“Pharma is under a lot of government and public scrutiny. This industry also runs on meetings. You put those two facts together, and you can see that a meeting can expose pharma to significant risk of enforcement activity if not done correctly,” said Geoffrey Levitt, vice president and chief counsel of Wyeth Pharmaceuticals, Collegeville, Pa., during his keynote address at the Second Annual Pharmaceutical Meeting Planners Forum.
Levitt's comment encapsulated one of the meeting's themes: how meeting planners can help their organizations avoid running afoul of the government in the current regulatory environment. Speakers and attendees also discussed other industry trends, such as economic changes, and strategized about how pharma planners can develop effective meeting consolidation initiatives and prove their value to senior management. Co-produced bymagazine and the Center for Business Intelligence, with American Express as the exclusive presenting co-sponsor, the conference was held in Philadelphia, March 20 to 21, and attracted more than 800 delegates.
Caution: More Investigations Ahead
Contrary to how it may seem, the mission of the Department of Justice is not to inspire paranoia in the pharmaceutical industry, said another keynote speaker, James G. Sheehan, associate United States attorney with the Department of Justice, Philadelphia. Rather, its goal is to protect medical program beneficiaries, root out fraudulent activities, recover any ill-gotten gains, and punish those committing fraud.
But if you do feel paranoid now — just wait. Government scrutiny of the pharma industry is going to increase in the near future, he said, because Medicare Part D creates many more opportunities for false claims, kickbacks, and research and marketing fraud related to any drugs sold to any Medicare beneficiary on Part D, Sheehan said. And the danger for pharma companies is not limited to federal investigations: States have their own enforcement issues, including unfair trade practices, pharmacy board regulations, and anti-kickback statutes. Now that New York Attorney General (and gubernatorial candidate) Eliot Spitzer has focused on these issues, Sheehan said you could expect to see more state AGs looking at pharma meetings more closely.
The tools the DOJ can use to monitor for fraud and kickbacks also have improved, due to pharmacy benefit management systems, which can provide data review and analysis; record complaints, investigations, and actions; and develop a watch list for pharmacies, drugs, prescribers, and patients. All of this data enables investigators to look more deeply and more specifically for wrongdoing than they had before. Instead of just relying on aggregate data from Medicaid, the government will now be able to track individual doctor's prescribing habits, and assess how promotional programs — and improper incentives — change physician behavior and drive up off-label prescribing.
So yes, it's important to have an internal compliance program to train pharma employees, but don't stop there, Sheehan said. Companies also should be training all their contractors on compliance. Third-party meeting planners can be focused more on return on investment than on compliance, he said. “And they can generate e-mail and other documents that are very useful to us. If you call it a CME meeting but the meeting planner shows that the goal of the meeting is to increase prescriptions to a certain level, that's gold for compliance investigators.”
The DOJ is mainly looking for meetings that promote a drug in a way that's misleading or false. “Whenever you're tracking results of prescriptions, there's a concern for us about the risk of harm to patients” from promoting inappropriate drugs. The extent to which switching patients to a certain drug deprives them of benefits from another drug is “just as much fraud to me” as outright misinformation, he said.
“We are not the pizza police,” Sheehan continued. There is wiggle room in the various rules, codes, and guidances. Take, for example, the Pharmaceutical Research and Manufacturers of America's Code on Interactions with Healthcare Professionals, which says that meals for physicians need to be modest by local standards. “‘Modest meals,’ that wonderful phrase. I don't know the answer to what a ‘modest meal,’ or an ‘appropriate venue’ is,” he said.
Wyeth's Levitt, in his presentation, offered his perspective: “The days of lavish venues and 14 hours of golf to one hour of meeting are over. We don't expect to meet in subway station waiting rooms, but the venue should be appropriate to the need.”
Sheehan emphasized that it's not necessarily any one situation that will trigger an investigation; it's a combination of activities that will raise a red flag, such as a questionable CME event, coupled with problems with how research is presented (or suppressed), sales reps' inappropriate behavior, and promotional activities that cross the line.
