Open Payments

Compliance News in Review, November 16, 2015

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The OIG 2016 Work Plan is released, the House of Representatives form a task force to combat rising drug costs, a Massachusetts HCP is indicted in the Warner Chilcott case, and CMS releases informational charts to help clear Open Payments confusion.

He’s an international man of mystery, who’s licensed to kill, and he is back in theaters for you viewing pleasure. He’s Bond, James Bond. The latest installment of the series, Spectre, has hit theaters. The reviews are mixed, but hey, all we ask out of a Bond film is a good vodka martini (shaken, not stirred), spectacular gadgets, and a good chase sequence or two. Whilst we check local screening times, we’ll leave you with our own top secret document to peruse, this edition of the Compliance News in Review.

For Your Eyes Only, it’s the OIG 2016 Work Plan. Okay, it may not be top secret, but the 2016 plan is out and it reveals some interesting news for pharma and med device companies. You may recall that in the 2015 Work Plan, the OIG said it would review the financial interests reported under the Open Payments Program. In this year’s Plan, the agency has slightly revised this initiative (revision in bold):

“We will determine the number and nature of financial interests that were reported to CMS under the Open Payments Program. We will also determine the extent to which CMS oversees manufacturers’ and group purchasing organizations’ (GPOs’) compliance with data reporting requirements and whether the required data for physician and teaching hospital payments are valid.”

Previously, the Work Plan stated the OIG would review whether the required data was reported “accurately and completely displayed in the publicly available database.”

U.S. House and Senate members have no Quantum of Solace regarding drug prices in wake of some recent high profile drug price hikes. In the House, a group of Democrats have formed the Affordable Drug Pricing Task Force to pursue “meaningful action to combat the skyrocketing costs of pharmaceuticals.” In the Senate, the Special Committee on Aging is set to investigate large spikes in drug prices. The Committee sent letters to Valeant, Turing Pharmaceuticals and two other companies for information regarding recent large increases in drugs sold. The Committee also requested a face-to-face meeting with the CEO of Turing. Both Valeant and Turing have also received subpoenas from federal prosecutors regarding their drug pricing policies.

A Massachusetts gynecologist was indicted on several different charges including a count of violating the Federal Anti-kickback Statute in connection with Warner Chilcott case. The indictment also seeks criminal forfeiture of $23,500. If found guilty, the doctor could face up to 11 years in prison and fines up to $325,000.

CMS won’t Never Say Never Again to the inclusion of Open Payments data on the Physician Compare website , but it is a no for now. After receiving comments and some consumer testing, it was determined the data is different that data presented on the Physician Compare website. CMS will continue to conduct tests with consumers to determine how best to frame the data.

In the past, the hierarchy associated with teaching hospitals has confused The Living Daylights out of reporting organizations that try to determine how to report payments in the Open Payments system. CMS hoped to clear the confusion by providing a couple of during a recent webinar. One chart is intended to help reporting organizations determine when and how to report payments to teaching hospitals. The other is an organizational chart to help show how the various entities roll up to a teaching hospital on the CMS teaching hospital list. Other topics covered during the webinar included record validation changes for 2015, and how to report stock and stock options as forms of payment.

CMS has been working diligently to improve the Open Payments system. The recent news of improvements offers a good reminder for companies to survey their programs, to make sure  all of the pertinent information related to the changes is being communicated. While the process of preparing systems to handle those changes is important, stakeholders such as sales, R&D, and vendors also need to be aware of how those changes affect their interactions with customers. On-going training is critical.

Well, that’s all the compliance news fit to blog for this edition. Have a great week everyone!

The 2015 Pharmaceutical Compliance Congress: A Review

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The Sixteenth Annual Pharmaceutical Regulatory and Compliance Congress, in Washington DC, featured legislators and industry leaders discussing hot topics and best practices to a diverse and rapt audience of compliance professionals.

Annual OIG Update from Mary Riordan

The opening plenary session kicked off with the annual OIG Update, from Mary Riordan, Senior Counsel, Office of Counsel to the Inspector General. In addition to her usual review of recent settlements actions (False Claims and otherwise), and the OIG’s Fiscal Year 2015 Work Plan, Riordan focused on the responsibilities of boards of directors in company compliance functions, and urged the audience to use the OIG’s April 2015 Practical Guidance for Healthcare Governing Boards on Compliance Oversight as a starting point for those expectations. Staying on the topic of board responsibility, she pointed out that prior to her appearance at the conference, Millennium Health LLC had entered into a Corporate Integrity Agreement that requires the company to maintain a majority of independent (non-executive and non-family) directors as part of the settlement.

When stressing that kickback concerns continue in the industry and for her agency, Riordan suggested that attendees “think about the kickback risks associated with financial relationships and strive to identify the relationships that would implicate risks.” What controls are in place? Are those controls meaningful and effective? She emphasized that the OIG was there to help and their goal is “not to collect penalties, rather, it is to encourage companies to comply.”

She also focused on individual accountability and reminded the audience that “individual accountability at all levels of organizations is under fresh scrutiny as the OIG tries to identify individuals responsible for misconduct.”

AUSA Panel

The Assistant US Attorney’s (AUSA) Panel followed with Charlene Keller Fullmer from the US Attorney’s Office in Philadelphia, Jeffrey Steger from the Civil Division of the DOJ, and Kristen Williams from the US Attorney’s Office in Los Angeles, presenting their views on the direction of compliance enforcement. Keller Fullmer said her office continues to see off-label cases focused on kickbacks, particularly with small companies and medical device companies. She pointed out that with smaller companies, pinpointing a paper trail is an easier and less cumbersome process than it is with the larger companies. Following up on Mary Riordan’s comments, she also suggested a review of recent CIAs, and their emphasis on individual accountability.

Williams recited her office’s mantra of “come in, come early, and come often” when discussing how companies should react to an investigation. Demonstrating a robust approach to compliance is critical when she evaluates a compliance program. She recommends a proactive approach, one in which a company responds to issues, before those issues even arise in that company.

