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CODE CHANGES: Implementation/ How to “How is this all going to work?”

CODE CHANGES: Implementation/ How to “How is this all going to work?” “How is this going to affect the industry?” Mark McElwain Partner, VP Allard Johnson Communications Inc mmcelwain@allard-johnson.com. Environment tightening rapidly in US When the US sneezes….

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CODE CHANGES: Implementation/ How to “How is this all going to work?”

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  1. CODE CHANGES: Implementation/ How to “How is this all going to work?” “How is this going to affect the industry?” Mark McElwain Partner, VP Allard Johnson Communications Inc mmcelwain@allard-johnson.com

  2. Environment tightening rapidly in US • When the US sneezes…

  3. Environment tightening rapidly in US • Pharma companies need to assess how the Codes will affect the way they do business • Adjust internal practices to new risk/reward tradeoffs

  4. Agenda 1. Environment tightening rapidly in US 2. Pharma companies need to assess how the Codes will affect the way they do business 3. Over the next 5 years, the pressure will be on CHE to reform

  5. “ If education looks like promotion, it will get regulated like promotion. If education uses gifts instead of content and faculty [to draw attendees] – it is promotion.” Martin Cearnal, CEO Physicians World/Thomson Healthcare Group (Global CME conference, 2001)

  6. US Trends • Significant fines from the FDA • New guidelines on relationships • PhRMA • Office of the Inspector General (OIG) • Some evidence of changes in the market

  7. FDA • Substantial fines on a range of companies • Manufacturing/quality • Rebates/switching payments • Other sanctions: • Publicity, Medicaid/Medicare exclusion, state laws • Aggressive advertising warning letters

  8. PhRMA Code on Interactions with Healthcare Professionals, July 2002 • Interaction: scientific/educational focus • No entertainment:  venue conducive to scientific/educational focus   • CHE: companies should not pay individual attendees. • Consultants:  token consulting arrangements not to be used to justify payments to doctors • Giveaways: for benefit of patients and < $100

  9. PhRMA Code on Interactions with Healthcare Professionals, July 2002 • Voluntary – but “85% compliance” • Still up on page 1 of PhRMA website

  10. OIG Compliance Program Guidance for Pharmaceutical Manufacturers (April 2003) • OIG is part of the Dept of Health and Human Services • Aim to promote compliance with the Anti-Kickback Statute, False Claims Act and Medicaid Drug Rebate Act • Quotes PhRMA guidelines approvingly, and provides a higher/ more detailed bar

  11. OIG Compliance Program Guidance for Pharmaceutical Manufacturers (April 2003) • "highly suspect“ practices include: • compensation given to providers in return for their attendance at "educational" presentations or for filling out minimal paperwork. • "switching" arrangements (rebates to a physician for switching from a competing product) • “unnecessarily duplicative research”

  12. A changing market? • AMA has its own guidelines on gifts to MDs • CME credits available to learn guidelines • Some MDs seeking payment for seeing reps or e-detailing sessions • Potential conflict with new guidelines • www.nofreelunch.org • (“Just say no to drug reps”) • Net effect is substantial change in US

  13. Back to Canada….

  14. Rx & D Code Implementation practices • Tales of two firms • One in Toronto, one in Montreal • Training/dissemination process: • one outsourced part of the process; • one completely internalized

  15. Firm A: • Patterns set from US office (Global HQ in US) • Leadership from Legal Department • “Special project” set up, reporting to Legal • New promotional/educational practices worked out by Legal Dept with Exec Cttee involvement • Training module written by Legal, integrated into training materials for all Sales/Marketing/CHE staff

  16. Firm B: • Leadership inside Marketing dept • CHE company was hired to develop training materials and facilitate what should be in them • Training materials: • Explained context. “Why we belong to Rx&D” • Gave examples of dos and don’ts from company perspective • (entertainment expenses, educational giveaways) • Prompted greater clarity re company’s own practices • In need of regular updates

  17. Similarities • Awareness that new tradeoffs between risk and reward mean that the company’s practices on a variety of issues is subject to change • Train staff about the Codes and internal practices • Companies are being proactive!

  18. Can’t wait for…. DETAILED CODE REGULATIONS (DOs AND DON’Ts)

  19. Fifty separate eurekas • Canadians spoiled by ad preclearance? • Advance and confidential ruling on aggressive claims • Detailed tablets are not going to be handed to us • Not feasible to have a industry-wide go/no go list • Each company is going to have to come to grips itself with the meaning of the Code changes • For many firms, it’s already started to happen, but there could be some sitting on the sidelines

  20. Agencies as partners • Important for agencies to understand the changes to the cultures of their clients • The companies have always had varying risk tolerances • patterns are shifting quickly • Great that PMCQ and OPMA provide forums: • limited opportunities for direct dialogue with agencies • Increased transparency useful • Rx&D and PAAB reports

  21. Impact on the Industry

  22. Impact on the Industry “These changes are going to kill the [medical advertising] industry….”

  23. Impact on the Industry Over the next 5 years, the pressure will be on CHE to reform • Net effect may be even to force some messages back to more traditional “advertising”

  24. Challenges to CHE • Conferences challenged in 2003 by first Rx&D Code changes • Second set of Code changes… • Challenges to unPAABed materials • Educational exemption (from PAAB and Health Canada) narrower than widely believed

  25. “Safe Harbours” harder to find If not sent to PAAB as product or “editorial” advertising…. • PAAB’s guideline on “Educational Meeting Reports” • Getting pieces accredited or endorsed by a university or health professional association • Patient materials • False harbours? • Advertorials, single-sponsored supplements Increasing difficult to find those safe harbours…..

  26. Conclusions • Environment tightening rapidly in the US • We can expect the same pressure here

  27. Conclusions 1. Environment tightening rapidly in US • Pharma companies need to assess how the Codes will affect the way they do business • Each company must adjust its own practices • Let’s spread word to sales/marketing/education staff • Agencies need to get with the program

  28. Conclusions 1. Environment tightening rapidly in US 2. Pharma companies need to assess how the Codes will affect the way they do business 3. Over the next 5 years, the most significant pressure will be on CHE

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