The Ten Commandments of Sample Accountability: Commandment #4

This is the 4th installment of the "Ten Commandments of Sample Accountability". For the next 7 Wednesdays, we will go through each of the commandments. I encourage all of you who deal in any area of compliance to check back each week as the 'compliance principles' behind Sample Accountability are very similar to those in other areas. Also, you can be sure that, much like GP is such a hot button right now, Sample Accountability is not that far behind...

By Judy Fox

Commandment #4 – Thou Shalt Have Documentation
The PDMA states, “…a manufacturer or authorized distributor of record that distributes drug samples Shalt establish, maintain, and adhere to written policies and procedures describing its administrative systems for…distributing drug samples…including the methodology for reconciliation of requests and receipts…the methodology for their independent sample distribution security and audit system…”

Whether a sample accountability program is paper based or automated, the program does not exist without documentation. The chain of possession for prescription drug samples must be documented at all times from the warehouse to the final disbursement to the licensed practitioner.

Pharmaceutical companies are first responsible for establishing a program that provides documentation to fully satisfy the requirements of the PDMA. Secondly, corporate procedures must exist to guide employees in the proper protocol for documentation. A system for document control must be established for those written procedures. All forms must be controlled so that each revision is carefully documented and distributed and channels of communications must be pre-established for any updates and changes to be distributed. Finally, it must ensure that the proper elements in sampling documentation are being captured at all times by their employees. If a third party vendor is used in the sample accountability program, the pharmaceutical company is still responsible for establishing business rules by which documentation can be processed or rejected.

There are often gaps in compliance when it comes to documenting the chain of possession of a sample, especially when transfers, closeouts and returns are involved. Often the key stakeholders in a sample accountability program are challenged in obtaining the proper documents from employees and as a result non-compliance activities surrounding proper documentation go un-noticed.

Often, corporate or home office employees are overlooked when it comes to establishing corporate documentation policies due to the fact that they do not actually handle samples.

If a corporate employee is assisting in processing sample orders or returns, they have to be fully aware of the importance of sample documentation. An error in documenting a sample shipment can create a problem for the field sales or managers when it comes time for reconciliation.

Proper monitoring is essential in ensuring if documentation is accurate, complete and timely. Non-compliance in sampling documentation can result in erroneous reconciliations and gaps in the corporate adherence to regulations and laws.

Seems We have not Forgotten the Children

A while back (August 3), I wrote an article entitled “Let Us Not Forget the Children” (re-attached at the bottom of this post). I’m happy to say that I’ve followed up on my writing and was thrilled to see two major stories that focused on our nation’s children last week.

The first talked about the a panel getting together and limiting access of children to OTC cough and cold medicines:

“Over-the-counter cough and cold medicines that have been widely used for decades should not be given to children under 6 years of age, a U.S. advisory panel recommended on Friday.

The panel said manufacturers need to conduct clinical trials to show the medicines actually work for children.

Members said evidence from studies was lacking and it was inappropriate to keep relying on adult data to suggest the medicines benefit kids.

"The studies that are available do not demonstrate efficacy," said panel member Dr. Robert Daum, a pediatric infectious diseases expert at the University of Chicago Children's Hospital.”

The second was a big headline story late last week. The House passed a bill that would contribute an extra $35 billion to the State Children’s Health Insurance Program(SCHIP). While the bill passed in the house, it did not pass the necessary 2/3 majority to avoid a veto from President Bush. I am not posting this to be political, but rather to acknowledge the fact that we are not forgetting the children:

“Ms. Pelosi said the bill was a test of the nation’s values and priorities. “To be a great nation,” she said, “we have to take care of the health of our children. It should almost go without saying, but it doesn’t. There is every compassionate, humanitarian, motherly, fatherly and family reason to be for this legislation. It
also makes good economic sense.”

Healthy children become productive adults, the speaker said.

Supporters of the new bill said it addressed all the major concerns that prompted Republicans to oppose the earlier version. The measure, they said, would end coverage of childless adults, ban coverage of illegal immigrants and generally prohibit states from covering children in families with incomes above three times the poverty level — $61,950 for a family of four.”

For those who may have missed my post back in early August:

Let us not Forget the Children

I had posted a recent study (Tuesday, July 24th “Most Children in U.S. Hospitals Receive Medicine Off-Label") that pointed out the staggering statistic that just under 80% of hospitalized children receive medications that have been only tested and approved for adults. This extensive study, the largest of its kind conducted by the Children’s Hospital of Philadelphia (CHOP), certainly shed light on the amount of off-label drug use that is occurring in our nation’s children. This is a scary thought when we think about the recent issues we have seen in adults with drugs such as Plavix and Avandia.

I was reminded of this story and inspired to write after watching the movie The Constant Gardener, which I will not ruin or give away for those who have not seen it. The basic premise is that the wife of the main character has discovered a major pharmaceutical company is testing a drug called Dypraxa, a drug with very promising potential for fighting resistant strains of Tuberculosis. The testing, however, is occurring on the people of Africa and, in many cases, the children of Africa. The story goes on to show that many of the Africans treated are dying because the drug is not quite ‘perfect’, but to pull the testing now would mean millions of dollars in expenses to the partnering companies. It’s far easier to ‘tweak’ the drug while in trials in order to expedite the drugs delivery. Meanwhile, more and more people and children pass.