For Steger, the key to a successful compliance program is one that involves more than just compliance personnel (a theme throughout the conference). Is compliance part of the company’s culture? Has the company taken proactive steps to initiate and invite feedback, e.g., an 800 number compliance tip line?

FBI’s New Focus on FCPA Investigations

The next plenary presentation was a bit of a twist on the usual agenda, as Jeffrey S. Sallet, National Chief of Public Corruption and Civil Rights for the Federal Bureau of Investigation, offered the update on the Foreign Corrupt Practices Act (FCPA) from the Bureau’s perspective. The focus was on a “five pillars” approach to successful enforcement and according to Agent Sallet, only through a partnership with the public, industry, and other governmental agencies like the SEC, DOJ, and IRS, can the FBI be successful in its goals to encourage a global culture of compliance.

Agent Sallet’s enthusiasm and energy was a tough act to follow and after a break, Thomas Abrams, Director, Division of Drug Marketing, Advertising and Communications, Food and Drug Administration followed up with his annual FDA-Office of Prescription Drug Promotion (OPDP) update. As per usual, Abrams presented a plethora of notes and comments describing the FDA’s efforts over the last year, a high-level review of the document and advertisement submission process and summaries of guidance released and/or updated by his office. These include the 2014 guidance documents on the use of social media.

Abrams closed with a great example of a sales aid that spurred a warning letter from his office. The product being promoted was contraindicated for children under 6 year of age, but the aid included an image of a very young child in its montage of images, and it included no risk information. Seeing such a clear violation provided a concrete and powerful case for why companies need to take the OPDP’s guidance seriously, and regularly test the process for submitting samples through the agency’s email dedicated to that process – ESUB@fda.hhs.gov.

Chief Compliance Officer Roundtable

Following the FDA presentation, a Chief Compliance Officer Roundtable focused on the evolution of compliance programs following the expiration of Corporate Integrity Agreements. CCOs from an array of pharmaceutical companies agreed that while the end of the CIA did not cause drastic changes in their programs, it afforded them the opportunity to expand how they approached topics like training.

One panelist began by stating that on Day 1 following the expiration, there were no public displays and no celebrations, saying “it was business as usual.”

Another panelist recalled that her department was relieved that they could now think beyond four hours of online training and include “short spurts of training throughout the year.” When asked about tracking that training, the panelist admitted that doing so was sometimes a challenge, but the organization was able to “focus on getting back to their true purpose, educating the learners.”

A third panelist brought up the topic of policies and how the shift to a post-CIA environment gave them an opportunity to survey the full staff for thoughts on what works best in compliance polies and subsequently revamp those policies based on that feedback. The company even hired a creative agency to help them create documents that presented policy content in a more graphical and engaging fashion.

The fourth panelist emphasized the importance of developing a risk assessment model and addressing risk-based needs accordingly. Others agreed, emphasizing that they are now using data analytics gathered during the CIA to address those risks.

FCPA Anticorruption Panel

Day 1 closed with a unique twist on the standard presentations, as a panel of in-house and outside attorneys discussed the FCPA through the lens of a hypothetical case. The structure offered a relief from the standard didactic approach to the content, with moderator, Gary Giampetruzzi, Partner at Paul Hastings, guiding panelists through the scenario.

The scenario was structured and branched in a manner that allowed for gray areas and debate as to the best resolution for each question. As an example, when discussing whether post CIA, the Compliance department should be moved back into the Legal department, one panelist avoided what may have seemed the obvious answer of “no,” and stressed that combining the two would be okay if Compliance still had independence despite the structure. An attorney on the panel agreed, especially in terms of the Foreign Corrupt Practices Act, having that independent voice is the key.

US DOJ Civil Section Update

Day 2 started early, with an 8:15 AM update on the DOJ Civil Section from Benjamin Mizer, head of the agency’s civil division. Mizer discussed the growth in qui tam civil cases (FY 2014 saw 469 healthcare-related cases) and presented compelling statistics on the cases involving rewards to relators. In a comment that was prevalent throughout the conference, he reminded the audience of the government’s use of data to expedite investigations and make a decision as to whether or not to proceed.

Update from CMS on Open Payments

The highly-anticipated presentation from Douglas Brown of CMS didn’t disappoint attendees interested in learning details around the data collected and the updates/improvements to the Open Payments system. Brown pointed out that covered recipients with higher counts of payments records were more likely to review and dispute transfers of value, and there were just over 30,000 disputes, equally divided across teaching hospitals, physicians and principal investigators.

On the enhancements front, the agency is focusing on eliminating the character limitations in the system, so email addresses won’t be blocked. The ability to download reported records will also be enhanced to include dispute information and recipients will have the ability to exchange contact information with the reporting entity to further facilitate the review and dispute process.

After providing the audience with a number of reminders, (e.g., device names are now required on submissions, and TOVs to physician-owned distributors are considered indirect payments and must be reported), Brown informed the attendees that the next Open Payments Open Session Webinar is scheduled for Thursday, October 29th.

Qui Tam Panel

The Qui Tam Panel started with Jillian Estes of James Hoyer Newcomer & Smiljanich, PA, reviewing her recent representation of a relator who worked undercover seven years in a pharmaceutical company investigation. Estes used the case to describe who she considered the ideal relator – a principle driven person with a fearless mindset, who is willing to suffer the consequences of a whistle blower. The individual needs to be realistic in expectation and understand that the process is a long one, usually 3-5 years.

