the national disclosure summit washington dc … · case study: planning aggregate spend activities...
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Case Study: Planning Aggregate Spend Activities for the Next Three Years
The National Disclosure Summit Washington DC March 6, 2009
Cynthia “Cindy” Cetani Jon Wilkenfeld
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DRAFT
Introductions
Cynthia “Cindy” Cetani*
Executive Director
Novartis Pharmaceuticals Corp.
(862) 778-3949
Jon Wilkenfeld
President
Potomac River [email protected]
(610) 470-7616 (M)
*Disclaimer: The views of the Novartis presenter reflect a personal perspective and should not be considered an endorsement by or specific views of Novartis Pharmaceuticals Corporation
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ARS: Aggregate Spend Status
Where are you within the lifecycle of building an aggregate spend solution regarding physician spend?
1. Fully implemented for HCP spend2. Partially automated and partially manual for HCP spend3. Building a solution now; spend capture is manual by state4. We are in early planning stages5. We haven’t started planning or building yet
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6. Change Management
Today: The Basics of an Aggregate Spend System
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What do you believe will follow the Sunshine Act?
1. States will be satisfied with the data reported at the federal level and will not request additional information. The federal government will take no additional action.
2. States will be satisfied with the data reported at the federal level but the federal government will require additional disclosures.
3. States will not be satisfied with the data reported at the federal level and will continue to proliferate new reporting requirements.
4. Don’t know
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DRAFT
US Regulatory Environment
Current and Future Regulatory Environment
♦Physician Payment Sunshine Act
♦Additional congressional action• Grant transparency• Samples
♦Changes to existing state laws
♦New state laws
♦Mid-level prescribers and other HCPs
♦Specific requirements from CIAs, consent decrees
How will the changing regulatory impact your rules engine?
♦Definition of HCP
♦HCP degree/specialty
♦Purpose/nature of spend
♦Meal allocation methodologies
♦Medicare billing / State Licensing #s
♦Other?
MAINE
IOWA
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DRAFT
Q . Do you currently have the capability to link individual HCPs to organizations?
1. Yes, we can link HCPs to affiliated organizations (e.g. medical practices, hospitals, universities, societies) within our aggregate spend system
2. No, we cannot link HCPs to affiliated organizations within our aggregate spend system
3. We are currently working on implementing the capability to link HCPs to their affiliated organization
4. Don’t know
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DRAFT
Future: Customer Master With Relationship Data
•What relationship aspects will be included within your data?•Will you be able to automatically toggle between individuals and DBAs? •Will you be able to automate identification of Government Employees? •Will you be able to identify all members of a medical practice? All members of an association (e.g. Wisconsin Medical Society)? Those employed by Stanford?
Questions to Consider:
ID Name Degree Specialty Address
1234 Jane Smith
MD Cardio 123 Main St.
New York, NY 10001
1235 John Jones
DO Onc 1600 Penn Ave.
Washington DC 20001
2008 Customer Master: 2D
HCP Smith
MedicalPractice
Managed Care Plans
Peer HCPs
StaffAddress(es)
Degree/Specialty
Association Memberships
Hospital Affiliation
2012 Customer Master: 3D
D/B/A Corp.
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DRAFT
ARS: Spend Capture on HCOs
What is the status of your aggregate spend solution for HCOs?
1. Fully automated for HCO spend2. Partially automated and partially manual for HCO spend3. Building an automated solution; spend capture is manual4. We are working on our plan now5. We don’t intend to capture any HCO spend
HCOs include: hospitals, clinics, medical practices, universities, pharmacies, professional associations (American Med Assoc) and medical societies (American Cancer Society)
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Challenges with Healthcare Organization (HCO) Spend
♦How will the changing regulatory environment impact HCO spend capture?
♦How do you define HCO?
♦State law disclosure reports include the following: • Hospitals, clinics, universities, pharmacies, medical groups, disease-specific patient advocacy / support groups
♦Challenges with building your HCO Customer Master• Establishing consolidation rules (local vs. national orgs; corporate parent structure)• Two-dimensional vs. Three-dimensional data
♦Data capture requirements• Payable to vs. recipient for grants• Convention / health fair spend capture
♦Data integrity challenges unique to HCOs?• False positive (e.g., NAIC Codes are too broad)• Less effective, costlier scrubbing processes• Incomplete third-party data
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DRAFT
ARS: Data Integrity
What actions are you taking to ensure accurate data? 1. Full-time “Data Steward” responsible for data integrity2. We periodically audit/monitor data3. Manual checks by Aggregate Spend owner (e.g. Compliance)
that focuses primarily on data outliers4. We rely exclusively on data accuracy within the source systems
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♦Can your data pass the sniff test?
♦Will it hold up to intense scrutiny?• Media • Individual physicians • Associations • Plaintiffs Bar
♦What are the sources of data errors?• False matching/merging records• Incomplete internal data entry • Inaccurate third-party submissions
♦What are you going to do about it?• Enhanced manual auditing and monitoring of data• Enhanced IT validation (e.g., drop-downs)• Monitoring data outliers or all data?
♦Do you have validation timing concerns?
♦Can you track data changes? Can you see changes over time?
Data Monitoring: Garbage In – Garbage Out
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DRAFT
Q . Does your data certification process lead to corrections in source system data or manual adjustments to your reports?
1. Yes, corrections to data are identified and corrected in source systems prior to final certification sign-off
2. Yes, corrections are identified during certification sign-off and addressed via manual adjustments to reports that are filed
3. Both 1 and 2, depending upon the system
4. We have never identified a necessary correction
5. Don’t know
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DRAFT
Data Certification
♦What is the ideal format and structure for certifications by C-level or Board?