So, while perhaps not a direct link, you can clearly see the where I’m headed. The vast majority of drugs (perhaps not cancer drugs and other potentially terminal illness drugs) have NEVER been tested in children --- yet they are administered to children time and time again. The drugs most prescribed to children are approved for use in the central nervous system or autonomic nervous system. Think of your own children…

I fully understand that the options are certainly limited for many physicians and I’m not playing the blame game. However, in recent years, we’ve seen so many things go wrong in adults that we are seemingly blindly moving forward in an industry where a huge percentage of pediatric patients are being administered drugs for while there is little or no clinical precedent. Clearly I see the issues with clinical trials with children, but are there alternatives we’re not thinking about?

I was just a tot, but do you remember Aspirin and its connection to Reye Syndrome? This was Aspirin, not a drug related to treating the central nervous system.

I’m not a parent as of yet, but my wife and I do hope we can enjoy this miracle some day in the future. I chuckle (in an ‘ironic’ way) when I see a warning label on a box of Legos warning parents that children can swallow them --- resulting in obvious danger. Yet we continue to inject or allow children to swallow drugs that have never been tested on them. As a potential parent, this concerns me.

In the CHOP study, off-label use accounted for $270 million, or 40%, of the total dollars spent on children’s medication. That is certainly just a microcosm of the large chunk of change that the pediatric market represents.

But what’s the price tag on one adverse event in a child? 28% of children treated in the study received Morphine.

Let us not forget the children.

For Your Space,

Steven.

I’m most certainly encouraged by last week’s developments!

Calling All Bloggers: Your Terms. On Your Terms.

Good Morning Everyone,

I hope you had an enjoyable weekend! I actually played a game of touch football with some old college friends and I'm quite sore. Yes, sore from a touch football game. I'm clearly getting older...

If you notice along the left hand side of the Pharma Compliance Blog, there is a section called: THE PHARMA COMPLIANCE INFOHUB Your Terms. On Your Terms. This is a search engine powered by Google that will search, up to the second, the term that you click on. As our compliance spaces and industry continue to grow --- so too should those terms.

So rather than getting to heavy into topics this early and cold morning in the Northeast (Hard to believe we're just about 3 weeks away from Thanksgiving!), I thought I'd ask you all if there are any additional terms you'd like to see and search on the left hand side of the blog. Just click on the "POST YOUR THOUGHTS HERE" link at the bottom of this post.

Have a great week everyone!

For Your Space,
Steven.

Jack Johnson's If I Could Evokes a Thought: You Can...

I wrote last week about John Mayer and his song, Stop this Train, and it got me thinking more and more about music and its ties to our industry.

One of my favorite pastimes is sitting out outside --- wherever it may be --- and enjoying a cold beverage (diet soda, of course) and listening to music. During the summer, there is a staple in my household when it comes to the music side of things: Jack Johnson. If you haven’t listened to his music --- I highly recommend it.

This week, I focus on Jack Johnson’s song If I Could:

“A brand new baby was born yesterday
Just in time
Papa cried, baby cried
Said "Your tears are like mine"
I heard some words
From a friend on the phone
That didn't sound so good
The doctor gave him two weeks to live
I'd give him more if I could

You know that I would now
If only I could
You know that I would now
If only I could

Down the middle drops one more
Grain of sand
They say that
New life makes losing life easier to understand
Words are kind
They helped ease the mind
I'll miss my old friend
And though you gotta go
We'll keep a piece of your soul
One goes out
One comes in

You know that I would now
If only I could
You know that I would now
If only I could”

You know what’s cool? You can! Now obviously, this song speaks to a situation that had passed the point of no return, but how many of these situations have been avoided thanks to a medication or device that came from one of your companies? The study that was brought to our attention last week by a reader tells us that 1.6 million life years per year are being saved each year. That’s a lot of years --- and extra years we get to spend with the people we love.

If you listen closely to the music you love, I can nearly promise you that you will find references to various ailments and the hope that it builds in those surrounding the situation. The difference between the gifted musicians that I listen to and me is their artistic ability. That is, the ability to express through music the things that are in my own head. The questions we all have. The answers that seem so elusive…

I just watched Al Gore’s superb documentary on Global Warming, An Inconvenient Truth, and towards the end, he began discussing the concept of ‘what can we do about it’. He showed clips such as the abolishment of slavery, our ability to defeat fascism by fighting a war on two continents, desegregation and how the world teamed up together to reduce CFCs to help repair the ozone layer.

Then, albeit briefly, he talked about the pharmaceutical industry and its monumental accomplishments through research and development that have saved countless lives.

So I think the point of all of this is: I know you all would if you could. And, quite frankly, you can. Of course, the ‘you’ I am discussing is a collective ‘you’.

To me, that’s the only attitude that makes any sense in this world filled with questions.

For Your Space --- and For Your Weekend,

Steven.

Medicare & Medicaid's Grand Socio-Economic Issues Pull at the Heart-Strings by Clarissa Crain, CIS Compliance Specialist

Steven’s ‘Blog Topic of the Week’ last week (October 18, 2007) yielded a great deal of blog traffic and comment. Many bloggers jumped in with comments supporting Steven and giving additional credence to his argument in the way of evidence supporting the social and economic benefits of the pharmaceutical industry. Frank Lichtenberg, a professor at Columbia University, was referenced for his work related to “Pharmaceutical Innovation, Mortality Reduction, and Economic Growth” (1998). Without regurgitating the information provided in the Friday, October 19th blog topic, Lichtenberg’s research shows clear benefits to society and the economy when patients are provided access to innovative pharmaceuticals.

