Asia-Pacific Transparency Reporting Requirements: Are You Ready to Submit Your Report?

10.16.17 | By Lisa van de Kamp

Recently, the Asia-Pacific region has been a hotbed for new anti-corruption and transparency regulations. As we reported in March and early August, South Korea is the latest country in the region to enact its own transparency regulations: the Pharmaceutical Affairs Act and Medical Devices Act. The passage of these laws, along with similar laws and industry codes in The Philippines1, Indonesia2, Japan3 and Australia4, confirms that the global regulatory trend is rapidly spreading across the region. It also strengthens the connection between transparency and anti-corruption efforts as better access to rich data sets assists in corruption investigations, making it easier to relate “bad actors” to multiple manufacturers. It is imperative that Life Sciences manufacturers familiarize themselves with this evolution and assess their readiness to implement consistent governance and control activities.

South Korea

The South Korean Pharmaceutical Affairs Act Article 47-2 and Medical Devices Act Article 13-2 became law in June 2017, and companies will be required to collect and maintain expenditure reporting beginning in 2018. Similar to other transparency requirements, the Korean laws require pharmaceutical and medical device companies that operate in South Korea to report certain benefits provided to healthcare professionals (HCPs) as well as persons employed at medical institutions during a given fiscal year.

However, the Korean laws are much broader in scope than comparable laws in other countries with respect to the types of the covered recipients and the reportable economic benefit.

The covered recipients can be categorized into five groups:

  1. (1) Pharmacists
  2. (2) Traditional Korean medicine pharmacists (including persons working for the relevant pharmacy)
  3. (3) “Medical personnel”, which includes physicians, dentists, acupuncturists, midwives, nurses
  4. (4)  Medical institution founders
  5. (5) Employees of the relevant medical institutions.

The reportable economic benefits include:

  1. (1) Academic conference sponsorships
  2. (2) Honorarium provided to a covered recipient for conducting post-marketing surveillance
  3. (3) Funding of clinical trials
  4. (4) Transfers of value provided at product presentations such as food and beverages, travel, lodging and giveaways
  5. (5) Samples
  6. (6) Price discounts.

Because HCPs in Asia frequently dispense drugs in addition to prescribing them, the Korean laws require companies to report price discounts and samples given to doctors in order to provide a more comprehensive view into the benefits that HCPs receive from companies.

While the laws were passed less than a year ago, they have been the subject of much discussion and have already seen some changes. The reporting mechanism has been a focus as formal reporting to a central website is not required and the reports will not be disclosed to the public. Companies must, however, prepare the reports within three months after the end of the fiscal year and have them readily available upon request. Concrete changes to the laws included an obligation for companies to provide a report of the benefits an HCP received from the company at the HCP’s request. While this could be a significant burden on a company’s resources, it could be alleviated with a solution that automates the process.

For more details on the Korean “Sunshine Act” , please see blog posts from March and early August.

Philippines

Like South Korea, the Philippines’ transparency law, Administrative Order N.2015—0053, is also applicable to both pharmaceutical and medical device companies, and has been in effect since February 2017.

Under the law, companies are required to file two types of reports:

  1. (1) Notice of Meetings
  2. (2) Post Travel.

The Notice of Meetings is a pre-activity report containing information on the Meeting (or Symposia) and associated sponsorship. The information in the report includes activity dates, venue information and sponsorship details (i.e. budget per person per day, accommodation details, meal information, transportation provided and sponsorship criteria). The Notice of Meetings must be filed with the government 30 days prior to the event, and is only required if more than 100 HCPs will be attending the event. These Notice of Meetings reports are notable as the Food and Drug Administration Philippines (FDA) has stated that they may conduct unannounced monitoring visits to a meeting based on the Notice of Meetings report.

The Post Travel report must be filed after the event and must include the following information:

  1. (1) Event date(s)
  2. (2) Venue name
  3. (3) Event objectives
  4. (4) HCP travel funding recipient name, office, position, association and contact information,
  5. (5) Other items that recipient HCPs commit to provide in exchange for the travel funding (e.g. recipient HCP provides a summary of the event key learnings).

It is important to note that while companies are not required to report the monetary value of the sponsorships provided to HCPs attending congresses, they do require to report the recipient’s names. This report as well as the Notice of Meetings report are only made available to the FDA and no public access is provided to this data as of yet.

While the Philippine law may have fewer reportable spend requirements, it presents its own unique administrative challenges as companies must manually enter all data into forms on the FDA’s website. The Pharmaceutical & Healthcare Association of the Philippines (PHAP) and the FDA are currently discussing alternatives to alleviate some of the burden.

Some potential solutions include:

  1. (1) Companies submit the FDA’s report via email
  2. (2) Companies submit the FDA’s report via post
  3. (3) Companies upload the FDA’s report onto the FDA’s website.

