2014 U.S. Trends in Aggregate Spend Disclosure and Transparency

Transcription

1 2014 U.S. Trends in Aggregate Spend Disclosure and Transparency Results From Our 5th Annual Industry Survey

2 Overview As of March 2014, manufacturers of drugs, medical devices, and medical supplies will be required to submit the first phase of their compliance reports to Centers for Medicare & Medicaid per a section of the Patient Protection and Affordable Care Act (or PPACA) called the Sunshine Act ( Sunshine ). And as manufacturers prepare for Sunshine report submission, there are a number of additional disclosure requirements being developed across the globe, such as in France, which many are calling French Sunshine. The era of healthcare transparency is upon us and the demands are only increasing. Over the past 5 years, we have surveyed the industry to identify compliance trends and see how manufacturers are adapting to the constantly evolving regulatory landscape. In this year s survey, which includes responses from 51 manufacturers, we aim to understand the details around their aggregate spend solution, how they get their data in their system, how they are using the data within their system, and what they are doing to prepare for the trend toward global transparency in the upcoming year. Pharmaceutical companies made up the majority of respondents this year, with about half of respondents residing in the compliance department (see Figures 1 and 2). All individuals who participated in the survey are either very involved (88%) or somewhat involved (12%) in ensuring their company complies with aggregate spend, disclosure laws, and regulations. The survey is representative of the industry at large, with responding companies ranging from below $500M in revenues to over $40B in revenues (see Figure 3). Figure 1 Breakdown of Company Types 12% Medical Device 13% Operations 2% Marketing 10% Legal 8% $10B - $19.99B 12% Biotech Figure 2 Departments in Which Respondents Work 10% Other 8% Research & Development (R&D) 4% Finance 6% Sales 76% Pharmaceutical Manufacturer 47% Compliance Figure 3 Respondents Company Size 8% $20B - $39.99B 8% Over $40B 33% Under $500M 6% $5B - $9.99B 19% $1B - $4.99B 18% $500M - $.99B 2

3 How Companies Are Complying This year s results are consistent with the trend we have seen over the years - more companies, 74 percent this year, have moved to an automated solution for transparency reporting in step with Sunshine and increasing disclosure requirements (see Figure 4). Only 24 percent of respondents say they are still using a manual spreadsheet solution to satisfy reporting requirements, and all of those respondents are from smaller companies with annual revenue of less than $5 billion. Figure 5 Are Respondents Using the Same System for Sample and Spend Reporting? 51% 49% Figure 4 - How Respondents Are Currently Satisfying Reporting Requirements 41% Third-party solution 2% Other 24% Manually or with spreadsheets Sixty-five percent of respondents are using their aggregated spend data to gain additional business insights into their healthcare practitioner (HCP) programs (see Figure 6), with companies that are using manual tracking methods being less likely to do so. These business insights provide much more than the compliance metrics that are required for reporting. 33% Internal software system Figure 6 Are Companies Using Aggregate Spend Data to Gain Business Insights? About half of respondents are using the same system for aggregate spend/transparency reporting and sample reporting (see Figure 5). This number is up from 2013 when only 34 percent of respondents said the same, likely due to required reporting per Section 6004 of the Affordable Care Act and per Vermont state reporting. There are some significant advantages and efficiencies that can be realized by having this information all in one place, particularly if the data is being fed into an automated system for consolidation and validation. 35% 20% Global level 45% Local/regional only A more analytical view of the data supports applications for marketing and financial reporting and helps companies make more informed business decisions to increase the efficiency and effectiveness of their HCP programs across the company. 3

