How Europe is turning transparency reporting from business constraint into commercial advantage

By Tim Slevin and Guillaume Roussel

— Tim Slevin is senior VP of global data solutions and Guillaume Roussel is director of strategy for Veeva Network Europe, Veeva Systems.


Dedicated to saving lives and improving human health, both drug makers’ and physicians’ ability to heal relies on public trust. To that end, the global pharmaceutical industry faces a stringent new regulatory landscape. On both sides of the pond, life sciences companies are now required to report virtually all “transfer of value” transactions or payments made to physicians not only to ensure ethical practice in the promotion of new therapies but to also demonstrate that they are a valid, vital resource to the healthcare industry. Two years into the implementation of the federally mandated Physician Payments Sunshine Act in the United States, many life sciences companies are struggling to find the value hidden among cost and labor-intensive new reporting that puts pressure on legacy data storage and management systems.

In Europe, however, the overarching new transparency guidelines are mostly voluntary. This means that while life sciences companies are still working to overcome the technical and cultural challenges with full disclosure, the industry recognizes transparency reporting is now a part of doing business today. Forward-thinking firms are finding ways to turn spend reporting into competitive advantage. Veeva Systems recently held a summit in Barcelona, Spain where Europe’s leading industry data experts shared their vision for the continent’s response to the incoming transparency codes. Even though the U.S. Sunshine Act came into effect a full 18 months before European regulation, some European drug makers are a step ahead in their efforts to create a culture of compliance amongst the sales force, and finding ways to use the insights gained from spend reporting to transform sales strategy and drive profits.

The European Federation of Pharmaceutical Industries and Associations (EFPIA) Disclosure Code came into effect this year, requiring pharmaceutical companies in 33 European member states to keep records of every speaker fee, travel expense, and sponsorship paid to a healthcare organization or provider (HCO or HCP). By 2016, companies must publish these records, either on their own web sites or on a centralized database. The Physician Payments Sunshine Act was first introduced in 2007 and signed into law on March 23, 2010 as part of the Patient Protection and Affordable Care Act. Pharmaceutical and Medical Device manufacturers with U.S. operations were mandated to begin data capture in 2013 and report to the Centers for Medicare and Medicaid Services (CMS) just last year. Having now experienced two years of annual reporting, many U.S. life sciences companies are calling for simplification or elimination of federal and state statues, which they say are an unnecessary burden and call into question their customers’ data security.

While both EFPIA guidelines and Sunshine Act regulations are likely to remain a moving target, U.S. drug makers can learn from the proactive approach being adopted by some of leading life sciences companies operating in Europe – many of which are global organizations.

Harmonizing transparency reporting

While differences between EFPIA guidelines and the Sunshine Act are significant and span areas like language, culture, local data privacy regulation, and even alphabet … both put new demands on the IT infrastructure supporting data collection and reporting. In Europe, those companies still operating disparate and legacy systems across their local businesses are struggling to streamline payment-tracking processes and deliver accurate reporting. For instance, reporting and storing of data on cross-border speaking fees require interoperability between local databases to meet the regulatory expectation that a drug maker should record and report total payments made to an HCP. To solve these challenges, some companies are adopting cloud-based data management solutions across the continent. Life sciences organizations are migrating to the cloud to store, integrate, and manage their disparate payment data in a single centralized system that’s easily accessible by all. New cloud master data management solutions are enabling cross-border companies to capture large, complex volumes of HCP and HCO expenditure data across multiple-source systems and countries.

But integrating payment data for record keeping is just the first step. Both European and U.S. life sciences companies must also manage the additional challenge of state or country-specific transparency reporting guidelines, which require different levels of data capture and have different reporting formats and timelines. To manage the EFPIA’s 33 sets of transparency rules, European drug makers are focusing their spend on data quality initiatives and sophisticated reporting software tools that guarantee full spend compliance by working with multiple national data platforms to produce country-specific compliance reports. The need for a central reporting engine that allows regulatory affairs managers to produce and send tailored spend reports to multiple recipients based on local disclosure requirements is of critical importance. Integrating cloud-based master customer data and a central compliance solution is key to enabling European drug makers to seamlessly exchange information between the field, corporate headquarters, and national and EU-wide regulatory bodies. As U.S. manufacturers reconcile the federal Sunshine Act with various state transparency statutes, cloud-based data storage and reporting systems will ensure accurate and consistent reporting in every U.S. state and territory.