Joseph Trautwein, of Joseph Trautwein & Associates LLC, made it clear that the reason potential relators come to him is because they went to their employers first and the situation was not corrected. The panel listed the characteristics of a good whistleblower case:

  • A lie took place
  • A party benefits form the lie
  • The scheme can be easily explained to the government
  • There is enough evidence of misconduct that the complaint will survive a motion to dismiss
  • There is proof of damages
  • It’s a “good story”

Off-Label Communications and the First Amendment

In the final plenary session of the morning, Paul Kalb of Sidley Austin LLP, delved into the Amarin and Pacira lawsuits, whereby the companies presented the argument that criminalizing off-label promotion when it is used to communicate truthful information is unconstitutional. Kalb reviewed the potential ramifications of those cases and closed with the reminder the proverbial jury is still out on how on-going cases will be settled. Based on recent rulings though, we are fast approaching a fork in the road in this core and critical compliance issue.

Mini-Summit: Evaluating Compliance Program Effectiveness

Among the first series of “Mini Summit” breakout sessions, I chose to attend the Evaluating Compliance Program Effectiveness – Board Responsibilities, Board Advisors, and Compliance Experts panel discussion and Q&A.

The first panelist indicated that a good starting point for evaluation of the program is how the company manages high-risk third parties. Are there strong and effective controls in place for third-parties doing business on behalf of the company? Another stressed the need to have outside counsel involved in the program to provide an outsider’s view on the process and the program. A third panelist felt strongly that having people with different backgrounds on the compliance team is important. He also suggested that attendees look at the OIG’s recent guidance for board oversight of the program. “The board needs to demand frequent dialogue,” he said. Another felt that board members have a responsibility to ask questions, review the data, and speak up.

When evaluating training, one panelist emphasized the power of employee surveys to assess whether all participants understood the content of the training. When an audience member asked whether those surveys should be broad or targeted, that panelist said it depends on how each company operates and another added that at his company, they survey the entire employee population.

One panelist also warned the audience about the risk of getting too comfortable in their policies and procedures. New people coming into the company may be coming from a different industry, and may not have had orientation to a compliance program. “Be ahead of the curve,” he said, “when decisions like Amarin come down, you need to be having a conversation.” A fellow speaker followed with the need for an interaction between compliance and the businesses. “It’s important to vet your compliance procedures with the business owners,” he said.

Mini-Summit: Managing Multi-national HCP Meetings

In the Managing Multi-national HCP Meetings: Complying with the Codes and Transparency Requirements session, a panel from around the world discussing the codes and laws relevant to their particular regions.

One industry executive discussed the challenge of holding meetings with physicians from around the world, who each bring their own set of rules from his or her home country. For example, when holding an advisory board with multinational participants, how should meal limits be addressed when those limits vary? The company establishes ground rules but allows common sense to prevail – for example if a limit is slightly above the physician’s home limit, allowing the meals may be a more realistic approach. The executive added that it’s important to create a list of approved meeting places in each country and to train travel agencies on that list.

Hwa-Soo Chung of the Kim & Chang Law Firm in Seoul, South Korea, reviewed the rules in her country, where practices are driven by industry codes with strict limits on speaker meetings no matter where the meeting is held. That severely restricts how much companies around the world can invite Korean doctors to their meetings.

According to Yuet Ming Tham, of Sidley Austin and former Asia-Pacific Compliance Director for Pfizer, “the biggest risks are Korea and China.” The companies she works with will go for lowest meal limit among the group of physicians. In terms of content, companies should always follow the rules of where the meeting is taking place.

Summary

The Sixteenth Annual Pharmaceutical Regulatory and Compliance Congress managed to deliver new perspective and debate on the topics facing the life sciences compliance industry, despite what some attendees described as a lack of new guidance, news or government policies in recent months. Each day of the conference was filled wall-to-wall with the type of keynote speeches, panel discussions and networking opportunities both experienced professionals, and newcomers to the field, need to consider as they strive to create and maintain compelling and effective compliance programs.

Thanks for reading,

Sean Murphy

About NXLevel Solutions

Through its PharmaCertify™ division, NXLevel Solutions helps life science companies build positive compliance cultures and reduce risk through innovative training and communication solutions. Our newest tool, TOVdisclosure.com, is a streamlined and intuitive site that enables manufacturers to share payments information with HCPs and HCOs before data is reported to CMS or other authorities. Contact us or visit TOVdisclosure.com for more information.

Compliance News in Review, October 14, 2015

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A survey of physicians in the UK reveals negative opinions of the pharmaceutical industry, another pharmaceutical company settles kickback allegations with the DOJ, BMS enters into an FCPA settlement, and new legislation aimed at adding to industry reporting requirements is introduced in the Senate.

The boys of summer are singing their swan song. The MLB playoffs have begun! If your team is in the hunt, congratulations, but unless you’re pulling for the Cubs, getting too excited is useless. Robert Zemeckis says the Cubs will take it all, via Back to the Future 2 of course. There’s just one problem though, Miami won’t be the Cubs opponent, as predicted by the film, but hey when one predicts the future, there are bound to be just few hiccups. While we wait to test the accuracy of the director’s clairvoyance, let’s take look at the more recent past, with this edition of the Compliance News in Review.

First up to the plate are a group of physicians who are unhappy with the pharmaceutical industry. A recent survey of physicians in the UK found that almost half of the respondents had a negative opinion of the pharmaceutical industry. The primary reason was the belief the industry focused too much on sales and marketing. Other reasons included the lack of understanding of physician needs and budgetary pressures. The negative view is leading to increased resistance to face-to-face meetings with sales representatives. Ironically, the survey showed physicians who did meet with sales representatives were less likely to have a negative opinion of the industry.

After a meeting on the mound with the DOJ, PharMerica has agreed to pay $9.25 million to resolve kickback allegations. According to the DOJ, the company, which provides pharmacy services to nursing homes, received and solicited kickbacks from Abbott Laboratories in exchange for promoting the use of the drug Depakote for nursing home patients.

After some allegedly foul behavior in China, BMS has entered into a $14 million settlement with the SEC to resolve FCPA charges. The SEC alleged that BMS China sales representatives bribed doctors and then inaccurately recorded the bribes as a business expenses. The SEC claims BMS failed to respond to bribery red flags, and failed to investigate employee claims that fake invoices were being created to hide the bribes.