4 These insights allow companies to look at such metrics as year to year spending, spending by HCP or activity, average spend per activity, etc. Some leading aggregate spend solutions have advanced analytical reporting integrated into the solution dashboard, enabling users to take full advantage of their data. Most respondents (86%) expect to comply using either an internal or third-party solution as more regulatory requirements are implemented, with the majority saying that a third-party system is ideal. In fact, 23 percent of companies who are currently using an internal solution plan to switch to a third party in the future. Many companies are finding is easier and more cost effective to outsource their solution due to resource constraints. In addition, cloud based systems have the added benefit of being updated automatically according to the latest regulatory requirements which could be a significant time investment if done internally (see Figure 7). Somewhat surprisingly, 14 percent of respondents expect to continue their manual methods for reporting. With the increase in complexity of requirements, this can be a big task for an internal team who has to track regulatory updates, consolidate and validate data, and prepare the required reports. As one respondent stated, Spreadsheets are too cumbersome and too prone to error; data volume is significant even for a small sales force. Of the respondents who plan to move from a manual to an automated solution, a third party solution is preferred over an internal system by a 5:2 ratio. Figure 7 - How Respondents Plan to Satisfy Reporting Requirements as More Legislation is Passed 14% Manually or with spreadsheets 53% Third-party solution 33% Internal software system 4

5 Slightly more respondents, 76 percent vs. 67 percent in 2013 prefer their aggregate spend and disclosure solution to include a pre-integrated customer data solution (see Figure 8). Since complete and accurate customer data is absolutely necessary to be compliant, selecting a solution that is integrated with a high-quality customer data source and an integrated data service to keep customer data up to date will increase the overall accuracy and quality of the spend reporting solution. Figure 8 - Do Respondents Prefer And/Or Expect Their Solution to Include Pre-Integrated Customer Data? 24% The majority of respondents expect investment in aggregate spend and disclosure compliance to increase over the next year (see Figure 9). Respondents note increase in global transparency, moving to a new solution, or dealing with system enhancements as the primary drivers for the increased investment. 76% Figure 9 - Expected Change in Investment in Aggregate Spend Reporting and Compliance Over the Next Year 2% Decrease 58% Increase 40% Stay the same 5

6 Data Management Capturing healthcare professional ( HCP ) and healthcare organization ( HCO ) spend data is an essential part of aggregate spend and transparency disclosure reporting. Without complete, accurate data on HCPs and their affiliations, a company s reporting will not be compliant. Ensuring accurate spend data is linked to an HCP is a very complicated process, especially when the data must be gathered from many data sources and systems that deliver the data in a variety of formats, including third-party vendors. While most of this year s respondents (70%) say that less than 50 percent of their data sources come from third parties, this could still total at least a handful of data feeds per company (see Figure 10). With a number of external data sources to manage, companies need to make sure they are getting complete, accurate, validated data from their vendors. In addition, an audit trail should be in place to understand what information was sent and at what time. Put simply, manufacturers need to make sure to have the same standards for data stewardship and accuracy as their controls for their internal data sources. Figure 10 - Percentage of HCP Spend Data Sources From Third Parties 20% 51-75% 10% % Respondents are split on their preferred method of data integration in their aggregate spend and disclosure compliance solution (see Figure 11). The split likely reflects a difference in business models across companies (i.e., whether data stewardship is done out of a central group or whether data controls are in place at the department level). Figure 11 - Preferred Method of Data Integration With Aggregate Spend Solution 55% Multiple integration from various data sources 45% One consolidated data feed For non-cro (Clinical Research Organization) vendors, companies prefer to obtain spend data using a combination of methods (see Figure 12). For CRO vendors, however, more companies (37% vs. 27% for non-cros) are obtaining data only from spreadsheets (see Figure 13). In addition, 4 percent of respondents say that they are not even collecting CRO data. For both CRO and non-cro vendors, companies that were using manual methods of tracking and reporting were more likely (62% in each instance) to obtain vendor data solely from spreadsheets. 29% 26-50% 41% 0-25% Getting data from CROs seems to be a current challenge for manufacturers because CROs have not typically provided such data in the past (other non-cro vendors may currently support 6

7 Sales and Marketing projects requiring the provision of data). In addition, it s very likely that every company with which CROs work are requesting the data in a slightly different format. This information is, however, required for Sunshine reporting so companies need to find a way to receive it to maintain compliance. Being flexible and allowing the CRO to provide the information in a manner which eases their burden may be a way to ensure that manufacturers do get it. Some automated aggregate spend solutions will offer multiple options to enter or upload data due to these kind of circumstances. Figure 12 Method of Obtaining Spend Data From Non-CRO Third-Party Vendors 12% I don't know 2% Other 27% Spreadsheets 41% Use a combination of 2 or more methods 12% Data file transfer 6% Use an application to which the vendor has access to enter their data manually Figure 13 Method of Obtaining Spend Data from Clinical Research Organizations 14% I don't know 4% Other 4% We don't currently collect spend data from CROs 37% Spreadsheets 19% Use a combination of 2 or more methods 8% Use an application/portal to which the vendor has access to enter their data manually 14% Data file transfer 7

