MEASURING & MONITORING RISK USING ANALYTICS

Transcription

1 MEASURING & MONITORING RISK USING ANALYTICS APRIL 13, HURON CONSULTING GROUP INC.

2 PRESENTERS Brian Bohnenkamp Partner King & Spalding Jack Tanselle Managing Director Huron Consulting Group Jeff Fisher Director Huron Consulting Group HURON CONSULTING GROUP INC.

3 TABLE OF CONTENTS 1 CURRENT LANDSCAPE 4 2 ASSESSING RISKS; DRIVING MONITORING PLANS 13 3 EVOLUTION OF COMPLIANCE ANALYTICS AND CASE STUDIES 19 4 ROADMAP FOR ESTABLISHING AGILE ANALYTIC CAPABILITIES HURON CONSULTING GROUP INC.

4 1 CURRENT LANDSCAPE HURON CONSULTING GROUP INC.

5 RECENT LIFE SCIENCES SETTLEMENTS Company Settlement Year Alleged Conduct Sanofi Pasteur ~$20 million 2017 Pricing Orthofix ~6 million 2017 FCPA Violations Advanced BioHealing $350 million 2017 Kickbacks Teva $519 million 2016 FCPA Violations Forest $38 million 2016 Kickbacks Biocompatibles $36 million 2016 Misbranding Mylan $465 million 2016 Pricing Novartis $16 million 2016 Off-Label Promotion Acclarent $18 million 2016 Off-Label Promotion Valeant/Salix $54 million 2016 Kickbacks Genentech/OSI Pharmaceuticals $67 million 2016 Misleading Statements Aegerion ~$40 million settlement reserve disclosed 2016 Off-Label Promotion Pfizer/Wyeth $784 million 2016 Pricing FCPA Violations Olympus $646 million 2016 Kickbacks Novartis $390 million 2015 Kickbacks Warner Chilcott $125 million 2015 Kickbacks Millennium Health $256 million 2015 Kickbacks Johnson & Johnson $25 million 2015 GMP Violations HURON CONSULTING GROUP INC.

6 Companies have spent a lot of time, effort, and resources to comply with PERSPECTIVE FROM THE OIG: GROWING EMPHASIS ON KICKBACKS open payments reporting requirements, and I would recommend that [they] capitalize on those investments. Mary Riordan, OIG Senior Counsel, from her Keynote Address at the 2015 Pharmaceutical Compliance Congress Ms. Riordan went on to challenge manufacturers: What types of financial relationships does your company have with prescribers, purchasers, or recommenders of your products? Are there legitimate business needs for those relationships? Are there processes and controls in place to make sure these relationships are lawful and don t run afoul of kickback statutes? HURON CONSULTING GROUP INC.

7 TRENDING RISK AREAS Speaker programs Meals Value-added services Consulting arrangements Equipment loans Grants and donations Arrangements with specialty pharmacies Arrangements with PBMs and payors Interactions with patients and patient advocacy groups Coupons and co-pay cards HURON CONSULTING GROUP INC.

8 GROWING NUMBER OF RELEVANT AUTHORITIES TO CONSIDER IN ASSESSING POTENTIAL RISKS Federal Anti-Kickback Statute FDA laws and regulations (e.g., advertising and promotion, clinical trials, adverse event, GMPs) False Claims Act Foreign Corrupt Practices Act Drug price reporting laws and regulations (e.g., Medicaid Best Price) Prescription Drug Marketing Act (samples) Executive Branch ethics laws (apply to interactions with VA and DoD) Open Payments/Sunshine Act State State kickback prohibitions and false claims acts State gift bans and compliance program laws State transparency laws State consumer protection laws and restrictions on unfair trade practices State government ethics laws and lobbying requirements/restrictions Other important non-legal authorities Industry codes of conduct (PhRMA Code, AdvaMed Code) Institutional conflicts of interest policies HURON CONSULTING GROUP INC.