Industry and physician groups are not happy about a proposal by CMS to include Open Payments data on the Physician Compare website. In July, CMS sought comments on a proposal to include Open Payments data on the Physician Compare website. AdvaMed and BIO both pointing out that the payments would be presented without proper context. PhRMA said that CMS should focus on improving how the data is presented on the Open Payments website before sharing it on another website. The AMA expressed similar sentiments, saying it was opposed to the sharing of data that physicians haven’t validated as accurate, and pointed out there was still much work to be done in this area on the Open Payments website.

Team Sunshine Act is back in the game. Senators Grassley and Blumenthal introduced legislation that will require drug and device manufacturers to report payments and transfers of value to mid-level practitioners. The legislation is called the Provider Payments Sunshine Act, and if passed, would go into effect in 2017. Senator Grassley said the law closes a void in the current requirements, and it would provide a complete picture of the payments provided to healthcare providers. Senator Blumenthal said all providers need to be “held accountable,” and that this level of disclosure is necessary “in today’s world.”

Transparency continues to be a hot topic in the industry, both in the US and abroad. We’ll be watching to see if the law proposed by Senators Grassley and Blumenthal makes it out of the Senate, or if more states take up the initiative to pass laws requiring the reporting of payments to mid-level practitioners.

The evolving nature of transparency laws and requirements requires pharmaceutical and medical device companies to actively train and communicate with employees about what’s expected. Effective training is needed to ensure compliance with the laws and requirements, and, as importantly, to work toward clearer communications between sales representatives and the healthcare providers whose information will be disclosed.

Have a great week everyone!

Compliance News in Review, October 5, 2015

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CMS releases a new teaching hospital list and de minimis thresholds, ICD-10 is launched, New Hampshire investigates manufacturers of painkillers, and the UK Ministry of Justice reverses its position on expansion of the law.

It is fall y’all! Okay, so the stars and the calendar may have said fall arrived a couple of weeks back, but it just doesn’t seem real until we hit October. The air gets a little crisper, the leaves start changing, and we sadly reach that point when we hope against hope that we can make it through the night without turning the thermostat to “heat.”

Before you know it, all the pumpkins and scarecrows will give way to mistletoe and snowmen (insert collective groan here). Before we all run out for the annual jump into the pile of leaves, let’s grab a cup of cider and your favorite pumpkin spice treat, and review all the compliance news fit to blog, with this edition of the Compliance News in Review.

October first was quite a busy day! First, CMS released the teaching hospital list and de minimis thresholds for Open Payments. In 2016, payments to Covered Recipients of $10.22 or higher will have to be reported and the annual aggregate reporting threshold will be $102.99.

Second, Medicines Australia’s new transparency requirements went into effect. Even though the Code of Conduct was effective in May of this year, implementation of the new transparency requirements was delayed until October. One of the major changes in the transparency requirements was the requirement to report at an individual HCP level rather than in the aggregate.

Finally, October 1st was the “go live” date for ICD -10 (International Classification of Diseases, 10th edition). ICD-10 is the set of diagnostic and procedure codes used by healthcare providers to bill insurance providers and government healthcare programs. The transition to ICD-10 was mandated by the Centers for Medicare and Medicaid Services and is intended to provide more detail over the previous coding system. CMS says ICD-10 will help better “accommodate future healthcare needs, facilitating timely electronic processing of claims by reducing requests for additional information to providers.” While specificity can be a good thing, could ICD-10 be taking it a bit far? Check out some of the more unique codes in the new system. A couple of our favorites are “W56.22xA- Struck by an Orca, initial encounter,” (which apparently spawned a whole book) and “W49.01XA Hair causing external constriction, initial encounter,” also known as the Flynn Rider Code.

New Hampshire is turning a cold shoulder to opioid makers. The state’s Attorney General’s Office has announced it will be investigating the marketing practices of several manufacturers of painkillers. The AG’s Office believes the companies may have engaged in fraudulent marketing practices, which may have misled doctors and patients about the addiction risks and effectiveness of drugs.

The UK is changing its colors regarding expansion of the Bribery Act. Prosecutors had been petitioning to expand the law to make it easier to prosecute businesses involved in bribery, but in response to questions from lawmakers about the proposed changes, the Ministry of Justice said it was no longer interested in pursuing the matter. The response said there was “little evidence of corporate economic wrongdoing going unpunished.”

Conflicts or confluence – decisions, decisions. A recent editorial in the Journal of the American Medical Association (JAMA) makes a case for falling away from using the phrase “conflicts of interest” when describing the secondary interests involved in clinical research. The authors suggest “confluence of interest” instead. They say “conflicts of interest” automatically sets up the notion that something wrong is taking place. The authors point out that in academia, notoriety and fame could be a stronger influence on bias than financial reward. Universities, research institutes, the NIH and medical journals can all impact bias.

October has certainly started with a bang, in the world of physician spend transparency, both here in the U.S. and abroad. The news offers a good reminder that transparency and disclosure measures are constantly evolving. Yet another change will be upon us in 2016 with the removal of the exclusion for speaker of faculty payments for accredited CME.

With all of the changes in motion, now is a perfect time to refresh your company’s training on the requirements of the Sunshine Act and Open Payments. Ensuring your team is aware of the changes is critical, and those in the field need to understand the impact the law has on the healthcare providers they interact with on a regular basis.

That’s a wrap on this edition of the Compliance News in Review. Enjoy the cool weather everyone and have a great week!

CBI’s 9th Annual Forum on Transparency and Aggregate Spend: A Review

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CBI’s recent Forum on Transparency and Aggregate Spend covered a variety of topics affecting the collection and reporting of aggregate spend data. The conference featured speakers from industry, government agencies, and service providers sharing lessons learned and best practices related to aggregate spend collection and data disclosure.