8 The majority of respondents require their non-cro third-party vendors to use their customer master, including their unique IDs (see Figure 14). However, far fewer (39% vs. 57% for non- CRO vendors) require Clinical Research Organizations to utilize their customer master data and unique ID (see Figure 15). Utilizing an enterprise customer master is a major asset to ensure accurate spend reporting for an HCP. Companies with multiple business units using different customer databases and third-party vendors are often faced with complex challenges trying to integrate and consolidate the customer and expense data. Not only must companies be sure to capture data in a consistent way across the organization but there needs to be a unique identifier for all HCPs so when data sources are merged, HCPs can be easily identified, merged and validated. Otherwise, companies end up with a record for Dr. John Smith and Dr. J. E. Smith when they are actually the same person. This standard is necessary for both CRO and non-cro vendors. Figure 14 Are Non-CRO Third-Party Vendors Required to Utilize Customer Master, Including Unique ID? 43% Figure 15 - Are CROs Required to Utilize Customer Master, Including Unique ID? 57% 39% 61% 8

9 Implementation of the Sunshine Act CMS recently announced that there will be a two-phased approach for reporting of 2013 payments. The first phase of reporting per the Sunshine Act is due to CMS on March 31, With CMS continuing to provide additional guidance on the requirements until the deadline, companies have been constantly adjusting their specific plan over the past year to make sure they are going to be compliant. In addition, there are elements of a Sunshine compliance plan that could be optional in their processes, so we wanted to find out how companies were tackling those issues. This year, more companies (61% vs. 52% in 2013) report they are planning a pre-submission review by covered recipients (providing covered recipients relevant spend information prior to report submission) (see Figure 16). Figure 16 - Respondents Planning a Pre-Submission Review by Covered Recipients 39% While CMS will provide a secure website for physicians to review spend transactions before they are published to the public, any disputes are still expected to be managed directly 61% with the manufacturer. In addition, there is only a 45-day review period to resolve any disputed transactions. If the dispute is not resolved in the given window, CMS will publish the manufacturer s amount, while marking it a disputed transaction and correct it the following year if applicable. This action could lead to having some dissatisfied physicians. With this information becoming publicly available, manufacturers need to be sensitive to their relationships with their customers. Giving the HCP an opportunity to review these expenses in a private, secure portal prior to submitting information to CMS will keep the channels of communication open and lead to more content physicians. In fact, when Cegedim surveyed over 500 physicians about their thoughts on Sunshine compliance, 85 percent of them said they would like to review data BEFORE it is submitted to CMS (see Figure 17). Additionally 80 percent of physicians would like to be informed of the value of goods and services even before accepting them. These are important points for manufacturers to keep in mind while developing their Sunshine compliance plan. Recommendations To allow physicians the opportunity to review their data before reporting to CMS, manufacturers should implement a solution that includes a pre-submission website where physicians can log on during a set timeframe to view and challenge applicable transactions. This process is not necessarily an approval process, but rather provides physicians with the ability to review and alert the manufacturer of any discrepancies. With some industry aggregate spend vendors, this functionality can 9

10 be seamless as it is an extension to the already implemented automated reporting solution. Also, manufacturers should find a way to inform physicians of gift or service values either prior to or when they are offered, rather than when they are being reported. While this may be a little complicated for meals that need to be calculated based on the number of people that actually attend, gifts like books or other materials should have a definite value. Whenever possible, they can include a note that indicates the gift or transfer of value amount for Sunshine reporting purposes. If definite values cannot be established prior to the service, providing an approximate amount should still have some benefit in building HCP trust. Figure 17 Physician Preferences Regarding Data Review 80% of physicians plan to review data once it's posted by CMS 85% of physicians would like to review data BEFORE it's submitted to CMS 80% of physicians would like to be informed of the value of goods or services BEFORE accepting them 10