♦What is the ideal format and structure for sub-certification (e.g. Head of Medical Affairs)?
♦How frequently will certifiers get data?
♦How do you measure data quality? What is an acceptable error rate?
♦What is the impact of unintended disclosures?
♦ Impact of manually removing entries from Aggregate Spend solution?
♦Have you developed a procedure stating how and when you would re-file a submission?
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ARS: HCP Impact
In your humble opinion, which do you believe will be the biggest impact of PPSA on HCPs?
1. Some HCPs may limit their industry compensation for concern over disclosure
2. HCPs may refuse to accept value (e.g. a meal) while still attending an event
3. Attendance at promotional programs will decline 4. HCPs will demand to see copies of their disclosures prior to
publishing on the web5. No impact– HCPs will continue to interact with pharma
companies exactly as before
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DRAFT
HCP Impact
♦How do you think HCPs will respond to disclosure?• Fewer speaker events per speaker• Will you need to track promotional attendees with and without meals consumed
♦What role will your company need to play?• Preemptive reports to all HCPs• Proactive communications/training on PPSA to HCPs• Responding to inquiries (methodologies, interpretations, errors?)
• Public relations responses
♦Will HCP response impact representative performance metrics?
♦Will you be in a position to point out emerging data patterns to senior management?
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ARS: Business Impact from Aggregate Spend
How does your company “use” aggregate spend data?1. We haven’t built our system yet2. Use it only for state law reporting and monitoring3. State laws + Compliance uses it for various monitoring activities 4. Compliance + Operations Groups (Sales Ops, Sourcing) look at
cost figures5. Compliance + Ops + the rest of the organization including
Business Analysis, Market Research, Brand Teams, and/or Senior Management
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DRAFT
Business Value from Aggregate Spend
Compliance Monitoring
♦Modest meals
♦Minimum attendance
♦ Fair market value
♦ “Occasional” or similar quantity language
♦Promotional $ cap
♦Other outliers?
Cost Containment
♦Speaker payments for cancelled programs
♦Unused minimum guarantees
♦Unapproved pass- through expenses
♦Spending on non- HCPs and non-targets
Top Line Growth
♦No ROI on payments!
♦But…can you use aggregate spend to optimize promotion?
♦Do some promotional programs have better results?
♦How can you leverage this data in an ethical manner?
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DRAFT
Q . Do you currently report on behalf of a merged company or an affiliated legal entity?
1. Yes, we manage reporting for our company and the company we merged with
2. Yes, we manage reporting for our company as well as other affiliated legal entities
3. Yes, we manage to both above
4. No, we report for our legal entity only
5. Other
6. Don’t know
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DRAFT
“Subsidiary” Reporting and Post-Merger Integration
♦
Have you started to capture spend for other US subsidiaries? • Animal? Consumer Health (i.e. OTC)? Generics? • Lessons learned?
♦
What IT challenges would you face in the event of a major acquisition for your firm? • Integration of Customer Master systems• Coordination of third-party vendor reporting standards• Potentially two different ERP systems (e.g. SAP and JD Edwards or Oracle)
♦
What change management would be required?• New business rules and supporting matrices• Training on new policies and data standards
PPSA Disclosure =
Any entity which is engaged in the production, preparation, marketing, or distribution of a covered drug, device, biological or medical supply
Undefined
+ Subsidiary /Entity Affiliated with Such EntityManufacturer
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DRAFT
ARS: Global Spend
Which payments are captured by your system? 1. Only US-Parent Corporation spend on US HCPs2. All payments to US HCPs (US and Global subsidiaries)3. All payments from US-Parent Corp (US and Non-US HCPs)4. #2 and #3 5. All spend (US and Global Subs) to all HCPs (US or Global)
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DRAFT
Global Spend
♦How do you leverage internal knowledge, resources, and IT systems?
♦Are you concerned about corporate separateness?
♦Are you confident that global spend doesn’t violate US law (e.g. FCPA)?
♦Will other regulatory bodies require global reporting? EU? EFPIA? Specific countries?
♦What is your approach to IT systems? • Portals or spreadsheets to capture payments? • Global Customer Master?
♦How do you implement change management around the world?
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DRAFT
Solution: Develop [Another?] Three-Year Plan
20112011
♦Initial PPSA report with corresponding disclaimers
♦Automated HCP affiliation identifications
♦Begin capturing global or subsidiary HCP spend
♦Global / subsidiary change management
♦Compliant revenue optimization
♦Initial PPSA report with corresponding disclaimers
♦Automated HCP affiliation identifications
♦Begin capturing global or subsidiary HCP spend
♦Global / subsidiary change management
♦Compliant revenue optimization
20102010
♦Begin including advanced hierarchies into customer master
♦Enhanced data audibility (storage of legacy data)
♦Data integrity: Avoidance of errors
♦Project plan for global and/or subsidiary spend
♦Cost management; Key opinion leader (KOL) management
♦Testing for PPSA reporting and other new requirements
♦Begin including advanced hierarchies into customer master
♦Enhanced data audibility (storage of legacy data)
♦Data integrity: Avoidance of errors
♦Project plan for global and/or subsidiary spend
♦Cost management; Key opinion leader (KOL) management
♦Testing for PPSA reporting and other new requirements
20092009
♦Finish building automated Aggregate Spend system (HCPs)♦Begin building HCO infrastructure ♦Data integrity: Outlier analysis♦Compliance monitoring♦Sub-certifications by management♦Communications to HCPs about PPSA
♦Finish building automated Aggregate Spend system (HCPs)♦Begin building HCO infrastructure ♦Data integrity: Outlier analysis♦Compliance monitoring♦Sub-certifications by management♦Communications to HCPs about PPSA
Illustrative
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Questions