After a day of pre-conference workshops, the main conference began on Day Two, and it started with a bang. The keynote address, An Update on Open Payments Reporting, was delivered by Doug Brown, CMS Group Director, Data Sharing and Partnership Group, Center for Program Integrity. Mr. Brown shared statistics on the data submitted for the 2014 reporting year. 11.4 million records were received, covering 600,000 individual physicians. In a vast improvement over the previous year, 98% of submitted records were accepted. Brown attributed this improvement to the introduction of the validated physicians list (VPL) and better data matching. An analysis of rejected records is underway, and CMS is looking for ways to improve the taxonomies associated with covered recipients.

During the review and dispute period, CMS received 30,000 disputes on 25,000 unique records. The disputes were evenly distributed among the covered recipient type, with physicians representing 35% of disputes, teaching hospitals 38% and principal investigators 27%. According to Brown, disputes were evenly split between the general and research payments reports. Very few disputes were lodged against payments reported on the ownership report. The median value of total payments is 4.5 times greater for registered physicians versus unregistered physicians.

Brown also shared information regarding the anticipated enhancements to the Open Payments system. The restrictions around special characters in the text fields will be removed (cue the heavenly choir). CMS is also working to better facilitate the review and dispute process. According to Brown, many of the disputes were not true disputes, but could better be classified as inquiries. CMS is working to provide a method for distinguishing between a payment inquiry and a payment dispute. The agency is also working to enhance the ability for manufacturers to download their data from the site, regardless of the file size, and it hopes to extend this capability to covered recipients as well.

Brown reminded the group that new de minimums payment information and the list of teaching hospitals will be released on October 1st. CMS is planning more Q&A teleconferences in the future. Speaking of which, during the Q&A period following the presentation, Brown was asked about having a moderator on teleconferences to alleviate the “wild west” that currently exists when the call opens up for participant questions. He said that was something he would absolutely consider, but he prefers the conversational style of the current format.

William Killian, U.S. Attorney for the Eastern District of Tennessee, and Jacob Elberg, Chief, Healthcare and Government Fraud Unit, of the U.S. Attorney’s Office for the District of New Jersey, also presented on behalf of the government. They discussed current trends in government enforcement. Mr. Killian said emerging enforcement trends in his and other offices involved fraud related to Medicare Part D, lab services, hospital services and hospice care. He noted that the civil and criminal prosecutors are often involved in parallel prosecutions. Mr. Elberg referenced a continuing trend in his office involving the prosecution of kickback cases. He said those cases are typically at the individual practitioner level, and occur locally or globally. Cases that involve activities outside the U.S. can implicate the FCPA and his office shares information with FCPA fraud units. Elberg also discussed other continuing trends involving FDCA prosecutions, including those involving off-label promotion and cGMP violations.

Rounding out the “law-focused” presentations for the day was a presentation about state laws by Brian Bohnenkamp of King & Spalding. Mr. Bohnenkamp led off by discussing federal pre-emption and how it relates to state reporting. He noted that there are times where the reportable items under federal law are not reportable under state law (and vice versa), and reminded the audience of the criteria for pre-emption under the Sunshine Act. He suggested that decisions on whether pre-emption should be applied to a particular payment should be made on a case-by-case basis. He also noted that they are seeing more companies take advantage of federal pre-emption in reporting under state laws, and used the example that a number of companies did not have anything to report under Minnesota’s law due to that pre-emption. Bohnenkemp also highlighted the recent exemption in D.C.’s detailer licensing requirement for individuals who are involved in detailing for “less than 30 consecutive days per calendar year,” and he reviewed prescription drug pricing transparency proposals in a handful of states – one example being Massachusetts, which still had not provided guidance about quarterly meal reports reported under that state’s law.

The majority of the rest of the Day Two sessions focused on data and processes directly related to interacting with the Open Payments system. Sessions and panel discussions covered topics such as leveraging the data within the organization; using data to minimize compliance risk; and remediating data and the data attestation in Open Payments. Two key themes emerged: 1. Clean data is key (the garbage in garbage out idea) and 2. Communication with the organization and those outside the organization (your vendors and physicians) about the data is critical.

A number of speakers and panelists in the sessions stressed the importance of consistency in names, addresses, and format for physician ID numbers across the various in-house and vendor systems that house spend data. A periodic review of the data is an important best practice to deal with any issues along the way. Most panelists and speakers felt that a quarterly review was an achievable goal. More frequent reviews would be ideal, but could prove a challenge for companies with fewer resources. In addition, companies should engage the business early and often about what the data reveals and how that information can be leveraged to reduce risk and impact sales. Communication with physicians in advance of the CMS review and dispute period was recommended. This does not necessarily mean disclosing all the data, nor pre-disclosing to every physician about whom you have data. Setting a minimum TOV threshold for pre-disclosure, or pre-disclosing only to select KOLs were suggested as means of making the pre-disclosure beneficial to both the physician and the company.

Speaking of physicians, Day Two included a panel discussion moderated by PhRMA Executive Vice President and General Counsel, John Murphy, on the physician’s perspective of Open Payments. Panelists included Dr. Maya Babu of the Mayo Clinic and AMA Board of Trustees member, and Dr. David Barbe, former Chair and current member of the AMA Board of Trustees. The panelists said the main concerns of physicians are centered on the potential for bad data being presented to public, the ability for physicians to access the data, the implications of the data, and the impact the Open Payments program will have on relationships with the industry. While there have been improvements in the registration process, there are still issues with access, specifically, problems with particular browsers being able to access the site. The panelists felt strongly that being able to access the data through a site set up by the manufacturer would be helpful, or even having a sales rep provide the data personally.