11 Companies that do plan to pre-disclose spend data to HCPs prior to reporting to CMS are split on which group of doctors they will include. Thirty-two percent plan to disclose to all HCPs, 20 percent plan to only disclose to KOLs and 19 percent plan to disclose based on a certain spend threshold (see Figure 18). Most of the companies who had a different plan ( Other ) indicated that they would either disclose on an ad hoc/by request basis or they weren t yet sure what their plan was. For those companies who are using a spending threshold as criteria for which HCPs will be able to review data prior to CMS reporting, the threshold differed across companies (see Figure 19). Figure 18 - Who Will Be Included in Pre-Submission Reviews 29% Other 32% We will disclose all information to all HCPs 19% We will disclose only when spend to an HCP reaches a certain threshold 20% We will disclose to KOLs only Figure 19 - Spending Thresholds for Pre-Submission Reviews 17% Over $10K 33% Up to $1K 17% $10K 17% $5K-$9.999K 16% $1K-$4.999K 11

12 Most companies say that less than a quarter of their HCP transactions are considered indirect payments to HCPs (HCP receives transfer of value indirectly from the Applicable Manufacturer/GPO through a grant management organization, etc.) (see Figure 20). Indirect payments, as long as the manufacturer does not dictate or have direct knowledge as to which HCPs receive payment, are not required for Sunshine reporting. Since this makes up a small percentage of transactions for most, companies will need to report on the majority of HCP transactions. disclosure reporting-related investigations, although, in an audit situation, the document will likely be discovered anyway. Figure 21 - Are Respondents Creating an Assumptions Document in Relation to Sunshine? 31% T SURE Figure 20 - Percentage of Transactions That Are Indirect Payments to HCPs 10% 51-75% 8% 61% 31% 26-50% 59% 0-25% Figure 22 Are Respondents Submitting the Assumptions Document to CMS With Their Report? 19% While the majority of companies plan to create an Assumptions Document in relation to Sunshine, only about half of them plan to submit the document to CMS with their reports (see Figures 21 and 22). An Assumptions Document is an important step in Sunshine compliance because it defines the business processes and definitions they have in place to meet reporting requirements. While CMS has stated that manufacturers could submit an Assumptions Document with their report, companies are split on the impact of doing so. There is some debate in the industry about whether the information could be used in non- 49% T SURE 32% 12

13 Companies are also split on whether or not they will label payments as delayed for Sunshine reporting. Flagging payments as delayed is an option for manufacturers to shield the visibility of payments on products that are still in development. Flagged payments will not be disclosed to the public until the relevant product is approved or after 4 years. While flagging payments could protect some pipeline information, companies seem to be split on whether the extra work is worth the effort. Similar to 2013, the majority of respondents capture physician payments for U.S. reporting when the physician travels abroad on behalf of foreign affiliates. Sunshine will require reporting of all expenses paid to U.S. physicians including travel, transportation and lodging, so the few amount of Nos means companies are getting more prepared for Sunshine, but those companies will need to update their processes in order to be compliant with Sunshine requirements. Figure 23 - Will Respondents Label Payments as Delayed for Sunshine Reporting? 41% T SURE 26% 33% Figure 24 When a US Physician Travels Abroad, Do Respondents Capture Those Expenses for Reporting Under US Federal Law? 67% 4% T SURE 29% 13

14 Additional Impact of Sunshine The Physician Perspective With the implementation of Sunshine, much of the focus in the industry has been on how pharmaceutical and medical device companies will adapt. With physician-manufacturer financial interactions being posted on the CMS website later this year, this new regulation could also have a significant impact on physicians and their interactions with manufacturers. This section of the white paper details the physician perspective on Sunshine and includes responses from 507 U.S. physicians who currently accept transfers of value from manufacturers and who, at the very least, have heard of Sunshine. The CMS Open Payments website contains information to inform physicians of the details of Sunshine disclosure requirements and we wanted to find out if physicians are taking advantage of the information. What we discovered is that while 44 percent of physicians are aware of the CMS Open Payments website, only 7 percent say that they have visited the site (see Figures 26 and 27). Figure 26 - Are Physicians Aware of the CMS Open Payments Website for Physicians? Sunshine Awareness Sixty-five percent of physicians surveyed say that they are either very informed or somewhat informed about the requirements of the Sunshine Act, while 6 percent say that are not at all informed (see Figure 25). Keep in mind, however, that this level of awareness is derived from physicians who have indeed heard of Sunshine, and some physicians that we reached out to said that they are unfamiliar with the regulation. So, overall physician awareness of the requirements across the industry may be slightly lower. 56% 44% Figure 25 - Physician Awareness of Sunshine Requirements 12% Very informed 6% Not at all informed Figure 27 - Have Physicians Visited the CMS Open Payments Website? 53% Somewhat informed 29% Not very informed 93% 7% 14