Discussions remain ongoing for a preferred solution.

Indonesia

The Indonesian law, ‘Sponsorship for Healthcare Professional: Regulation 58’, has the widest reach as it applies to pharmaceutical, medical device and generics companies. Effective in November 2016, companies must report on sponsorships and any other form of assistance and/or activities provided to both HCPs and HCOs. Examples of such assistance and activities include: events where HCPs participate as attendees, speakers and moderators and support provided to HCOs for organizing seminars, scientific or educational meetings and trainings.

The Indonesian law creates significant compliance challenges stemming from the tight reporting deadlines. Specifically, companies must disclose reportable spend within 30 days after the HCP/O receives the sponsorship or support. This short turnaround time necessitates efficient and robust internal processes, such as an automated solution, to comply with the reporting requirements in a complete and timely manner.

Australia

Compared to the countries previously mentioned, the transparency code in Australia hase been effective for a longer period of time. In 2015 Medicines Australia, the association for pharmaceutical manufacturers in Australia, created the Medicines Australia Code of Conduct, which requires its members to disclose spend provided to:

  1. (1) HCPs that are registered to practice in Australia
  2. (2) HCOs that are not-for-profit organizations.

The Code requires companies to create three reports:

  1. (1) Payments to HCPs reports
  2. (2) Healthcare Consumer Organization (“HCO”) Support reports
  3. (3) Third Party Meeting Sponsorship reports (i.e. a company provided funding to an event organized by a third party and attended by HCPs).

Companies must file the HCO Support report before April 30th each year, disclosing the entire previous year.

The HCP report and Third-Party Meeting Sponsorship report must be filed twice each year:

  1. (1) In February for events that took place between the prior May and October
  2. (2) In August for events that took place between the prior November and April.

The Code requires companies to notify the HCP before receiving a reportable payment of the reporting obligation for spend on the HCP report. In addition, the HCPs must have at least six weeks to review and dispute the reports prior to its final disclosure. This creates an administrative challenge and necessitates companies to have efficient processes in place.

Japan

Japan’s transparency reporting is the most mature in the region as the Japan Pharmaceutical Manufacturers Association (JPMA) and the Japan Federation of Medical Devices Association (JFMDA) adopted the Transparency Guideline for the Relation between Corporate Activities and Medical Institutions and the Transparency Guidelines for the Medical Device Industry and its Relationships with Medical Institutions and Other Organizations in 2012, respectively.

The Transparency Guidelines requires both JPMA and JFMDA member companies to disclose data on HCP and HCO spend. More specifically, the Transparency Guidelines require reportable spend related to:

  1. (1) Research and development
  2. (2) Donations
  3. (3) Fee for service activities
  4. (4) Congresses
  5. (5) Hospitality and social

Japan requires consent to be collected for reportable spend related to the first three reports. These reports must be filed once a year after the end of the fiscal period. The consent requirement may require enhanced internal processes since consent needs to be collected, stored and linked to report output prior to the disclosure timelines.

More recently, there have been developments in regulations on the Clinical Research side where in April this year the ‘Act on Clinical Studies’ was published. The act will be in effect within one year from it publication date. Currently, the industry is awaiting an implementing order and regulation details from the government to start getting ready for these new disclosure requirements. More to come on this.

The differing transparency requirements in the Asia Pacific region can create significant challenges for companies when operating across multiple countries. Differences are found in the:

  1. (1) Application of the regulation
  2. (2) Reportable activities and economic benefits to be reported
  3. (3) Covered recipients
  4. (4) Consent requirements
  5. (5) HCP review prior to disclosure provision
  6. (6) Report formats
  7. (7) Public or government-only

With respect to applicability, all country laws apply to both pharmaceutical and medical device companies, with the exception of the Australian Code that only applies to pharmaceutical companies.

The scope of reportable economic benefits and covered recipients contrasts across the region. Where Korea seems to cover a very broad spectrum on both categories, the Philippines covers mainly congresses and meetings with HCPs. A broader scope on both reportable benefits and covered recipients increases the burden for an organization for collecting the relevant data for reporting.

There are also significant differences with respect to HCP consent and allowing HCPs to review and dispute spend prior to disclosure. Under the Australian law an HCP’s acceptance of payment is a de facto consent for disclosure whereas the Japanese law requires companies to obtain explicit consent from recipients. Australia’s approach is more streamlined, however both require an organization to have processes in place to address the needs to inform and collect consent information in a timely fashion. Furthermore, Korea and Australia have obligations to provide the HCPs the detailed information on Transfer of Values they received prior to disclosure, whereas other countries do not have explicit requirements to do so. In short, an organization needs to have enhanced processes to provide the spend information to the HCPs as well as address any disputes in a timely manner prior to reporting.