9 BIG DATA ON THE SCENE... Gov t reliance on data analytics continues to increase Federal law enforcement encouraged to use data analytics prospectively to identify potential fraud and abuse Open Payments and Medicare Provider Utilization and Payment Data databases available for sophisticated analytics HURON CONSULTING GROUP INC.

10 ... FOR EVERYONE TO USE HURON CONSULTING GROUP INC.

11 EVOLVING EXPECTATIONS FOR COMPLIANCE PROGRAMS Federal enforcement authorities are increasingly focused on compliance program operational effectiveness. In November 2015, DOJ hired Hui Chen, the first ever DOJ Compliance Counsel, to provide guidance to prosecutors on compliance program effectiveness. In February 2017, DOJ published guidelines to evaluate corporate compliance programs HURON CONSULTING GROUP INC.

12 EVOLVING EXPECTATIONS FOR COMPLIANCE PROGRAMS Risk Assessment and Mitigation Process (RAMP) requirements have become boilerplate provisions in CIAs with HHS-OIG. In March 2017, OIG/HCCA published the Resource Guide for Measuring Compliance Program Effectiveness HURON CONSULTING GROUP INC.

13 2 ASSESSING RISKS; DRIVING MONITORING PLANS HURON CONSULTING GROUP INC.

14 RISK ASSESSMENT AND MITIGATION PROCESS ( RAMP ) A RAMP program is the backbone of a sustainable, effective compliance program, creating a repeating cycle of continuous improvement through risk mitigating activity. RISK ASSESSMENT (annual and ad hoc) Mitigation planning driven by risk assessment output Continuous Improvement* AUDITING & MONITORING Traditional audits For cause audits Live/field monitoring Records reviews Analytics monitoring *Continuous Improvement: Management responses Evolving policies and procedures Improved/increased training Improved/increased communications Business ownership of compliance Routine, integrated dialogue Mitigation output and external forces serve as risk assessment inputs External Forces: Hotline, Investigations, Changing Regulations, Market Conditions HURON CONSULTING GROUP INC.

15 RISK ASSESSMENT PROCESS Risk Activity Catalogue Assess Current Controls Risk Scoring (prioritize) Create A&M Plans Re-assess Refine Repeat Create a catalogue of all potential compliance risk activities Include risk categories as well as specific risk areas Assess controls related to each risk activity Meet with risk activity stakeholders to learn needs and concerns Use criteria that may include: current enforcement, current controls, levels of spending, frequency and volume of activity The risk ranking drives auditing and monitoring plans, including dashboards and reports needed Evaluate the progress of mitigation efforts Continue dialogue w/ stakeholders and assess for changes Repeat at least annually HURON CONSULTING GROUP INC.

16 RISK ACTIVITY CATALOGUE EXAMPLES HURON CONSULTING GROUP INC.

17 RISK SCORING MODELS EXAMPLE Area for Review Current Enforcement Activity Level of Spending Frequency of Activity Existing Controls Total Sales & Marketing Speaker Programs Third-Party Arrangements Consulting/Ad Boards Promotional Materials Gifts& Business Courtesies Time & Expense Reporting Minimum Minimal risk with strong corporate compliance controls 0 Medium Maximum Current or historical enforcement action with some compliance controls High risk due to current enforcement action and/or high levels of scrutiny outside the organization. Action (or inaction) may impact multiple areas within the organization HURON CONSULTING GROUP INC.

18 RISK ASSESSMENT: CRITICAL SUCCESS FACTORS Risk assessments, and the mitigation plans driven by the output from them, must be jointly developed and implemented in partnership with business leadership. Risk activities must be identified and scored on a relative scale for prioritization. Key Performance Indicators ( KPIs ) must be developed to continually measure the effectiveness of risk-mitigation actions. It can be challenging to prove the effectiveness of a compliance program, given the objective is often to try to prove a negative: the risk-mitigation actions must be working since the bad event hasn t occurred. The solution lies partly in a company s ability to develop meaningful KPIs that act as surrogates to predict the success or failure of your compliance initiatives HURON CONSULTING GROUP INC.

