Transparency-reporting trends in Europe

November 11, 2015
Pharmaceutical Commerce, Pharmaceutical Commerce - November/December 2015,

'European companies will not be able to follow the exact path to operational compliance as their US counterparts,' says IMS Health survey

Fig. 1. Getting past European privacy rules for HCP consent is the biggest challenge to transparency rules. Credit: IMS Health

In the US

, with the passage and implementation of the Physicians Sunshine Act, most activities involving reported aggregated spending by industry on healthcare professionals (HCPs) has settled down to a routine process: CMS has made two reports so far, and companies now have systems in place to file their reports at the end of each year.

In Europe, a similar path has been followed, but the biggest part of the formal reporting process is set only to begin in 2016, with the voluntary implementation of transparency guidelines by the European Federation of Pharmaceutical Industries and Association’s (EFPIA) Disclosure Code. That covers 35 nations in the region; however, parallel reporting rules, and rules adopted by other organizations (such as the European Assn. of Medical Technology) complicate matters—there are differing elements to the national rules.

That situation is not completely different from the US’, where some states have their own requirements on top of CMS. But a major difference is creating added complexity: “Today, if an HCP does not provide consent to a company regarding a certain expenditure, the company may display the data at an aggregate level — anonymizing the respective HCP,” notes IMS Health, which has just completed an industry survey on the topic. “This phenomenon is unique to Europe; there is no such requirement to gather consent in other, even more stringently regulated regions, such as the US through the Sunshine Act.”

Halfway there

In its survey (whose respondents are said to represent a comprehensive cross-section of the industry), IMS found:

  • Companies are taking different approaches to their compliance strategies. Half (51%) are developing and implementing global transparency standards, while one quarter (24%) are managing each country independently. Another quarter (23%) are developing and implementing regional transparency standards.
  • When it comes to companies’ progress regarding compliance with current European transparency requirements, 46% are in the process of implementing a transparency solution. Only one-third (35%) have made it to the stage where they are successfully complying with transparency requirements.
  • In response to how they handle the management and reporting of transparency requirements, respondents were evenly divided; four out of ten (39%) use a combination of in-house and third-party solutions, while another four out of ten (39%) leverage internal software systems.

Fig. 2. Response to the question, ‘Over the next year, how do you anticipate your investments (solutions and resources) in aggregate spend transparency to change?’

Compliance challenges

The No. 1 problem in compliance, say respondents, is dealing with the privacy-protection customs in Europe, whereby HCPs cannot be obligated to consent to regulatory reporting. When this happens, the life science companies are obliged to aggregate the overall spending, which can limit the utility of the overall transparency initiatives. IMS Health conjectures that “European authorities may then be more likely to introduce new laws to force a higher standard of transparency by requiring data to be published at the individual level”—but that, in turn, depends on countries’ and the public’s willingness to curtail privacy protections for HCPs.

Other aspects of the compliance challenge are operational: how to manage the collection and analysis of data; whether or not to outsource these tasks; and keeping up with the diversity of reporting requirements. (IMS Health, like some other data providers serving the life sciences industry, provides tools and resources for these functions.) According to the survey, 39% of companies are relying on internal resources only, such as ERP and accounting systems; another portion (12%) aren’t even automating the process, relying instead on manual spreadsheets. “Over one in ten—a fortunately small minority—are entrenched in legacy thinking, and believe that they can meet the rising tide of transparency by enhancing their manual spreadsheet reporting methods,” sniffs IMS, while noting that even at this early stage in compliance reporting, respondents are feeling overwhelmed at the task.

A secondary issue—and one that occupies a lot of compliance effort in the US as well—is maintaining master data-management (MDM) systems and databases to track the locations and affiliations of HCPs. As noted, 51% of respondents are implementing a “global” MDM system, which implies unified reporting in the US, Europe and elsewhere (transparency rules are coming into play in Japan and Australia as well as Europe). Companies’ investment in MDM technology is being driven by compliance, but MDM is being looked on as providing significant value for managing overall marketing and HCP-interaction functions, leaving at least a window open to deriving business value from the investment.

And about that investment: the vibe from the IMS report is that many pharma companies in Europe still haven’t taken full grasp of the implications of the transparency rules. The respondents are neatly split (45-47%) between investing in transparency-compliance solutions and resources—and 8% even expect it to decline (Fig. 2). “Participants that cited decreased or sustained budgets fall into one of the following two categories: 1) those who have already made significant investments, are well situated for current compliance obligations, and will only need to sustain or lower future investments; or 2) those who are unrealistically optimistic about their internal abilities to achieve compliance,” concludes IMS Health.