This independent editorial series on healthcare and the law is sponsored by Lake Whillans, a distressed venture capital and litigation finance firm that helps companies facing litigation or arbitration.
As states began to jump onto the pharmaceutical regulation bandwagon around the turn of the century, Porzio Bromberg & Newman brought John Ohoro on to help clients sift through the growing maze of rules and regulations across the U.S. “There was no place really to find all of that information,” Oroho, a former general counsel at a pharmaceutical consulting firm, said. So Porzio, which Lake Whillans identified as the notable smaller firm in its Life Science Law Firm Index, began building databases, a project that has grown into a subsidiary of the law firm, Porzio Life Sciences, offering not only those resources, but also consulting and reporting services.
The need for such services is only getting bigger: In June, the European Federation of Pharmaceutical Industries and Associations will impose aggregate spend reporting requirements on members, similar to regulations already on the books in the U.S. Oroho discussed that changing environment and the keys to an effective global compliance program with us.
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How did we get to this point in terms of reporting, and where are we going?
John Oroho: This trend of transparency reporting really started in the early 2000s in the states. It quickly became, “Can you top this?” Different states were enacting new requirements and the life science industry saw it was going to be very difficult if you had 40 states with very different reporting requirements. That led to the federal Physician Payments Sunshine Act, originally a standalone law that became part of the Affordable Care Act. That preempted certain state laws and has become the open payments program.
What we’re starting to see abroad is very similar to what we saw in the U.S. Back in 2003, and then later on in 2008, PhRMA came out with the PhRMA Code, basically a code of conduct for pharmaceutical companies’ interactions with health care practitioners. As time went on, some states even made compliance with the PhRMA Code part of state law. The same thing is happening in Europe now and in Australia and Japan, as well. Something that started very small back in the early 2000s is now, with an accelerated pace, is kind of racing around the world. That’s a big, big area, and that’s where we come in. We’re able to interface directly with departments, vendors and systems, bring all of that information in, have our systems analyze it and put into the proper formats for reporting.
Are there other major regulatory developments that you’re tracking?
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Oroho: State and federal requirements around drug diversion, drug counterfeiting, secure supply chains: That’s impacting what companies have to do in order to be compliant and in order to ship their products to various states. Not only does it deal with the life science companies themselves, but also wholesale distributors and third-party logistics companies and the like. You’re starting to see more and more facilities, even physician practice groups, acquired by major healthcare systems. As a result, there are policies and procedures that are being adopted by healthcare facilities around the country that can dictate whether or not sales reps can get into those facilities. That’s a growing area that we track and make available to companies. We also get involved in a lot of promotional review. We’ve built databases so that companies can understand what they can say, what they can’t say and how they can say it, whether it be in sales aids or commercials and advertising.
Porzio also advises companies on their compliance programs. What do you tell them? What are the key focuses right now?
Oroho: Whether it be issues with off-label marketing, the False Claim Act or the Anti-Kickback Statute, it all comes back to the interaction between the company and healthcare practitioners. Any good compliance program makes everybody in the company aware of that important relationship and how to handle it in a compliant and legal fashion. Obviously, those people who have direct interaction with healthcare practitioners need to even have much more sophisticated training.
Especially now in the days of social media, everybody in the organization has to know if they post something about their company or like something on Facebook, or if they say things about their employer on Twitter, those things can have major consequences.
In many ways, you need a global chief compliance officer on the strategic and visionary end, and then an operations guru in compliance that can work with the business units, vendors and the like, to, for lack of a better word, operationalize that compliance program. It’s one thing to have a law or set of regulations that say, “This is what you have to do.” It’s a whole other thing to distill that down to how you conduct business in compliance with these laws and regulations.
What are the global issues involved in setting up such a program?
Oroho: A good transparency and aggregate spend reporting program really needs to be an HCP- interaction risk management system. There has definitely been a step-up in enforcement as it relates to the Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act and individual countries’ anti-corruption laws, especially in countries where HCPs are considered public officials. When we look at global transparency, we really look at three things: transparency reporting laws, corruption laws and data- privacy laws. Those form the three legs to the stool of an HCP-interaction risk management program. Here in the U.S., if you have to report the information under open payments, you don’t have to get the doctor’s consent: It’s mandated by law. However, in Europe, you need to have the consent of the physician in order to individually disclose that information. When you’re looking at global compliance, the most important thing companies to focus on is developing a robust program around HCP interactions. That’s where more and more of this will continue to go.
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