19 3 EVOLUTION OF COMPLIANCE ANALYTICS AND CASE STUDIES HURON CONSULTING GROUP INC.

20 OPPORTUNITY: USING ANALYTICS FOR DECISION MAKING Life Sciences companies are exploring how to best create an analytics platform that provides the following: Summary and detailed analysis of operational and financial data Algorithms to measure and visually display operational and compliance risk Proactive alerts that identify risk trends Analytic views that meet customized needs of individual business users Flexibility and scalability to meet needs as demands increase HURON CONSULTING GROUP INC.

21 BARRIERS: USING ANALYTICS FOR DECISION MAKING Implementing a compliance analytic and dashboard application presents significant challenges, including: Identifying source systems and data elements that have relevance to measure compliance Identifying measures that can display compliance risk Determining requirements and design for compliance management and dashboard application Incorporating best practices and industry current practices, as applicable, into the design Creating and maintaining required data mart and visualization application HURON CONSULTING GROUP INC.

22 EVOLUTION: MORE PROACTIVE & AUTOMATED Retrospective Monitoring Characterized by: Highly/ entirely manual processes Time, resource, and costintensive Random sampling & reporting = limited insights Resources less focused on action; consumed by process Redundancy in analyses Time to structure data Time to generate ad hoc reports Time to execute monitoring activities GOAL Proactive Monitoring Characterized by: Highly/entirely automatic analyses & reporting Reporting & metrics that are time, resource, and cost-effective Complete analysis = comprehensive insights Resources focused on analysis and action Is it structured so we can create the analysis we want? How much is it going to cost? How long is it going to take? Does the data exist? Can we access it? Tools Web-Based Forms Data Aggregation Data Visualization A long-term solution that flexes with your needs Embeds subject matter expertise in an automated platform HURON CONSULTING GROUP INC.

23 SAMPLE DATA SETS Data Set Sample Analyses Examples of Business Value Stakeholders Expense Data HCP Target List HCP Consultant Spend Promotional Programs Attendee List Clinical Trial Data Training Records Identification of Expense Outliers Per Attendee Meal Spend vs. Policy Requirements Appropriateness of Physician Specialty Targeting e.g. onlabel/off-label; NSAID Rx volume HCPs Consultant Spend vs. Policy Cap List of HCPs that attend multiple programs on the same product, with frequency Annual snapshot of compliance with FDAAA and NIH requirements Personnel training compliance statistics Identify total vendor spend via expense reporting to inform negotiations Identify potentially excessive spenders and take action centrally Faster decisions to include/exclude HCPs nominated by the field for detailing Enhanced promotional targeting (e.g. pain specialists, rheums, GP/FP, other audiences) Refinement of field resource allocation Strategic allocation of HCP engagement based on transparency to potential cap limitations Increase market spend efficacy by knowing when to refrain from inviting an HCP to multiple programs on the similar topics Sourcing potential new drug candidates Identify highest-enrolling sites for a given TA Increase knowledge development of company products and practices Compliance, Marketing, Medical Compliance, Sales, Sales Operations Compliance; all who engage HCPs Compliance, Marketing, Sales Operations Clinical, Commercial, Regulatory, R&D Compliance, Legal/HR HURON CONSULTING GROUP INC.

24 OTHER EXAMPLES Multi-Source Analysis HCP Risk Scoring MSL Risk Scoring RBM Risk Scoring Sales Rep Risk Scoring Competitor HCP Spend Analysis Compliance Value Business Value Stakeholders Proactively identify inappropriate relationships Proactively identify candidates for increased monitoring and records audits Identify spend outliers compared to competitors Provides full picture of information to assess relationship with HCP Proactive monitoring of potential risks such as offlabel promotion, kickbacks, misbranding, etc. may mitigate suspicion, investigations, hefty fines, and loss of brand value. Determine whether reallocation of spend is necessary Compliance, Marketing, Sales, Sales Operations Compliance, Sales, Sales Operations Compliance, Marketing, Sales, Sales Operations HURON CONSULTING GROUP INC.