While those of us on the Pharma Compliance Blog were reading about Lichtenberg’s findings, a study from UCLA professor Dr. David S. Zingmond was published that evaluated the quality of care provided to elderly Medicare, Medicaid patients in California. Zingmond’s (2007) study found that patients in his study received only approximately 65% of the tests and other diagnostic evaluations and treatments available for the management of their conditions. Zingmond specifically sites the failure to provide Medicare, Medicaid patients diagnosed with heart failure the pharmaceuticals proven to be effective in the treatment/control of the condition. (See Elderly Medicare, Medicaid Patients Not Receiving Quality Care, http://www.sciencedaily.com/releases/2007/10/071017102220.htm).

Zingmond’s finings are disheartening at best. As a society we do not want to deny the elderly the care that they need and deserve. Unfortunately, Zingmond’s findings do more than just pull at the heart-strings, they highlight a larger socio-economic issue. If we go back and consider what we learned from Lichtenberg’s research specific to pharmaceuticals, we know that the provision of pharmaceutical drugs significantly lowers the cost of other medical treatments. For example, Lichtenberg (1996) estimates for every $1 increase in spending on pharmaceuticals there is a subsequent decrease of $3.65 in hospitalization costs, yielding a savings of $2.65. If we take from Lichtenberg’s studies the idea of socio-economic savings based on the utilization of pharmaceuticals, and couple that with Zingmond’s finding that 35% of Medicare, Medicaid patients are not receiving appropriate care, we can conclude that as a society we are paying for medical bills that would have been otherwise unnecessary if proper treatment had been provided in the first place. Savings that could help offset some of the deficit dollars linked to the Medicare and Medicaid programs?

The Deficit Reduction Act of 2005 set out to tighten controls on the prices paid by the Federal Government for pharmaceuticals provided to patients through the governments Medicaid program. The government defended the need for this tightening of definition and application in order to save the Federal Government billions of dollars. In the end, pharmaceutical manufacturers are now subject to a new set of regulatory requirements with regards to statutory pricing provided for Medicaid reimbursement purposes. However, if Zingmond’s study can be assumed to apply across the country, wouldn’t the government be better served to concentrate on providing patients with the drugs they need and thereby decrease the cost of other medical treatments that result from not utilizing effective treatments available for prevention and/or maintenance?

Note: Zingmond’s research evaluated the care provided to 100,258 dual eligible patients in California between 1999 and 2000. Since that time the Medicare Part D plan has all but eliminated dual eligibility, however for purposes of this opinion article his research is assumed to apply in today’s Federal Health Care environment across the country.

Also, be sure to check in tomorrow, Friday October 26th, for another musical post --- this time I salute Jack Johnson... FYS, Steven.

The Ten Commandments of Sample Accountability: Commandment #3

This week's third installment of our Wednesday series will look closely at this importance of compliance for all employees in a sampling program.

Commandment #3 – Thou Shalt Require Employee Compliance

By Judy Fox

The PDMA states, “A manufacturer or authorized distributor of record that has reason to believe that any person has falsified drug sample requests, receipts or records shall conduct a full and complete investigation, and shall notify the FDA…”

Any sample accountability program is only as good as the actual compliance and adherence to the program by those involved. Employee compliance in sample accountability is a wide issue and must not be limited to the field sales force (sales representatives) only.

The key stakeholders in a sample accountability program are often responsible for ensuring that all employees are not only informed of their responsibilities, but that the employees follow all corporate policies and procedures on sample accountability.

While a sample accountability program is most applicable to the sales force, it also must include, but not be limited to managers, supervisors, any home office personnel that are involved in shipping, ordering, and allocating samples as well as brand/product managers and sales and marketing personnel who determine sampling forecasts.

All sample accountability programs are not the same, so an all inclusive list for responsibility to a sampling program to serve as a benchmark does not exist. As a result, it can be difficult to establish a protocol based on an existing program.

Even though there is not a definite list of employees that must adhere to a sample accountability program, it is the ultimate responsibility of a pharmaceutical company to determine if their employees are complaint to corporate guidelines. Often, that means that a company must conduct assessments and monitor the program and its employees.

During an assessment, an interview is often necessary to determine employee compliance, however if the interviewee is a subordinate, it can be difficult to conduct a productive session. Because of the fact that there are often consequences to non-compliance, it is difficult, if not impossible, for a pharmaceutical company to uncover their own employees’ lapses.

Difficulty in implementing adherence is never an acceptable reason to let employee compliance ruin a solid sample accountability program.

PhRMA Warns Public about Growing Counterfeit Threat

At U.S. Chamber of Commerce Anti-Counterfeiting Summit

Washington, D.C. (October 3, 2007) — Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Billy Tauzin today participated in a panel discussion at the U.S. Chamber of Commerce Anti-Counterfeiting and Piracy Summit. Tauzin spoke about the worldwide counterfeit epidemic, its impact on patient health and what steps industry and government can take to help fight this growing threat.

“’Disease is our enemy. Working to save lives is our job.’ This is PhRMA’s mission and America’s pharmaceutical research companies work hard every day to meet these great challenges,” Tauzin stated. “But now we must also fight a different kind of enemy – the growing worldwide counterfeit epidemic. Never before have we seen a counterfeit threat this vast and this alarming. The counterfeit crisis puts at risk the health of patients around the world, hurts the U.S. economy and jeopardizes American jobs.”

According to the World Health Organization, about 10 percent of medicines available globally are counterfeits and pose a serious threat to the health of patients. The counterfeit business has also cost the U.S. economy between $200 billion and $250 billion a year and is responsible for the loss of more than 750,000 American jobs, according to the U.S. Chamber of Commerce.