The United States certainly hasn’t cornered the market on physician spend transparency. Global transparency was addressed on Day Two, predominately in a discussion group at the end of the day. On Day Three an entire morning track was dedicated to issues related to global transparency. The featured presentation (and highlight of the conference) was an address by Andrew Powrie-Smith, Director of Communication for the European Federation of Pharmaceutical Industries and Associations (EFPIA).

Mr. Powrie-Smith briefly covered the nuts and bolts of the EFPIA Disclosure Code before turning to a discussion of transparency in general. The industry believes transparency is about demonstrating that there is value in the collaboration between industry and healthcare professionals/organizations, which ultimately delivers better patient care. However, being transparent is not without its challenges. Primarily, with the exception of countries, such as France, where there are physician spend disclosure laws, managing transparency efforts in face of the EU privacy laws is challenging. The EFPIA Disclosure Code requires the disclosure of certain transfers of value at the individual practitioner level, and requires that disclosure to be made available to the public. In order to meet these requirements, companies must obtain consent from physicians to disclose private information about them. Further complicating the matter is that even if consent is given, it can be revoked at any time.

Mr. Powrie-Smith said EFPIA is currently conducting a survey regarding the industry stance on obtaining the necessary consents for disclosure of transfers of value at the individual level. Thus far, EFPIA has seen a large variance in the rate of consent across Europe. A culture shift is necessary to address the variance and the industry must take a leadership role in that shift.

The concept of gaining and managing consent was emphasized in other presentations as well. Representatives from BMI Systems shared data on the rates of consent presented by various pharmaceutical industry trade organizations at an EFPIA meeting in May. In Germany, the consent rate was 50-55%, and the industry trade organization in the country said that was about what they expected for the first year. Poland’s trade organization noted in March they were at a 20% consent rate, and Spain’s trade organization reports only a 10% consent rate. Representatives from IMS Health dug into issues with gaining consent as well. They discussed how codes and laws differed from country to country, specifically regarding the timelines for obtaining consent (e.g., at time of contract, or at any time during the reporting period); the scope of the consent (e.g., per activity type, per contract); from whom consent is required (e.g., HCPs or HCOs); and required consent documentation (paper or digital).

The 9th Annual Forum on Aggregate Spend and Transparency offered useful information for any attendee responsible for data collection, report submission, or analytics inside or outside the U.S. Beyond the nuts and bolts of aggregate spend, the presentations focused on the value of the data for the organization and the physician. Data provides insight for commercial teams and their programs, and the compliance risks for the company. Most importantly, as communicated by Andrew Powrie-Smith, transparency around spend data is important, because it reveals the benefits of the industry/HCP relationship to patients, payers and the public.

 

News in Review, August 11, 2015

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Industry support of CME increases in 2014,  NuVasive settles False Claims charges while Mead Johnson deals with FCPA charges, and Amarin wins a preliminary injunction in its off-label case against the FDA.

The dog days of summer have certainly arrived in most of the U.S. with temperatures that are best described as hot, hot, hot! Thanks to Willis Carrier and his wonderful invention, we can at least find occasional respite from the sun’s rays and the humidity. So while you wait for a break in the heatwave, crank the A/C up a few notches, grab a cool beverage, and just chill with this edition of the Compliance News in Review.

According to a report from the Accreditation Council for Continuing Medical Education (ACCME), industry support of CME increased 2.4% in 2014. According to the report, industry support represented about a quarter of all CME revenue in 2014, whereas in 2007, that support was closer to half (46%) of CME revenue. Physician attendance at CME dropped by just over one percent, but non-physician attendance rose six percent.

The heat is off for NuVasive now that it has settled with the DOJ. The company has agreed to pay $13.5 million to settle charges it violated the False Claims Act by marketing a product for surgical uses for which it was not approved. According to the government, the company marketed its CoRoent System for several spinal surgical procedures for which it was not approved. The DOJ also claimed kickbacks, in the form of speaker fees honoraria, were paid to induce physicians to use the system. The company was also accused of paying kickbacks for physicians to attend events hosted by Society of Lateral Access Surgery (SOLAS), an organization that was entirely organized and funded by NuVasive.

Mead Johnson entered into a settlement with the SEC to resolve charges it bribed Chinese government healthcare workers to recommend its infant formula, in violation of the FCPA. According to the SEC, the company funded the payments through distributor allowance funds paid to a third-party distributor, and then directed the third-party on how those funds were to be used. Allegedly, the payments were not properly reflected in the company’s books and records.

Insys also finds itself in the doghouse; or in this case, we’ll say the duck house (okay, it’s a reach, but stay with us here). Insys Therapeutics has entered into a settlement with Oregon to resolve a deceptive marketing case. The State claims the company marketed an opioid painkiller for treating mild pain that was only approved for treating pain in cancer patients who are not responding to other types of painkillers. The State also claims the company paid physicians for writing prescriptions and used unqualified physicians to promote the product. The settlement will be split between the State and an organization dedicated to the prevention of opioid abuse, which will be selected by Oregon’s Attorney General.

So it appears, this off-label promotion dog can hunt. Amarin, the company suing the FDA over its ability to promote its fish-oil drug for off-label uses, has won a preliminary injunction against the agency. The injunction is not a final order, but for now, the FDA cannot prevent Amarin from the truthful off-label promotion of its product. The drug is approved for treating patients with very high levels of triglycerides. Amarin would like to promote the drug for use with patients that have moderately elevated triglycerides levels, despite being on a statin.

Like the Caronia decision before it, the Amarin case certainly raises interesting questions about the future of truthful off-label promotion. While a compliance training session may not be the place and time to delve into a discussion of that future, the decision does present an opportunity to discuss off-label promotion and how to address questions related to off-label use. Why not take this opportunity to launch refresher training, or distribute an updated, quick-reference communication piece? On-going reminders about what constitutes off-label promotion, and the policies your organization has in place to address unsolicited questions, are part of any effective compliance curriculum. The case also creates an opportunity to work with commercial team managers on a plan to increase the dialogue about the topic with their teams. Off-label is in the news and the training opportunities abound.