15 While most physicians have not taken advantage of the educational resources on the CMS Open Payments Website, most want and/or expect information from manufacturers on Sunshine to inform them of the requirements (see Figure 28). To boost physician knowledge and trust, manufacturers should consider creating a basic information sheet on Sunshine requirements that sales reps can deliver at their visits. Figure 28 - Do Physicians Want and/or Expect Information From Manufacturers to Inform Them of Sunshine Requirements? concerned with patient perception (85%) but also the potential media backlash (51%) once financial information is made public. Figure 29 - Physician Concern Over Sunshine 13% Very concerned 12% Not at all concerned 23% 39% Somewhat concerned 36% Not very concerned 77% Patient Perception and Public Education Most respondents (88%) have some degree of concern over the impact of Sunshine (see Figure 29). Physicians are mostly To combat their primary concern of patient perception of these financial interactions with manufacturers, physicians believe that the responsibility to educate the public on the actual requirements of Sunshine lies mostly with CMS (56%) and manufacturers (51%) versus the AMA (26%), the media (16%), and themselves (18%) (see Figure 30). Seven percent of physicians entered additional options that included mostly the government/congress or that no one has this responsibility. Figure 30 - Physician View on Who is Responsible for Educating Public on Sunshine Regulations 51% 56% 26% 18% 16% 7% Manufacturers AMA CMS HCPs Media Other 15

16 Overall, however, physicians feel that the more important goal should be to educate the public on the benefit of physician-manufacturer relationships (see Figure 31) versus the requirements of Sunshine. While they still said that Manufacturers (63%) and CMS (46%) had the greatest responsibility in this task, they also put a greater responsibility on the AMA (36%), the media (25%), and themselves (32%) to accomplish this. Recommendations Manufacturers, among other groups, should consider enhancing direct-to-consumer PR and marketing campaigns to include the benefits of relationships between manufacturers and healthcare practitioners. These campaigns may include proactively responding to poor public opinions about the industry, and starting open communications to the public about how the industry works with healthcare professionals and organizations to develop therapies, which in the end, benefits patient care. While most physicians said that they would like information from manufacturers on Sunshine to inform them of the requirements, fewer physicians saw the need for information from manufacturers on Sunshine disclosure requirements to pass along to patients (see Figure 32). This is consistent with the fact that physicians would prefer public education of the actual regulation to come directly from manufacturers or CMS. Figure 31 - Physician View on Who is Responsible for Educating Public on the Benefits of Physician-Manufacturer Relationships 63% 46% 36% 32% 25% 7% Manufacturers AMA CMS HCPs Media Other Figure 32 - Do Physicians Want and/or Expect Information From Manufacturers on Sunshine Requirements to Give to Patients? 39% 61% 16

17 Impact to the Physician-Manufacturer Relationship Manufacturers should expect to see some impact to their physician relationships. While 39 percent of physicians say that it won t affect their interactions at all or very much, 10 percent of physicians say that it will greatly affect them while 29 percent say it will somewhat affect them (see Figure 33). Expected impact correlates with physician concern over the new requirements. Physicians who express a higher level of concern also tend to think that disclosure requirements will have more of an impact on their interactions with manufacturers. In terms of what kinds of transactions will be impacted by disclosure, physicians say that entertainment (41%), facility rentals (40%), gifts (40%), investments (37%), and travel and lodging (37%) top the list of things that they plan to completely stop accepting from manufacturers (Figure 34). Those choices seem logical and are consistent with the concern of patient perception, since spending on entertainment and gifts may be harder to justify in the critical public eye. Furthermore, fewer physicians plan to eliminate such items that may be more clearly beneficial to all, such as education and research. Only 16 percent of physicians say that they plan to completely eliminate food and beverage. Figure 33 - Expected Impact on Physician s Personal Interactions with Manufacturers 14% It won't affect my interactions at all 10% It will greatly affect my interactions 25% It won't affect my interactions very much 29% It will somewhat affect my interactions 22% Not sure/neutral 17