Tauzin continued, “Clearly, more must be done to help thwart the activities of devious counterfeiters so that patients can have peace of mind knowing that their medicines are safe and effective. In fact, PhRMA recently testified before Congress and recommended further steps that can be taken to better protect American patients from tainted counterfeit medicines. We recommended increasing regulatory requirements for prescription drug repackagers, as well as wholesalers and distributors. We also voiced support for increasing the maximum criminal penalty for counterfeiting drug products from three years to 20 years. We strongly believe that the punishment should fit the crime.”

Tauzin added, “PhRMA also looks forward to building upon the public and private partnership efforts and initiatives – such as the U.S. Chamber’s anti-counterfeiting and piracy initiative – so that we can continue to track down counterfeiters, bring them to justice and most importantly, help prevent the proliferation of fake medicines around the world. This is not an easy task, but it is something we must do so that this enemy we now face can no longer threaten the safety of patients in the U.S. and abroad.”

The Art and Science of Standard Operating Procedures: SOP Attachments

Alaina Confer, Procedural Compliance Specialist
alainaconfer@cis-partners.com

After working hard on writing a clear and effective procedure, you should avoid muddying it with unnecessary detail. A solution to keep related information handy to the SOP is to extract that information and include it as attachments to the document. Some good materials for SOP attachments are:

- Definitions

- Process Flows

- Standard Forms/Templates/Sample Forms

Some definitions are necessary to either clarify or standardize a role or term contained in the SOP. However, the SOP may include terms that are defined by the referenced regulations. Consider defining these terms to align them with the company’s philosophy and policies. Ensure the modified definition does not contradict the definition set in the regulations. For example, the FDA GMP regulations (21 CFR 210) define ‘Quality control unit’ as “any person or organizational element designated by the firm to be responsible for the duties relating to quality control”; your organization may choose to further define this unit in an SOP by specifying a qualification or two that the organization requires these individuals to possess to perform the procedure the SOP describes. The purpose of this would be to align the role with the organization’s policies.

A process flow can be beneficial as well. Many individuals view themselves as visual learners; I am quite certain some of them work with you. The process flow will illustrate where the procedure branches in different directions, connects with other procedures, or loops back into the procedure (i.e. when approval criteria have not been met). Process flows are not necessary for short, linear procedures. However, the process flow will be much more valuable for complex and/or cross-functional processes.

Placing forms and templates in attachments to SOPs will provide easy references for the reader. Once again, this assists the visual learners, because as they train on the SOP they can better visualize using the form or template.

It will not always be necessary to have attachments for each SOP. For instance, definitions do not need to be included in an attachment or the SOP if a controlled Glossary of Terms to the SOPs is maintained. In general, though, your readers will appreciate the handy references.

More Positivity on the Horizon - I Promise!

Good Friday Morning Bloggers,

It seems that I've hit a positive chord out there and I'm extremely pleased about that. Yesterday's post easily surpassed the most people who have ever come to the Pharma Compliance Blog in a single day!

Along with the comments to yesterday's post, I received some emails as well as phone calls that were very positive. I think, to some extent, we're programmed by mainstream media to hear and believe the things they're saying --- and to genuinely believe that we're getting the whole truth and nothing but the truth. But we need only go through a difficult experience ourselves or witness a loved one in a difficult medical situation to learn the power and promise of the pharmaceutical industry. I learned it firsthand during my bout with Lyme Disease. I watched my aunt go through chemotherapy last year. And there's more...and, unfortunately, will be more.

Since this is Your Space. For Your Space. I will be sure to seek out the positives that are happening every day in our industry during my daily research. However, as we all know, it is also our responsibility to see and understand the negative so that we can learn from it and bolster compliance --- so not every post can be puppy dogs and ice cream!

With that being said, I enjoyed the below anonymous comments so much that I felt compelled to ensure that everyone sees it. The first reader makes some great points and then we're supplied with some very positive and exciting statistics!

Enjoy your weekend fellow bloggers!

For Your Space,

Steven.

"It's refreshing to hear a positive perspective on the contributions of the Pharma industry. So frequently, the public is quick to point out the high cost of drugs and conveniently leave out the cost-lowering affect pharmaceuticals have had overall. Consider the cost of one quadruple bypass vs. the expense of a cholesterol reducing drug - never mind quality of life. Conveniently, that same public doesn’t recognize the R&D dollars and related expenses to bring new drugs to market. Most of us have been touch indirectly, if not directly, by a cancer diagnosis. How important do those R&D dollars become, when it’s someone you love waiting for treatment or a cure? I often want to ask, where do you want to spend your money on R&D to develop another feature for your phone (maybe it can do your laundry or train your dog) or pharma R&D to maybe, just maybe, find a cure. Like John Mayer, I’m not color-blind either but every once in awhile it’s really important to point out all the great things pharma brings! So thanks for doing that!"

And some awesome stats we can all cheer for!

"All we need is the proof...

In the past few decades, hundreds of innovative new drugs have entered the marketplace. They help: improve quality of life; save millions of lives; increase labor productivity leading to more robust economies; and, provide cheaper, less invasive solutions to chronic diseases, such as heart disease. The improvements to quality of life and life expectancy have been significant. Studying US life expectancy between 1970 and 1991, Lichtenberg (1998) conservatively estimates a $15 billion increase in pharmaceutical R&D expenditures saves 1.6 million life-years per year, valued at $27 billion. Lichtenberg also finds pharmaceutical innovation decreases costs in other areas within the healthcare industry. For example, Lichtenberg (1996) estimates for every $1 increase in spending on pharmaceuticals there is a subsequent decrease of $3.65 in hospitalization costs, yielding a savings of $2.65. Additionally, by reducing the age of utilized drugs from 15 to 5.5 years, pharmaceutical expenditures increase $18, but yield a $129 savings in non-drug expenditures for a net savings of $111 (Lichtenberg 2002)."

