U.S. state and federal disclosure laws and the trend towards global transparency have created a need for life sciences companies to track and report on more expenditures to health care practitioners than ever before. The Patient Protection and Affordable Care Act’s (PPACA) Section 6002, often referred to as “The Physician Payments Sunshine Provisions,” will take effect for payments in 2012, adding a layer of complexity to the reporting that is already required in the U.S. And global issues, including anti-bribery laws such as the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, are also becoming increasingly important. The regulatory landscape seems to be constantly changing, and managing the process is becoming increasingly complex and time consuming.

In a recent survey of the industry, we found that, of those still using spreadsheets and manual processes to track and report on their expenses in 2011, most plan to move to an automated solution as more requirements are implemented. This will be a critical step for many companies to manage the vast amounts of data necessary for reporting. While the industry still also reports having significant data challenges within the aggregate spend and disclosure reporting process, there seems to be an increased emphasis on having complete, accurate data: compared with 2010, more respondents say that they have implemented a customer master.

As the compliance burden grows, companies need to adopt a holistic approach to tracking and reporting—an approach that includes a focus on high quality healthcare practitioner and organization reference data to ensure accurate reporting and disclosure. This approach needs not only to encompass all internal departments, third parties, and systems in the U.S., but also to take into account global affiliates, so that the entire company is aware of disclosure and transparency initiatives. In addition, global issues and regulations will play a greater role in how companies handle their compliance across the world. While many regions are taking the lead from their U.S. offices right now, the future may see compliance departments coming together globally to follow a more consistent plan for all company expenditure tracking.

Adding to this pressure is that the Federal government (under PPACA) will publicly post details of manufacturer-practitioner financial interactions on the internet. Companies need to start preparing now for how they will manage relationships with their customers, the media, patient associations, and special interest groups once this occurs. Healthcare practitioners and organizations should not be viewed as just recipients. They must be involved in the process. For example, they should be given the ability to review transactions for accuracy on an ongoing basis. And PR departments should reinforce the benefits of legitimate interactions between the industry and their customers to increase the public’s acceptance of such spending.

As companies become more confident in their ability to meet aggregate spend reporting and disclosure requirements, they should expand processes and solutions to include more proactive compliance controls prior to a spend transaction occurring, which will enhance overall internal transparency and compliance levels.

  • Bill Buzzeo

    Bill Buzzeo is an authority on regulatory requirements facing today's pharmaceutical industry, specifically those involving the Prescription Drug Marketing Act (PDMA); international, federal, and state transparency and reporting requirements; and the Controlled Substances Act (CSA).

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