Regulations aren't the only factor driving change in pharmaceutical meeting planning, though. As keynoter Gary C. Cupit, PharmD, former president and CEO of Sapphire Therapeutics Inc., Bridgewater, N.J., pointed out, the economics of the pharmaceutical industry are changing, and not necessarily for the better.
Patents are expiring and there aren't a lot of new “blockbuster” drugs in the pipeline for 2007. Also, pharma companies are consolidating at a rapid pace, with the top 10 companies now controlling 58 percent of the U.S. pharma market, up from 25 percent in 1988. And generics are hurting these top companies, as patented drugs enjoy a shorter window of exclusivity than in the past. The shift toward managed care, which is paying for three-quarters of U.S. healthcare costs currently, also is taking a toll. “It used to take 12 months for generics to affect sales; now sales can be affected in a week,” said Cupit.
In addition, there is increased brand-name competition. While companies used to own the market for years, now it is only weeks or months now before a competing product is introduced. He also cited as factors driving economic change physicians' growing resistance to meeting with sales reps, patients' increasing influence on physicians, and the fact that more prescriptions are being written by a smaller number of physicians.
In response to the regulatory and economic pressure, pharmaceutical meeting planners are taking the initiative to consolidate their meeting spend and reduce costs. In a closed-door session for pharmaceutical meeting planners, delegates shared their successes and offered tips for quantifying and controlling the costs of their meetings.
One panelist outlined how important it is to track both cost savings and the cost avoidance that come, for example, from consolidating several similar meetings into one larger event. “Data is power,” said one panelist. “Managers love it. Hotels hate it, because we can tell what we spent on a similar meeting six months ago.”
Marybeth Roberts, CMP, senior manager, meetings and trade shows, Amgen, Thousand Oaks, Calif., said, “Consolidate your spend, and show your hotels how often you're using them. That's how we've been able to keep our rates down even when rates in general are rising.”
Panelists also said it pays to be diligent in tracking all cost savings, such as when a breakfast fee is waived to compensate for a problem. Joann Kerns, associate director of global meeting management with Bristol-Myers Squibb Co., Plainsboro, N.J., added that it's important to make sure that third parties are tracking savings as well.
Of the several pharmaceutical meeting planners who spoke about meeting consolidation, all mentioned the importance of technology, including proprietary systems, and those offered by commercial companies such as StarCite and OnVantage, in helping to track costs. “We rely heavily on technology to manage the minute details so we can handle 130 meetings in two weeks with three staff [members],” said one panelist.
Managing meeting costs also can help planners get a “seat at the table,” panelists said. “We've had a mandated sourcing process for several years, and we can generate reports to track expenses. We then report to management,” said Roberts. “Reporting up is essential.” Another panelist said, “You position yourself with procurement by gathering data first, then go knock on their door so you can partner with them on their goals and yours.”
The Case for Consolidation
During case study presentations, speakers got specific when talking about their experiences in developing a meeting consolidation program. Bristol-Myers Squibb Co. began its meeting consolidation process back in 1992, explained Lynn Ridzon, director, global meeting management. “At one point I was told that the perception of the meetings group was that [we] went to meetings to hold hands.' Far from being the truth, I thought, what can I do to show our value, the value of what we do? We were so much more than a travel and party department.”
Even though the company at that time had specific financial processes for managing individual expenses, the system didn't translate to meetings. “We needed to know the total [spend] in aggregate, not what was in individual budgets,” said Ridzon.
By 1995, the department had put together a global meeting team, and a year later, they had the technology to collect the data they needed. Four years later, Ridzon's group had developed a formal RFP process in conjunction with the procurement department that showed the discounts they expected from preferred vendors, based on BMS's volume of business. After a few more years, the group worked with the company's IT department to create a Web-based, flexible, Meeting Analysis Registration and Reporting System to track global meeting expenses and provide a breakdown of meeting expenditures.
The department realized a 23 percent cost savings in meetings, which “made everyone sit up and take notice,” she said.