The Pharmaceutical Industry: Making the Train Ride of Life More Enjoyable (An Ode to John Mayer)

Once in a while, it’s probably a good idea to share some really good news on the Pharma Compliance Blog. I stumbled upon this gem of information yesterday during my daily morning research session:

“Good news on the cancer front: Death rates are dropping faster than ever, thanks to new progress against colorectal cancer.

Among the report's other findings:
• Cancer mortality is improving faster among men, with drops in death rates of 2.6 percent a year compared with 1.8 percent a year for women.
• Lung cancer explains much of the gender difference. Male death rates are dropping about 2 percent a year while female death rates finally are holding steady after years of increases. Smoking rates fell for men before they did for women, so men reaped the benefits sooner.
• Overall, the rate of new cancer diagnoses is inching down about one-half a percent a year.
• New breast cancer diagnoses are dropping about 3.5 percent a year, a previously reported decline due either to women shunning postmenopausal hormone therapy or to fewer getting mammograms.

The annual report is a collaboration of the American Cancer Society, National Cancer Institute, Centers for Disease Control and Prevention, and North American Association of Central Cancer Registries.”

Amidst all of the talk of overhauling the current state of the industry, especially during the most recent presidential campaign, it’s important to note that there are a lot of things that are extremely right with the industry as it is. Statistics like these are awesome and whether or not you have a personal story that goes along with this or any other report, we can all agree that it adds to our peace of mind.

There is a song by the precocious and prolific songwriter John Mayer on his most recent release, Continuum, entitled Stop This Train, that is unbelievably touching and speaks so much to our very own thoughts. At the onset of the song, the lyrics follow:

“No, I'm not colorblind
I know the world is black and white
Try to keep an open mind
But I just can't sleep on this tonight

Stop this train
I wanna get off
And go home again
I can't take the speed it's moving in
I know I can't
But honestly, won't someone stop this train?

Don't know how else to say it
Don't want to see my parents go
One generation's length away
From fighting life out on my own”

Whether it is your own parents or the others in your life that you are close to and love, we can all relate to these lyrics. I’m certainly not in the business of depressing people, but I think you should all be proud to be in an industry that helps heal and comfort our loved ones. No matter the ailment, from Cancer to Lyme Disease to Hemophilia to snake bites to Malaria, our industry is helping countless numbers of people worldwide every single day.

Although we may not be able to stop the train of life, it’s comforting to know that the pharmaceutical industry is doing all that it can to make the ride that much more enjoyable...

...and perhaps a stop or two longer.

For Your Space,

Steven.

The Ten Commandements of Sample Accountability: Commandment #2

This is the 2nd installment of the "Ten Commandments of Sample Accountability". For the next 9 Wendesdays, we will go through each of the commandments. I encourage all of you who deal in any area of compliance to check back each week as the 'compliance principles' behind Sample Accountability are very similar to those in other areas. Also, you can be sure that, much like GP is such a hot button right now, Sample Accountability is not that far behind...

By Judy Fox

Commandment #2 – Thou Shalt Have Written Policies & Procedures

The PDMA states, “…a manufacturer or authorized distributor of record that distributes drug samples Shalt establish, maintain, and adhere to written policies and procedures describing its administrative systems…”

Written procedures provide the foundation for a sampling program and must include Standard Operating Procedures (SOPs), Corporate Policies and Corporate Procedures that clearly define the expectations for adherence to laws and requirements as well as the specific requirements within the pharmaceutical company’s sample handling program for documentation. The written procedures are the most valuable asset to the program and their integrity should always be protected.

A strong sample accountability program is “owned” by the pharmaceutical company. While vendors can offers valuable assistance in setting up a sampling program, the pharmaceutical company is ultimately responsible for its employees’ actions. The pharmaceutical company should ensure that their interests are protected above all else and as a result should have control over any of their written procedures, including SOPs, documents, forms and policies.

Document control can be as simple as setting up an approval process with a vendor before any changes are implemented or a pharmaceutical company may want to set up an internal process that channels all changes through an internal review and approval process prior to a vendor having access to a document. This would include any forms used in the field for sample accountability, SOPs pertaining to the administrative tasks of sample accountability and business rules established with a vendor for processing sample accountability documentation.

The best way to determine which approach is best for a pharmaceutical company is to conduct a review of the current written policies and procedures and to assess the following:

• Are there any gaps or inconsistencies in the current documents?
• Do all written policies and procedures follow all federal, state and industry laws, regulations and guidelines
• Are changes to documents properly routed for approval
• How are document updates communicated within the corporation
• Have all employees been updated on any changes
• Are the current versions of documents the only documents in the possession of employees

Medicaid Enrollment Declines for the First Time in Nearly a Decade

Low Spending Growth and Improved Economy Allow States to Focus on Program Improvements, As Well As Cost Control

WASHINGTON, DC – (Kaiser Family Foundation) Enrollment in Medicaid declined for the first time in nearly a decade, according to a new 50-state survey released today by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU). But faced with an improving economy, 42 states expect to expand coverage to the uninsured in the next year.