25 CASE STUDY #1: OPEN PAYMENTS PEER ANALYSIS The Requirement The commercial group wanted to gain insights into the promotional activities of their peers. The Analysis Commercial and Compliance collaborated on the project to ensure adherence to business goals and company policies. Key analytics were created to provide insights into speaker programs and HCP utilization. The Results Compliance was able to discover key insights into peer makeup of speaker programs and HCP utilization HURON CONSULTING GROUP INC.

26 COMPLIANCE MONITORING WITH OPEN PAYMENTS: Comparing HCP Utilization Viewing how other peer companies engage HCPs that your company also utilizes can help to identify optics seen by government and the public HURON CONSULTING GROUP INC.

27 CASE STUDY #2: MEDICARE PART D TRENDS The Requirement The compliance group wanted to gain an understanding, using publicly available data, of the prescribing patterns of the HCPs they engaged. The Analysis Open Payments were analyzed in relation to Part-D data. Commercial and Compliance collaborated closely to ensure adherence to company policies, important in a sensitive exercise of analyzing HCP prescribing patterns. The Results Compliance was able to identify HCPs outliers warranting further analysis due to potentially worrisome prescribing patterns HURON CONSULTING GROUP INC.

28 COMPLIANCE MONITORING WITH OPEN PAYMENTS: Sales Correlated with Fee Payments Sales information (e.g. Part-D) can be correlated with physician fee payments to identify appearance of potential inappropriate influence HURON CONSULTING GROUP INC.

29 CASE STUDY #3: SPEAKER PROGRAM MONITORING The Requirement The compliance group wanted to track speaker program metrics in real-time. The Analysis Monitoring dashboards were created to provide real-time views of speaker programs, monitoring results, and investigations. The Results Compliance was able to efficiently identify trends in speaker program policy violations resulting in a rapid response which included retraining and a shift in attendee invitation practices HURON CONSULTING GROUP INC.

30 COMPLIANCE MONITORING OF SPEAKER PROGRAMS Program Monitoring Summary Tracking findings and corrective actions associated with monitoring Speaker Programs figures to remain a staple activity to include in monitoring dashboards HURON CONSULTING GROUP INC.

31 COMPLIANCE MONITORING SPEAKER PROGRAMS Attendee Count Distribution Analysis of attendees can identify programs with low utilization HURON CONSULTING GROUP INC.

32 CASE STUDY #4: SALES FORCE EXPENSE MONITORING The Requirement The compliance group wanted to gain insights into the expense activity of sales reps and the organization s association with vendors who present policy or perception risks. The Analysis Analytics were created to monitor T&E expenses to identify vendors and key metrics. The Results Compliance was able to identify several risks in expense meal venues and per-person costs HURON CONSULTING GROUP INC.

33 COMPLIANCE MONITORING WITH CONCUR Top Specialty Spending Using analytics to inspect Concur expenses can identify potential HCP attendees with inappropriate specialties HURON CONSULTING GROUP INC.

34 CASE STUDY #5: PRICING & CONTRACTING ACCRUALS The Requirement The Government Program group wanted reliable, repeatable, and efficient analysis of their monthly pricing and liabilities. The Analysis Analytics were created to seamlessly integrate with the GP systems and processes, tailored to the organizations unique needs and variance drivers. The Results Compliance was able to significantly reduce the burden of month- and quarter-end analysis of GP liabilities, and create informative, actionable management reports HURON CONSULTING GROUP INC.

35 SAMPLE: QUARTERLY AMP SUMMARY REPORT HURON CONSULTING GROUP INC.

36 CASE STUDY #6: CALIBRATING FAIR MARKET VALUE The Requirement The commercial group wanted to gain insights into the compensation peers were providing to HCPs. The Analysis Analytics were created to statistically analyze the distribution of payments for various types of HCP engagements, including speaking and consulting for both CME and non-cme activities. The Results Compliance was able to identify how their own compensation compared to peers HURON CONSULTING GROUP INC.