Compliance News in Review, July 20, 2015

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The House of Representatives passes the 21st Century Cures Act, two companies settle AMP charges, oral arguments begin in Amarin v. FDA, and CMS updates its Open Payments FAQs.

Diamonds are not only a girl’s best friend…a very special mouse is fond of them as well. The Happiest Place on Earth (or, at least the one in California), is celebrating its diamond anniversary. Happy 60th Disneyland! The place has certainly changed in its 60 years, but fan favorites such as Mr. Toad’s Wild Ride and the Jungle Cruise have stood the test of time. In true Disney fashion, the party isn’t just a one day affair; it actually started back in May and will likely continue through the fall, if not into 2017. Before we cut the cake with the big ears, we have a bit of “magic” of own to administer. Grab a churro and settle in for this edition of the Compliance News in Review.

The House is celebrating the overwhelming passage of the 21st Century Cures Act. The bill is designed to fund research and change the FDA’s drug and device approval process. It includes a change to the rule its provisions are changes to the Sunshine Act which would exclude the reporting of the value of journal reprints and payments for CME.

AstraZeneca and Cephalon may be feeling a bit Grumpy. The two companies reached separate agreements with the government over charges related to underpaid Medicaid rebates. According to a whistleblower, the companies improperly reduced the Average Manufacturers Price (AMP) of their products by subtracting fees paid to wholesalers. The companies paid $46.5 million and $7.5 million respectively to settle the matter.

Oral arguments began in Amarin’s suit against the FDA. The company cited the Caronia decision and the Sorrell v. IMS decision in its argument. Much of the discussion centered on the type of disclaimers need to accompany off-label promotion and not whether Amarin even has a right to do so. The FDA’s lawyer argued the interpretation of the Caronia decision should be very narrow but the judge disagreed. A judicial order is expected in a few weeks.

The whistleblower in a case against Endo may be throwing a Mad Tea Party now that she’s been awarded $33.6 million for her efforts. The case, which was settled with the government in February of last year, involved the off-label promotion of the company’s pain patch. Despite a recommendation from government lawyers that the whistleblower receive 19% of the settlement, the federal judge awarded her 24%, citing her “extraordinary effort” in the case. The whistleblower initially filed suit in 2005, and spent five of the nine years that followed working under the direction of the FBI.

CMS has sprinkled some Pixie Dust over the Open Payments FAQs, and sure enough new FAQs have taken flight. Several of the new FAQs have to do with physicians and teaching hospitals being able to access, review and dispute the data now that the review and dispute period has closed.

If the FAQ updates weren’t enough, CMS was back for a second ride with updated information about the reporting of CME payments on the Law and Policy page of the Open Payments website. Beginning in 2016, manufacturers will have to report indirect payments to CME providers if the manufacturers learn the identity of the physician attendees or speakers within the reporting year, or the first two quarters following the reporting year.

The updates to the Open Payments website remind us that the program is evolving. Your company’s training needs to evolve and grow as well. Affected personnel need to be updated on changes, and reminded of the need to communicate with their physicians. Now is the time to map out your plan for refresher training and refocus your aggregate spend and sales personnel.

That’s a wrap on the compliance news fit to blog for now. Have a great week everyone.

 

 

Compliance News in Review, July 10, 2015

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The government targets Novartis for False Claims violations, pharmaceutical companies map out a plan to keep medication flowing into Greece throughout the crisis, and the industry as a whole ponders the impact of the CMS release of 2014 transparency data.

The days are long and lazy – it’s time for summer vacation! From the beach, to the mountains to foreign destinations, the News in Review staff is finalizing plans for summer R&R. Rest assured though, we are still hard at work keeping up with all the compliance news fit to blog, starting with this sun splashed edition of the Compliance News in Review.

The Justice Department and 11 states are putting a dent in the Novartis vacation account with a $3.4 billion charge for damages and fines in a False Claims Act case involving kickbacks to pharmacies. According to prosecutors, the company offered rebate and discount programs to pharmacies in exchange for increased prescriptions of two drugs. Novartis disputes the allegations and says it will continue to defend itself. A trial has been set for November.

Pharma companies are mapping out a plan to keep medication rolling into Greece. According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), the complexity and fragmented nature of the Greek medicine supply chain makes the flow of medication vulnerable. Pfizer, Roche and Novartis said they have plans to ease any shortages during the crisis, and AstraZeneca and GSK have both said they are drawing up contingency plans to keep medicines in supply.

CMS and agg spend folks are probably ready for a break in their routine now that the 2014 Open Payments data has been published. The data shows that companies paid physicians almost $6.5 billion for the year, with over 11 million transactions reported. Research payments topped the list with over $3 billion paid, there were $2.5 billion in general payments and $700K was reported on the ownership reports. CMS was able to validate close to 99% of records submitted to the system, which is a vast improvement over the 2013 data. As was the case in 2014, the majority of the reported payments were small. Sixty-six percent were for payments of less than $20. Research and royalty payments represented the largest dollar amounts.

Once the Open Payments data was released, the numbers quickly found their way into the media. The focus on payments to physician and the influence those payments have on prescribing decisions and healthcare at large is at an all-time high. That level of scrutiny highlights the need for training on the Sunshine Act and Open Payments – especially for those interacting with HCPs. While much of the work related to the reporting requirements is a “back office” function, those interacting with HCPs are often the first to hear concerns from the field and they need to be prepared.

In addition, the public release of the data opens companies to examination of their business practices from whistleblowers and enforcement agencies. Critical evaluation of training is important. Are all the appropriate audiences being covered? Is the training up to date? Is a refresher required? Regular audits of training curriculums and plans are key to reducing the risk of questionable payments, and could spare the company expensive costs down the road.

Have a great weekend!