The survey reports a 0.5 percent enrollment decline in fiscal year (FY) 2007 driven primarily by two factors. States reported that the new documentation requirements were causing significant delays in processing applications, affecting mostly individuals already eligible for the program. State officials also cited the good economy and lower unemployment for reducing enrollment. After an all-time low for Medicaid spending growth in FY 2006, Medicaid spending continued to grow slowly by 2.9 percent in 2007 due largely to the decline in enrollment and the continued transition of prescription drug costs for dual eligibles from Medicaid to Medicare. States expect enrollment and spending to increase in FY 2008 as they move forward with program enhancements.

“In hard economic times, states are under incredible pressure to restrain Medicaid spending growth, but when fiscal conditions improve, states look to restore some cuts and really focus on improvements. States are turning to Medicaid to address the rising number of uninsured to help fill in the gaps for low-income families,” said Diane Rowland, executive vice president of the Kaiser Family Foundation and executive director of KCMU.

The budget survey of state officials, conducted by KCMU and Health Management Associates for the seventh consecutive year, found that this year more states than in previous times were pursuing policies to remove restrictions put in place during poor economic conditions and improve their programs. With the nation’s growing uninsured population, 42 states report efforts underway to expand coverage to their uninsured population using Medicaid as a financing vehicle for coverage efforts. Many of these efforts, however, will depend on the outcome of the federal debate on the reauthorization of the State Children’s Health Insurance Program (SCHIP) in light of the president’s veto.

Medicaid Policy Initiatives for FY 2007 and FY 2008

Unlike their singular focus on cost containment in earlier years, states have moved now to a range of priorities including expanding eligibility and benefits, improving quality, and changing the delivery of long-term care services. All states and the District of Columbia implemented at least one provider payment increase in FY 2007 and almost all (49 states) adopted an increase for FY 2008. More than half of all states for FY 2007 and FY 2008 expanded eligibility, including increases in income limits, new group expansions, or streamlining the application or renewal process. For the first time since FY 2003, no state plans to cut a benefit in FY 2008.

In FY 2007, 35 states expanded long-term care services and 46 states plan to do so in FY 2008. In both years, the most commonly reported expansions were expanding existing home and community based service waivers or adopting new waivers.

To improve care and achieve better value in their Medicaid programs, by FY 2008, 44 states will require health care plans to report performance measures through HEDIS® or CAHPS®. Twenty seven states will have pay-for-performance programs providing incentives for programs like tobacco cessation and payments tied to hospital readmission rates for chronic conditions such as asthma and diabetes.

The Impact of the Deficit Reduction Act of 2005

The Deficit Reduction Act (DRA) of 2005 included several changes to federal Medicaid policy, including a new requirement that states obtain documentation to prove citizenship and identity for individuals applying for or renewing Medicaid coverage. Three out of four states reported that the new rules contributed to slower enrollment growth in FY 2007 and caused significant delays in processing applications and increased the administrative burdens placed on states.

To date, seven states have plans approved using new DRA options on benefits and cost sharing. Kentucky, West Virginia and Idaho moved forward with comprehensive redesigns of their Medicaid benefits and four other states (Kansas, Virginia, Washington, and South Carolina) received approval for more targeted flexibility. For FY 2008, Wisconsin intends to seek approval to offer a modified benefits package for an expansion population.

The DRA also provided more state options for flexibility in long-term care. Nearly half (24) of states reported plans to implement a Long-Term Care Partnership Program in FY 2008 to help increase the role of private long-term care insurance. Take up of new state plan options for cash and counseling and the home and community based services option has been more limited.

Medicaid and Health Care Reform

Declines in employer-sponsored coverage continue to swell the ranks of the uninsured, with 47 million uninsured in 2006. States have been at the forefront in seeking ways to decrease the number of uninsured. Forty-two states said they have plans to expand coverage to this population and three indicated that they were having discussions but had not yet made a decision to move forward yet. Thirty eight of the 42 states reported that Medicaid would have a role in financing their plans while 34 states responded that Medicaid would play a role in enrollment.

Implementing Systems: Agendas, Agendas & Agendas

Brian O'Rourke, Compliance Specialist & PCX Product Manager
brianorourke@cis-partners.com

Manufacturers face many challenges when implementing a GP system. Time and money are the first two concerns always raised, as purchasing, integrating, testing, and validating a system is a massive effort requiring collaboration amongst several different internal departments and often several different vendors. Typically, a system implementation takes anywhere from six months, which is very aggressive, to one year to perform. As you all know, the investment of capital and resources is no small thing either.

The benefits are many to implementing a GP system: automation, data reliability, and historical integrity for audit purposes, to name a few. But getting from Point A (deciding to implement) to Point B (going live) requires the effective management of several different entities, all of whom have their own agendas during the project.

The external software team is looking to provide a system in the most cost-effective manner possible.

The external integration team is collaborating with the software team to ensure that the system goes live by a certain date.

The internal IT Department is working with these teams to ensure that the company’s existing systems function properly throughout and after the integration, though IT personnel typically do not have a thorough understanding of GP or its importance to the manufacturer, both in terms of exposure and profit.

The important question is: who is representing your business?

Enter the Project Manager, who effectively serves as Business Analyst and liasion. This individual’s main role with respect to an implementation is to represent the manufacturer’s interests. The Project Manager is there to ensure that your GP data continues to be calculated and submitted properly, while also managing the various teams on the project. Because as we all know, data must still be submitted regardless of whether a system is being implemented or not.

As a GP subject matter expert, the Project Manager has an intimate knowledge of statutory and regulatory requirements and can effectively work with all three teams above to guarantee that the manufacturer’s system will, and does, satisfy these requirements. In addition, the Project Manager can also coordinate the policy and procedure revision, which will be necessary once the system is live.