18 Figure 34 - Items that Physicians Plan to No Longer Accept from Manufacturers Entertainment Space rental or facility fees Gift Travel and lodging Current or prospective ownership or investment interest Royalty or license Compensation for serving as faculty or as a speaker for an unaccredited and non-certified continuing education program Grant Charitable contribution Compensation for serving as faculty or as a speaker for an accredited or certified continuing education program Consulting fees Compensation for services other than consulting, including serving as faculty or as a speaker at an event other than a continuing education program Honoraria Research Food and beverage Education 10% 28% 27% 24% 21% 21% 19% 17% 17% 16% 42% 40% 40% 37% 37% 33% Recommendations We recommend that manufacturers focus physician marketing on items that more clearly demonstrate patientend benefit, such as education. While many of these other items are justifiable, the public may scrutinize things under such categories as entertainment, gifts, or travel, so be prepared for slightly less participation than in the past. Additionally, if there was a clear educational benefit to categories like travel or food and beverage, manufacturers can take advantage of the extra text field in the CMS report file to provide this extra detail. It may make the difference in the amount of criticism received once posted online. 18

19 Global Compliance Transparency regulations are increasing around the globe. Countries in regions such as Europe and Asia-Pacific are watching the U.S. legislation unfold and starting to implement laws that are similar in nature but customized to their healthcare system and practices. With this trend, we wanted to find out if global issues affect how U.S.-based groups make decisions about their disclosure and transparency compliance. Few respondents say that there is no need for a global solution, though only about one-third consider it a necessity to implement such a system (see Figure 35). Aggregate spend and transparency solutions that can be used across borders allow companies to not only implement consistent compliance standards across the company, but enable them to make business decisions and optimize spend by comparing HCP marketing data. The majority of companies, 57 percent, say that their solution is centralized regionally (in which data integration, business rules, and reporting is defined and controlled by regional governance) (see Figure 36). This is up from 37 percent in 2013 and probably due to the fact that there are differences in reporting requirements around the world. It s possible that, at least for now, companies are finding that the regional experts are more effective in defining the rules that are necessary for their reporting, especially as new requirements are still being developed. Figure 35 Importance of Implementing an Aggregate Spend and Transparency Solution That Can Be Used in Other Countries Across the World 14% I don't see a need for this. It's not a factor at all in choosing a solution 51% It would be nice, but it's not necessary 35% It's absolutely a requirement Figure 36 - Deployment Strategy for a Global Transparency Solution 29% Solution is centralized globally in which data integration, business rules and reporting is defined and controlled by corporate governance 14% Not applicable - solutions are local country only 57% Solution is centralized regionally in which data integration, business rules and reporting is controlled by regional governance 19

20 However, the 29 percent of companies that say their solution is centralized globally (in which data integration, business rules, and reporting is defined and controlled by corporate governance) will be able to better compare program data across regions, so it will be beneficial for companies to work toward a corporate standard to be used for all countries. If companies set their corporate standard to adhere to the strictest regulations, all other country reports will be compliant. For companies that value the implementation of a global aggregate spend and transparency solution, Western Europe is by far the greatest priority (see Figure 37). Within Europe, respondents were mostly concerned with France (due to the implementation of French Sunshine), United Kingdom, and Germany (see Figure 38). Figure 37 Regional Priorities in Considering a Global Aggregate Spend and Transparency Solution 2% Middle East 14% Asia Pacific 64% Western Europe 4% Latin America 2% Russia 14% Eastern Europe Figure 38 Country Priorities in Considering a Global Aggregate Spend and Transparency Solution UK France Germany India China Spain Japan