37 COMPLIANCE MONITORING WITH OPEN PAYMENTS FMV of Speaker Program Payments Open Payments data can be used to compare your speaker program payments against peers, giving insight into your FMV range HURON CONSULTING GROUP INC.

38 CASE STUDY #6: RETURN ON EDUCATION The Requirement The commercial group wanted to move towards optimizing total spend and distribution of spend to optimize return on education investment with speaker programs. The Analysis Commercial and Compliance collaborated on the project to ensure adherence to business goals and company policies. Key analytics were created to provide insights into speaker programs and HCP utilization. The Results Commercial and Compliance were able to jointly agree on shifts to be made in speaker program content, speaker selection, and regional spend while enhancing risk mitigation HURON CONSULTING GROUP INC.

39 RETURN ON EDUCATION Event Location Pattern Analysis Inputs Product sales Category sales SPB events Outputs Potential for more targeted education SBP overlay in a click-through national dashboard Implications Resource over/underdeployment Restricted speaker access environments Suggestion of content requirements HURON CONSULTING GROUP INC.

40 4 ROADMAP FOR ESTABLISHING AGILE ANALYTIC CAPABILITIES HURON CONSULTING GROUP INC.

41 STRATEGIC CONSIDERATIONS Consider your organization s unique vision statement and goal for conducting analyses For example: To identify positioning vis-a-vis competitors, and to draw insights that inform both compliance and HCP engagement functions Consider a governance document to guide analytics work at your company Identify stakeholders across all functional areas and build consensus around a unified team Evaluate internal capability to: Interpret analyses from both a compliance and commercial perspective Construct effective, informative analyses, including technology solutions Manage the project in a controlled manner, taking into account the numerous stakeholder sensitivities HURON CONSULTING GROUP INC.

42 DETERMINE REQUIREMENTS: BUSINESS, COMPLIANCE, FUNCTIONAL AND DATA Identify functional, business, and compliance requirements then combine with data requirements to help the team develop an end-to-end compliance and dashboard application Specific work activities and deliverables for the requirements gathering phase are provided in the table below. Activity Work Steps Deliverables Identify Business/ Functional Requirements Develop and Deploy Proof-of- Concept Application Review existing compliance policies and other documentation Identify business, functional, and compliance analysis requirements Conduct stakeholder interviews/workshops to determine functional/business requirements Create analysis views for proof-of-concept application Create risk management algorithms Identify required data elements Evaluate completeness and accuracy of data capture and identify gaps and solutions to remediate them Develop Functional Design Specification Develop requirements traceability matrix Develop data-based visualizations in accordance with the Functional Design Specification Review functionality with project team Incorporate feedback into functionality Implement Proof-of Concept Application Business/Functional Requirements Traceability matrix documenting business and regulatory requirements Draft Functional Design Specification for Proof-of-Concept Application Updated Functional Design Specification Proof-of-Concept Application HURON CONSULTING GROUP INC.

43 EXAMPLE METHODOLOGY Phase I Phase II Phase III Phase IV Design/Enhance Risk Assessment Process Determine Data and Risk Measures Design Dashboards and Infrastructure Replicate for Global Rollout Objective(s) Key Activities Key Deliverables 1. Create initial designs for visualizations and dashboards 2. Identify source data requirements that will support visualization and dashboard designs 1. Utilize risk assessment visualization library as a baseline to help users describe risk visualization requirements 2. Work with client stakeholders to identify visualization requirements 3. Create initial designs for dashboards and visualizations 4. Design drill-down, roll-up, and data amplification scenarios and designs 5. Define alert criteria 6. Identify source data elements for visualizations 7. Review source systems to ensure data elements are resident within the source systems 8. Work with client IT to create approach to capture data elements not currently stored in source systems Dashboard mock-up diagrams Dashboard data requirements, refresh processes, and ongoing support recommendations HURON CONSULTING GROUP INC.

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