The Project Manager has only one agenda: representing your business. Having that representation during an implementation provides you with a system that is both compliant and practical, while enabling your internal resources to handle the day-to-day operations with minimal disruption.

Three Key Medicaid Considerations for Senior Management

There are several key considerations for manufacturers related to the operational aspects of Compliance with the Medicaid Program that amplify the focus on “integrity of the calculations” and should be thought of together as companies address the Final Rule.

CEO/CFO Certification: As of October or 2007, CMS requires senior level certification of the AMP calculations reported to the government. It is imperative that senior management has confidence in its reliance on policies and procedures, data integrity, G/L reconciliation and supporting documentation. Most companies had some review and approval procedures in place, but they may not have been formalized. It is recommended that companies establish standard “support binders,” that include, at a minimum, the following: checklists, the calculation summaries, reconciliation, review and approval, some standard analysis (such as comparison to the prior period AMP), key assumptions, and documentation of anomalies.

The “10 Year Rule:” Manufacturers are required to maintain records for a 10-year period, to be able to demonstrate supporting documentation for their calculations in any given period, and to be able to reproduce the calculations. Companies should establish sufficient record retention policies and procedures to ensure that source data is archived for 10 years. Companies should also define what constitutes “master data,” (such as printed binder contents and files on shared network drives,” and make sure that files for closed periods are secure and cannot be altered.

Documentation of Assumptions and Policies: The Medicaid Rebate Agreement, which manufacturers are required to sign in order to participate in Medicaid, clearly stipulates that manufacturers must maintain documentation of the policies and assumptions related to the calculations (See Page 6, paragraph i). This includes methodology, assumptions, and a comprehensive authoritative guidance library.

The FDA: 'Behind the Counter' or limit 'Over the Counter'

I have a headache...

Last week, two articles came out on the FDA that are on such opposite scales that it’s worrisome. Earlier this week, an article from FSP Magazine said:

“In the shadow of behemoths such as Pfizer, hundreds of small companies make thousands of long-established drugs that the majors no longer bother with. Now the U.S. Food and Drug Administration is stepping up a campaign to put these medications through its costly new-drug approval process. And that could place the little guys in peril. Deborah Autor, director of the FDA's office of compliance, says the agency is promoting consumer safety. "People think drugs are safe because they have been around, but they aren't," she says.

Little companies say the policy has a deadly side effect - preventing them from selling drugs that have been proved safe and effective. Blansett Pharmacal (blansett.com) in Little Rock is one of 70 companies that the FDA has ordered to stop selling timed-release preparations of the expectorant guaifenesin, starting in November.”

Not to be outdone, Reuters ran an article with the following:

“The Food and Drug Administration said on Wednesday it may create a new category of drugs that would be available without prescription at drugstores, but only after consultation with a pharmacist.

The FDA will hold a public meeting on Nov. 14 to hear feedback about the "behind the counter" concept, which could make some drugs now available by prescription more widely accessible to patients.”

Uh, anyone have an Advil?

I go back the following quote: "People think drugs are safe because they have been around, but they aren't.”

Which is it? In the wake of Avandia and other later found drug side effects, when are drugs really safe? When are they eligible for a bump up to a new category of ‘behind the counter’ sales? Honestly, when do we really know when drugs are safe?

Of course I am all for people having wider access to drugs, but I do fear that wider access may very well be fraught with danger. I also fear that the FDA is widely understaffed and meeting great pressure from the public and politicians to make more drugs available to more people. However, the concept of FDA Approval, though extremely expensive for the pharmaceutical industry, is a sound one.

Going back to the quotes above, I can’t help but find them somewhat contradictory. Smaller companies that have started to market longstanding, safe drugs have benefited the public by MAKING THEM MORE AVAILABLE! Forcing them to go through clinical trials will only damage their bottom line and delay or damage public access to drugs that have been safe for quite some time. Rather than spend the extra money scrutinizing these drugs, it would seem quite appropriate to pour that money into the continued study of new and newer drugs. Perhaps this methodology can prevent the recent scares that have been associated with behemoth drugs and companies.

So I have to ask: How is it possible that in the very same week, the FDA is proposing a third tier category for drugs that makes them available ‘behind the counter’ and, in the same breath, is proposing harsher trials for the very same drugs? In reading the article, these are longstanding drugs that have a history of safety. Sounds rather similar to the drugs that the FDA is proposing the smaller guys throw tons of money (that many don’t have) at.

Perhaps we can take the money, time and resources that the FDA is proposing we throw at a time-proven innocuous expectorant inherited by a small pharmaceutical company --- and throw it at the drugs seeking to cure breast cancer.

Or are we trying to use the little guys to fund the big guys?

At the very least, 'behind the counter', rather BTC, will add another acronym to our industry --- which is becoming one giant text message.

J/K. IDK the answers, but I'll certainly BRB.

For Your Space (FYS),

Steven.

Note: These opinions belong to me --- but I hope they make everyone laugh --- even just a lil' bit.

PBM Rebates and Best Price

Chris Cobourn, CIS VP of Regulatory

chriscobourn@cis-partners.com

One of the difficult legal interpretation issues with respect to the Final Rule is the application of Pharmacy Benefit Manager (PBM) Rebates to Best Price (BP). The Rule seems clear on Average Manufacturer Price (AMP): do not include PBM rebates as a price reduction in AMP, except for the Mail Order purchases or rebates, as these are price concessions and clearly retail. In the Final Rule Comments section pertaining to PBMs, CMS even addresses the difficulty on the part of the manufacturer to have much visibility into proprietary data related to the passing on of discounts, rebates, and other price concessions to end customers.