Redefining the sales rep-to-physician relationship

As the industry works to rebuild public confidence while bringing life-saving drugs to market with fewer opportunities to meet face-to-face with physicians, European drug makers are using transparency reporting to improve customer relationships. In countries like Spain, physicians are just as much in the spotlight as drug makers, meaning many European HCPs are also sensitive to how their relationships with drug makers are being documented for public consumption. Rais Amils, a Barcelona-based life sciences lawyer, says, “Because the Farmaindustria code implementing the EPFIA code is voluntary in nature, data privacy regulations are especially important, and prevail over the voluntary code. The implication is that life sciences companies will have to request express consent from doctors for data disclosure, and it is likely that, at first, doctors will be reluctant to consent the disclosure of personal data.”

Meanwhile in the United States, physicians do not have the same right of refusal, so trust between the sales representative and HCP is critical to ensuring spend reporting is accurate and representative.  A physician in the United States does have the opportunity to review and challenge spend disclosures before they are made public. In Europe, forward-thinking sales strategists are using payment reporting to encourage more relevant and frequent communication between the physician and the brand.

For instance, continued medical education (CME) programs forge critical partnerships between doctors and drug makers around the world, and in the U.S. drug and device companies sponsor nearly a third of this medical training. Such education programs keep the medical community abreast of emerging research, and ultimately save lives. Under EFPIA guidelines, industry-funded courses and seminars must be reported, leaving physicians nervous that meeting their CME requirements could affect perceptions. European life sciences companies are addressing this concern by creating an opportunity to gain physician trust and loyalty by clearly outlining how specific CME programs offered to the physician will be reported. By training their sales force in each country to have open and ongoing conversations with customers about how and when their data will be shared with the public, drug makers on the continent are using transparency reporting as a launch pad from which to rebuild declining face-to-face relationships with physicians. Despite the efforts from the industry to educate physicians on transparency – broader communication programs need to be developed to inform the public of the importance of a tight collaboration between HCPs and industry to move research forward – then all spend related to CME will become understandable and accepted.

A new era in customer data analytics

Long before transparency reporting, Europe and the United States have seen a persistent decline in the number of physicians accepting in-person sales representative visits. As a result, life sciences companies have developed alternative channels of communication. For example, eDetailing offers a self-directed way for physicians to educate themselves on their own time. Email has also been used to inform no-see or low-see physicians or as a follow-up to a visit, but it has always come with the risk of non-compliance.

Now that every physician interaction with a drug maker can be easily and meticulously recorded and accessed, European and U.S. marketers are digging into these new data sources to better understand customer preferences, and drive more effective digital communication. Some are investing in interoperable master data management and cloud-based customer relationship management (CRM) solutions that contribute to customer profiles which empower the field force with the right information when interacting with customers. Integrating customer payment data with a compliant multichannel CRM application and content allows sales reps to maintain up-to-date and accurate customer contact information, channel preferences, and other data. With better customer insight, marketers too can orchestrate HCP communications to take physician preferences into account throughout the customer journey.

At a regional level across Europe, sales strategists are also using central storage of payment data to take a macro view of what types of customer interactions are creating value, and which payments made to HCPs are less effective at building long-term customer relationships. For the first time ever, marketers have a full view of a physician’s education habits and relationships with drug makers, including whether they are receiving payments from other brands. This information avalanche will usher in new approaches to brand marketing that take into account what journals physicians read, their patients’ needs, and their relationships with the pharmaceutical industry.

Adopting a value-driven approach to transparency reporting

At Veeva’s Barcelona summit, IT experts and drug makers agreed that France’s legally binding transparency regulation has helped the industry rebuild its reputation and modernize its sales model. The same can be true for more U.S. companies as they enter the third year of Sunshine Act reporting.

Alexandre Regniault, partner and French life sciences lawyer at Simmons & Simmons LLP, observed how Europe’s approach to transparency regulation can help the U.S. life sciences industry generate value from the new regulatory burden: “Here in France everybody accepts that there is no going back. Life sciences companies have to live with the new rules, and must learn to make the most of them. That includes seeing it as an opportunity to understand their business and relationships better, and using it as a means of competitive advantage.”

While there remain mixed opinions toward transparency reporting amongst U.S. drug makers, there is evidence both locally and in Europe that these new regulations have the potential to generate  major innovations to the sales model. Companies can choose to either see transparency as a threat, or to embrace it and use payment reporting as a trigger to improve compliance and transform customer engagement.