Compliance News in Review, July 2, 2015

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A former medical device CEO is sentence to two years in prison, the House of Representatives moves on the exemption of payments for CME, textbooks and medical literature under Sunshine, a Connecticut APRN finds herself in hot water over kickbacks, and the first full year of physician payments data is officially available for review.

Unfurl the flag and fire up the grill! It’s time to celebrate the good ole U.S.A. Independence Day is almost here! Whether your celebration of the shot heard ‘round the world and 239 years of the great experiment take you to the shining sea, across the fruited plain, or just to your backyard, we hope it’s a safe and joyous weekend. Until the party begins, we’ll dole out a little history less of our own, with this edition of the Compliance News in Review.

Former OtisMed CEO will have his liberty temporarily revoked. The executive was sentenced to two years in prison for intentionally distributing an unapproved medical device in violation of the FDCA. He was also order to pay a $75,000 fine.

The “people’s house” has been busy recently. The House Energy and Commerce Committee announced that over 200 representatives have signed on to the 21st Century Cures Act. The exemption of payments for CME, textbooks and medical literature from the Sunshine Act is included in the bill. The House also approved a bill to repeal the Affordable Care Act’s tax on medical device manufacturers. The bill now moves to the Senate for a vote.

A Connecticut APRN has admitted to accepting $83,000 in kickbacks from the drug maker Insys Therapeutic. The nurse was a top prescriber of the company’s cancer pain drug. Most of the kickbacks were in the form of payments for serving as a speaker and according to prosecutors, more often than not, the nurse and the sales rep were the only people in attendance at the speaker events. On some occasions, the attendees were friends or colleagues of the nurse who were allowed to prescribe drugs. She will be sentenced in September.

We’re waiting for the fireworks to start now that the first full year of physician payments data has been released by CMS. The payments for 2014 totaled nearly $6.5 billion, and represented 11.4 million transactions to over 600,000 physicians and teaching hospitals. Data from the 2013 program year that could not be posted during 2014 is also included in this year’s release. According to a CMS press release, “registered physicians and teaching hospitals reviewed nearly 30% of the total value of the data and the agency plans on continuing its efforts to work with HCPs to increase that review rate.”

While it’s the multi-million dollar corporate settlements that make the headlines, this week’s news shows that in the world of compliance, individuals suffer significant consequences as well. From the Board to the C-suite, across the corporation and even to the contractors, training needs to emphasize that potential violations are not just a “company problem.”

The release of the 2014 Open Payments data highlights the amount of money being spent by industry on physicians, and exposes physicians to potential criticism and scrutiny. HCPs need to be aware of the rules and regulations companies face because as far as the government is concerned, they represent the company just as the employees do. Providing training that respects these contractors as men and women of science, while fully covering product promotion regulations and law, not only protects the company, it enhances the relationship with these valued partners in healthcare as well.

Have a great Independence Day everyone!

Compliance News in Review, June 29, 2015

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The universe has spoken – summer is officially here. (If you’re living in a part of the country that is in the midst of a heatwave, I’m sure you’re thinking “never mind what the calendar says, summer has been here for two weeks!”) Now that we’ve crossed the solstice for another year, let’s take a look back at how spring ended, in this issue of the Compliance News in Review.

PetroTiger escaped the heat of an FCPA prosecution. In a highly unusual move, the DOJ announced it would not charge the oil company with violating the FCPA. Three company executives have already pled guilty to the same charges, and typically charges against the company follow. In this case, the DOJ decided otherwise, saying PetroTiger had fully cooperated with the investigation.

The Sunshine Act is never far from the minds of physicians, no matter the season. 100 physician organizations sent a letter to Representatives Richard Michael Burgess and Peter DeFazio expressing support for a bill that would exempt payments for CME and educational materials from the Sunshine Act. The Representatives introduced the bill in an effort to correct the “unintended consequence of over-burdensome reporting requirements that made access to educational materials for physicians difficult to obtain.” The physician groups claim that the dissemination of medical education materials has already slowed as a result of the law.

The sun has set on an off-label marketing case for a former Merck company. The company settled with the government for $5.9 million in an illegal marketing case involving its former Inspire Pharmaceuticals unit. According to prosecutors, Inspire claimed its pink eye drug was effective for treating blepharitis, a condition for which the drug was not approved. According to the government, the promotion of the drug for the off-label use led to false claims being paid by government healthcare programs. Merck claims the activity occurred before it acquired the company. Inspire was sold to Akorn in 2013.

FDA officials shed some light on advertising and promotion enforcement at the 2015 Develop Innovate Advance conference. Deborah Wolf of the Division of Premarketing and Labeling Compliance discussed several promotional issues surrounding devices, including the risk of physicians promoting devices for unapproved uses.

Tom Abrams of the Office of Prescription Drug Promotion said the most common areas of enforcement for his office involved unsubstantiated superiority claims; overstatement of efficacy; and omission and minimization of risk information. Lisa Stockbridge of the CEBR’s Advertising and Labeling branch said that biologics faced many of the same issues as prescription drugs. She referenced an untitled letter sent to a company for claims made by the company’s CEO in a video interview posted on the company website, which included unsubstantiated claims about one of its products.

Obviously, product promotion remains a hot topic, and with good reason. As we continue to see in the news, off-label promotion violates the FDCA and implicates the False Claims Act, and can result in pretty hefty penalties. However, training needs to go beyond on-label promotion, and cover the topics referenced in the stories above. Misleading statements, false efficacy claims, and omission of risk lead to untitled letters from the FDA, and as seen in the 2014 Shire case, can be used by the DOJ in cases against manufacturers.

All facets of promotional speech need to be covered in your compliance training, especially since the FDA has essentially deputized healthcare professionals to be on the lookout for promotional speech missteps through their Bad Ad program. More and more eyes are focused on product promotion, so making sure everyone responsible for making promotional statements, in any form, is aware of the requirements, is more critical than ever.

That’s the news for this edition. Stay cool and have a great week everyone!