The next step was a consumption and specifications management initiative, introduced by strategic sourcing, which allowed her group to look at meetings more strategically and “combine some meetings that had similar objectives to be more cost-effective,” said Ridzon. They also came up with the idea of establishing per-person, per-night caps that can work well with different types of meetings, she said, though the equation by necessity won't cover every contingency. In addition to the usual legal and budget approvals, every meeting has to go through a formal process. “We won't sign the hotelif executives do not approve the specific meeting budget,” she said. “That way, if we have to eventually cancel, our vendors know that it's because of a good business reason and not because we just arbitrarily signed a contract.” Her department's future goals include developing a small meetings program and implementing best practices globally.
At Amgen, Roberts found that administrators were negotiatingthat had bad clauses. “The company could save money there.” The meetings department also looked at all the hotels the company booked to leverage spend within often-used brands. Meeting consolidation had another benefit as well. “We were able to see which departments had the highest spend. The spend for certain departments had been consistently increasing; however, they were not funding us. Now we can go to them and say, ‘You need to support us. Here's why.’”
Last year, Amgen also implemented a small-meetings desk for internal meetings, since “small meetings can take as many resources as national meetings,” Roberts said. There's a mandate that any meeting of 10 or more people is sourced through Amgen's meeting planning department, and there's no fee charged back to the internal client. The desk handled 10-to-50-room-night meetings lasting up to three days, and “the feedback was so positive that we re-evaluated and now define small meetings as up to 75 room nights and up to four days” in length. “Some admins still want to do the planning, but many are glad to turn them over to us,” she added.
With a 100 percent outsourced model — Amgen uses StarCite, RegWeb, and preferred partners — she said, “You have to make sure you communicate with everyone in the matrix.” That also includes internal stakeholders such as legal, where it can pay to leverage your expertise. “We said, ‘Do you really want to review 1,500 contracts a year?’ We showed them the contracts we use and the concessions we get. Now they don't see contracts unless it's for a relatively high predetermined threshold.” In today's regulatory environment, it's also important that meeting planners show their compliance departments how they can help ensure that meetings are within guidelines, she said.
For those planners just getting started with consolidation, Amgen's Roberts suggested they follow their instincts, because “You know more than you realize.” Added Ridzon: “Have a business plan, find some allies, implement the plan, then continually look for ways to improve on your plan.” And don't groan in despair when new mandates come down, such as the initiatives instigated by the Sarbanes-Oxley Act, she said, “Embrace them, because they're a way for you to show the value of what you do.”
More conference coverage begins on page 36. For an explanation of the guidelines that affect pharma meetings, go to meetingsnet.com and do a keyword search for “Take Charge.” For more about Bristol-Myers Squibb's consumption and specifications management initiative, visit meetingsnet.com and search for “Cost Savings on the Cutting Edge.”
Pull up Your SOX
David Kaufman, a partner with Acquis Consulting Group, LLC, New York, outlined another important regulation that is having a big effect on pharmaceutical meetings: The Sarbanes-Oxley Act, the spawn of the Enron scandal and others. The gist of SOX, as the act is called, is that the CEOs/CFOs of publicly held companies have to sign off on financial statements and be accountable for them. Everything to do with money now has to be tracked and documented to prevent fraud. What's that got to do with meeting planning? You'd be surprised. Kaufman offered these tips during his presentation at the Second Annual Pharmaceutical Meeting Planners Forum:
If you plan meetings across several departments (as many pharma planners do), make sure the money is allocated to the right department.
Look at everything you do, identify any areas where fraud could occur, and employ measures to prevent and detect problems. Then monitor the system to ensure it keeps working and adjust as necessary.
If you do find problems, at the very least report them to your manager so you can show auditors that you took action. Even if the problem doesn't get resolved, it gets you out of the hot seat.
While there's nothing in SOX that says you can't accept gifts from vendors, you cross the line if those perks could influence your decision-making. Err on the side of caution, Kaufman said.
If you do get audited, ask the auditors what they need from you so you don't spend a lot of time preparing documentation they don't require, or that they need in a different format.