The continuous evolution in the global compliance and transparency regulatory landscape requires compliance professionals to be informed and well-versed in the impact of these changes. Recently, the Asia-Pacific region in particular has been a hotbed for new anti-corruption and transparency regulations as of late, such as the ongoing reforms to China’s Anti-Corruption Law¹, and South Korea’s Pharmaceutical Affairs Act and Medical Devices Act². These regulatory developments, compounded by the volume and frequency of interactions with healthcare professionals (HCPs), highlights the need for Life Sciences companies to monitor, reassess and mitigate anti-bribery and anti-corruption (ABAC) risks.
Additionally, over the past decade market forces and other industry trends – including longer distribution channels and more complex fee-for-service arrangements with customers – have increased compliance risks and incidences of corruption. In the Asia-Pacific region, the most common inappropriate transfers of value include: distributor commission payments to HCPs and/or government officials; vendor and manufacturer in-kind payments to HCPs (e.g. travel, hospitality, gifts, entertainment); and sham events organized by vendor travel agencies.
In this atmosphere of heightened regulatory scrutiny and simultaneous increased corruption risk, Life Sciences companies are seeking strategies to decrease their risk profile and create sustainable and efficient processes for interacting with the healthcare community. Harmonizing the HCP engagement and contracting process is a strategic tool to reduce risk, bolster the maturity of the compliance program and create efficiencies.
The essential elements of the HCP engagement and contracting process include: (1) annual planning and needs assessment, (2) activity planning and business rationale, (3) HCP selection, (4) Fair Market Value (FMV) assessment, (5) contracting, and (6) activity and spend validation. Each element should also have clear and structured guidelines that address process challenges, such as configuring multiple systems and capturing data required by various global transparency reporting requirements. These complexities, accompanied by the increase in transparency requirements, enhances the need to establish clear upstream and downstream control mechanisms that also allow for efficient monitoring and auditing. Such control mechanisms will ensure that questions such as those below are answered in the affirmative:
- Is there a clear business or program objective at the program inception? Does it meet the organization’s annual plan objective and guidelines?
- Does the selected HCP meet the selection criteria for this activity?
- Does the remuneration for the HCP reflect Fair Market Value?
- Has the HCP received all required approvals?
- Is there a contract in place before the HCP provides the service? Has the contract been stored in a central repository?
- Have the outcomes and key activity results been captured and stored in a central repository?
- Has there been proper validation that the services were in fact provided prior to payment?
However, we also do not want to over-engineer the process and slow down our business partners. After all, as compliance professionals our job is to balance commercial strategy and corporate values alongside regulatory obligations. For this reason, utilizing a technology solution to automate the above control mechanisms helps Life Sciences companies to achieve such balance. It is also advantageous for the following reasons: (1) reduces inefficiencies by eliminating manual processes, (2) addresses quality and consistency concerns, (3) creates transparency, and (4) adds a layer of checks across the enterprise. For example, after the requisite activity information has been completed, the request is automatically routed to all approvers along the established approval process. Additionally, cross-border engagements where HCPs from multiple countries are involved also benefit from a technology solution. These engagements are challenging as the requisite information is often scattered across multiple businesses and countries. However, a technology solution addresses some of the challenges as HCPs’ data can be accessed through a shared platform, the activity can be routed for necessary approvals across borders, and FMV rates can be easily retrieved.
An automated technology solution creates other positive externalities such as capturing, storing and maintaining data in a central location. This allows for the swift creation of commercial and compliance data analytics. Compliance can use the data to perform monitoring and auditing activities more efficiently and commercial, on the other hand, can leverage the data to provide business insights and improve decision making.
In summary, harmonizing and utilizing a technology solution to automate the HCP engagement process is an important tool to mature the compliance organization and mitigate kick-back and corruption risks. Finding the right balance of improving process efficiencies as well as maintaining the appropriate controls points is crucial, but can prove challenging. Utilizing technology to automate the HCP engagements process can enable an organization to find that balance, as it allows the organization to improve decision making, mitigate risk, reduce costs, increase efficiency, and unlock the value of the centralized data.
For more information, visit here to learn about Polaris’ Healthcare Provider Interaction Portal (HIP) and all of our compliance solutions. Discover how Polaris can help you effectively and efficiently manage the entire HCP engagement lifecycle. Contact us directly at firstname.lastname@example.org.
¹ See Healthcare Reform – Chinese style by Amy Greenstein and Dana Liu; Life Science Compliance Update, Volume 3.4, April 2017
²See Asia-Pacific Update: South Korea the latest country to enact transparency legislation by Jennifer Bang; 29 march 2017; http://polarismanagement.com/asia-pacific-update-south-korea-latest-country-enact-transparency-legislation/
³ The other three risk governance competencies are Policies, Processes and People & Organization.