21 About 63 percent of respondents indicate that global aggregate spend and transparency initiatives originate in U.S. offices, while 15 percent indicate that decisions originate from a global headquarters located outside the U.S. (see Figure 39). Only 2 percent of companies indicate have implemented a comprehensive global aggregate spend solution and almost half of respondents indicate they haven t yet determined when they will do this (see Figure 40). This is consistent with the fact that, at least for now, companies seem to prefer to handle the transparency challenge on a regional basis so they can ensure the nuances of all the regional or local regulations are met. In the future, we anticipate this to change slightly as companies become more comfortable with compliance reporting and realize the benefits of being able to have one standard compliance process. Figure 39 Where Global Aggregate Spend and Transparency Decisions Originate 15% Global headquarters (outside of US) 8% Regional headquarters 6% Local country offices 8% Not sure 63% United States offices Figure 40 Timeframe for Moving Forward With a Global Solution 2% We already have one 27% % Not defined 2% %

22 Final Thoughts With the implementation of Sunshine and the trend toward global transparency, the process of gathering, validating and reporting on HCPs per the many requirements can be a huge task for manufacturers to handle internally. We strongly recommend companies to evaluate an automated cloud-based solution that can quickly adapt to changes in regulations and leverage third-party compliance expertise. It is also recommended that companies adopt a holistic approach to tracking and reporting that uses a foundation of high-quality healthcare practitioner and organization reference data since complete and accurate customer data is absolutely essential for compliant reporting. This approach needs to include integration and validation all internal department databases, third-party vendors, and internal business applications into a single source of customer data. Integrating external systems, such as Concur, with a company s customer master and aggregate spend solution means that data is accurate upfront as it is entered in the system, rather than having to match and validate it later in the process. With the details of financial interactions between manufacturers and HCPs and HCOs going public per Sunshine, companies should prepare for how they will manage relationships with their customers. While our results show that Sunshine will likely affect the frequency in which some physicians accept many types of items, manufacturers can take steps to ensure that the relationship between them and their physicians stays strong. Full disclosure and engagement with physicians through every step of the process is recommended. Manufacturers should set up a pre-submission review portal before submitting data to CMS. This will not only make sure companies are submitting accurate data to CMS, but it will enhance physician relationships by making them a part of the process. In addition, manufacturers should consider creating a basic information sheet on Sunshine requirements and their process for reviewing and reporting data. This will set expectations about when HCPs will get to view their data - whether it is through a pre-submission review portal or on the CMS website after it is made public. And while it may be a little harder to accomplish, physicians have made it clear that they would like to know the value of goods or services prior to accepting them, rather than when they are reported. Whenever possible, companies should include a note with gifts or transfers of value that indicate that you are including the cost to notify them of information related to Sunshine reporting. Relationships with the media, patient associations, and special interest groups should also be examined. Communications and public relation action plans should reinforce the benefits of legitimate interactions between life science companies and healthcare practitioners/organizations. By taking advantage of the new comment field attached to expenses per the final rule, manufacturers have the opportunity to explain the details of certain expenses, leaving less questioning and scrutiny from the public. Finally, companies should strive to take full advantage of the data that they have aggregated for transparency purposes. Rather than using data solely for compliance reporting, the industry needs to start to think about what advanced metrics could help improve their business and implement a solution that allows them to gain that insight. Advanced analytics can enable business decisions based on the success of HCP-related programs and third-party vendor data, not only across departments but across their entire company. In the end, the goal should be to have compliance departments coming together globally for a single, consistent plan for all company expenditure tracking. 22

23 Contact Cegedim Relationship Management Cegedim Relationship Management Americas Corporate Headquarters 1405 U.S. Highway 206 Bedminster, NJ USA Cegedim Relationship Management s AggregateSpend360 is the global leader in aggregate spend solutions. The outof-the-box, cloud-based solution streamlines the tracking and reporting of expenditures per state, federal, and global disclosure and transparency requirements. AggregateSpend360 is pre-integrated with Cegedim s Compliance ID powered by OneKey, Mobile Intelligence, and Nucleus360 solutions. Integration is also available with a wide range of enterprise applications for CRM/SFA, ERP, Finance and HR. For more information, visit 23