of paper-based systems in the modern era.
The increased focus on transparency and disclosure follows the global development and enforcement of regulation and guidance to counter bribery and corruption across business sectors. The US Foreign Corrupt Practices Act and the UK Bribery Act impose criminal charges on companies that breach the law, and have already led to some high-profile casualties in the life science sector. In 2011, Johnson & Johnson were fined $70 million after admitting that the company bribed doctors in Europe and paid kickbacks to win contracts and sell drugs and artificial joints. Integrated technology company Siemens paid $1.3 billion following a bribery case that scarred its medical division, following violations in its healthcare unit.
With further, hard-hitting legislation expected in other parts of Europe this year, companies are being forced to assess their ability to achieve better transparency of aggregate HCP payment data – which in turn is having major implications for the industry’s sales and marketing strategies. Companies in Europe must not only track a complex matrix of marketing and promotional spending, but also keep track of, and uphold, each country’s unique reporting standards.
The Cegedim Relationship Management survey concludes that the US model of operational compliance serves as “the handwriting on the wall”, but warns that European organisations, uncertain as to how to approach transparency in the future, must act quickly to ensure they avoid paying a much higher price.
The UK industry has worked hard in recent years to improve its reputation with customers, and the issue of building trust with HCPs remains a high priority for companies. Medical sales professionals will continue to play a prominent role in achieving this.