The reports themselves also differ across the region. Where most countries will require actual spend as part of the report, the Philippines only requires information on the HCPs but not actual transfers of value amounts on the report. Finally, a significant difference between the more recent regulations and the more established ones is that there is no public disclosure of the reports. In South Korea, the Philippines and Indonesia the reports are only submitted to the governing bodies for auditing purposes and will therefore not be available to the public. In Japan and Australia where there is public disclosure of the transfers of value the information is open to public and competitor scrutiny. When this information is in the public domain, one could expect competitors to use this for analytics and leverage this information to create KOL influence maps to assess their market position. Public data can therefore provide companies with the opportunity to collect market or compliance intelligence when analyzing the available data.

Given this great variety among the laws and codes, it is important to understand how the reporting requirements differ for those that apply to your organization and to find the common denominator in order to collect the appropriate data across business units and countries. This will also allow companies to:

  1. (1) Perform the correct validation of HCP and HCO spend transactions for reporting
  2. (2) Submit transparency reports correctly
  3. (3) Manage disputes and collect consent, where

While knowing what to do at the reporting stage is important to provide the correct reporting formats and details, obligations and compliant business practices start long before that. Challenges can be found in the daily operations prior to the reporting phase, such as inconsistent use of FMV rates, lack of attention to spend caps, multiple departments paying the same HCP, and incomplete or inaccurate date entry, to name a few.

Specific policies and SOPs, FMV methodology, and monitoring and auditing programs around HCP/O interactions and collecting payment details are essential to address some of these challenges. This can be a primary driver for more compliant business practices and can also ensure more accurate and complete data capture upfront leading to more accurate reporting. These compliance tools

however will significantly impact compliance resources as they can be quite time and labor intensive. Additionally, the reporting phase also requires attention as data needs to be reconciled from different resources, gaps in data capture need to be addressed and report validations must be performed.

Given these complex and varied obligations, the strain on compliance resources can be significant. Utilizing a technology solution to automate processes can help Life Sciences companies overcome these challenges. Automating the HCP/O engagement and reporting processes is advantageous for several reasons as it reduces inefficiencies by eliminating manual processes, addresses quality and consistency concerns, creates transparency across the organization, and adds a layer of checks across the enterprise.

For countries where transparency requirements have been in place for a longer period of time, going through several reporting cycles has enabled them to strengthen processes beyond the reporting processes. In Australia, for example, where reports are disclosed twice a year, pharmaceutical companies and doctors have already gone through multiple disclosure cycles. This has allowed companies to mature their processes for data collection, spend disputes and overall disclosure. It has also allowed doctors to understand the overall process better and the impact disclosure has in the public’s view of the industry.

In summary, the larger global trend toward more stringent regulations is clearly visible in Asia Pacific’s growing transparency regulations. Understanding the transparency regulations in the countries where your company operates is a significant step towards understanding its implications for the organization. Furthermore, achieving accurate and complete reports requires an organization not only to look at the “downstream” reporting process, but to assess “upstream” compliance needs and processes in order to mitigate the downstream challenges and limitations. In addition, companies will need to enable their organization to adapt their processes to new, evolving or updated transparency regulations.

Polaris has over 16 years of experience helping life sciences companies manage their compliance obligations in a practical and sustainable way. Our team of global consultants, combined with the leading technology for managing Global HCP Engagements and Transparency Reporting has made us the trusted compliance partner for Life Sciences companies. Our team continually monitors the shifting global compliance landscape so we can advise our clients and provide best in class technology solutions.

Polaris’ STAR (Spend Tracking Analytics and Reporting) solution was developed to help Life Sciences companies meet the ever-evolving challenges they face in adhering to global regulations. Polaris’ industry experts are currently adapting STAR to seamlessly create reports that adhere to South Korea’s new regulations as well as other new regulations as they are enacted.

For a full summary and key details of the regulations and codes and their respective content, Polaris’ Regulatory Monitoring Portal can be an invaluable tool as it captures all global transparency regulations and codes in detail. For more information about how our innovative technology and consulting solutions can make your compliance efforts effective and efficient, contact us.

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1 The Philippines Administrative Order N.2015—0053

2 Indonesia’s law: Sponsorship for Healthcare Professional: Regulation 58

3 Japan Pharmaceutical Manufacturers Association (JPMA) and the Japan Federation of Medical Devices Association (JFMDA) adopted the Transparency Guideline for the Relation between Corporate Activities and Medical Institutions and the Transparency Guidelines for the Medical Device Industry and its Relationships with Medical Institutions and Other Organizations, respectively.

4 Australia’s code: Medicines Australia Code of Conduct