So, how do we make assumptions and put some rules in place around the unclear BP language about PBM rebates being exempt, except for when they are “…designed to adjust the price at retail or provider level”? It is a critical issue to get our arms around, as it could have a significant BP impact. The feeling I have, and it seems to be a common approach right now, is to apply the AMP logic where possible to the BP area to make some assumptions. Without clear guidance from CMS, this issue is ultimately a legal question and must be reviewed by counsel. Furthermore, CMS may publish clarifying guidance on this topic in the future, which could require companies to change the assumptions they make now.

From my perspective, the manufacturer does not currently have the ability to know to what extent, if any, a portion of the PBM rebate is passed along to adjust prices at the retail or provider level. I don’t think there is any data to support it, and the most you could do is to have something in an agreement outlining an allowable ‘pass on’ percentage if it is your understanding that this is occurring. Additionally, the wording on the BP side talks about rebates “designed to adjust prices at the retail or provider level…” I would ask, from the manufacturer’s perspective, if the PBM rebates being paid are “designed” for that purpose.

Here is a summary of relevant wording directly from the Final Rule, and some personal thoughts around it at this point.

Final Rule, page 39241:

AMP includes: "Sales including discounts, rebates, or other price concessions provided to pharmacy benefit managers (PBMs) for their mail order pharmacy purchases. . ."

I take the above provision to mean that AMP must include data pertaining to sales made to PBMs ONLY for their mail order pharmacy purchases.

Final Rule, page 39242:

BP excludes: "PBM rebates, discounts, or other price concessions except their mail order pharmacy’s purchases or where such rebates, discounts, or other price concessions are designed to adjust prices at the retail or provider level."

I take this provision to mean that PBM rebates, discounts, or other price concessions are excluded from BP, except sales to mail order pharmacies OR where such rebates, discounts, or other price concessions are designed to adjust prices at the retail or provider level.

For purposes of the BP section (page 39242), "provider" means "a hospital, HMO, including an MCO or entity that treats or provides coverage or services to individuals for illnesses or injuries or provides services or items in the provision of health care."

In other words, BP excludes PBM rebates, discounts, price concessions except when they are:

· Related to sales to mail order pharmacies;

· Designed to adjust prices at retail level (pharmacies, etc); or

· Designed to adjust prices at provider (hospital, HMO, etc).

This is only my opinion, and it is based upon the current guidance (or lack thereof). I do feel that the PBM Manager Care Rebates, as they are structured at most manufacturers today, are exempt from BP consideration, and by their nature, are not designed to adjust the price at retail, regardless of the fact that there could be a purchasing Mail Order operation within the same larger organization. I would further suggest that Manufacturers have seperate agreements in place in cases where there is an organization with a Managed Care Rebate Agreement, and also a Mail Order Operation, and that there is language in place to state your assumption that there is no “pass through.” But that is just my opinion. What do you think?

More on Weighted Averages

Katie Lapins, Senior Compliance Specialist
katielapins@cis-partners.com

I hope this is the last time we talk about this subject for a while… Here’s another oxymoron as a result of the DRA – I stand corrected, but I was right! (I’m still trying to figure out how this can happen…)

Mathematical geniuses, far greater than I, have labored over the calculations and determined that CMS’s response in their Q&A document regarding weighted averages does actually use the number of units as the weight.

AMP Calculations for Q1 Monthly’s

January: 300 Net AMP units / $1,500 Net AMP dollars = $5.00 AMP
February: 400 Net AMP units / $2,800 Net AMP dollars = $7.00 AMP
March: 600 Net AMP units / $3,300 Net AMP dollars = $5.50 AMP

Quarterly Calculation:

As defined by CMS

$1500 + $2,800 + $3,300 = 7,600 = $5.846 AMP
300 + 400 + 600 1,300

Weighting (traditional thinking)

Month 1: $5.00 * (300 Jan units / 1300 Total units) = 1.1538
Month 2: $7.00 * (400 Feb units / 1300 Total units) = 2.1538
Month 3: $5.50 * (600 Mar units / 1300 Total units) = 2.5385

1.1538 + 2.1538 + 2.5385 = $5.846 AMP

THE FINAL RULE: Weighted Averages

Katie Lapins, Senior Compliance Specialist
katie.lapins@cis-partners.com

Forgive me, but I’m still dumb-founded how one single statement in the Final Rule can cause so much confusion. In my most recent CIS Newsletter article, I discussed the following statement in the Final Rule:

“Quarterly AMP is calculated as a weighted average of monthly AMPs in the quarter.” (CMS Final Rule 42 CFR 447 [CMS-2238-FC], §447.504 (i) (2))

In a Q&A session at the IIR conference in Chicago recently, CMS did not clarify what should be weighted for the quarterly AMP. When I spoke with many people in the industry at the conference, they concurred with my personal opinion that weighting the monthly AMPs by the number of units was the most logical interpretation. Some had worked with counsel, others had simply made this judgment call within their department.

In addition to the non-answer provided at IIR, included in the latest Q&A document posted on CMS’s website is the following:

Question:
Should manufacturers calculate the quarterly weighted AMP by summing the three monthly AMP units and applicable AMP dollars for each NDC-9 and then divide the dollars by the units?

Answer:
Yes, manufacturers should calculate the quarterly weighted AMP by summing the three monthly AMP units and applicable AMP dollars for each NDC-9 and then dividing the dollars by the units.

The answer provided by CMS is not a weighted average. It is simply an average. If the Final Rule indicates it should be a weighted average, where does this leave pharmaceutical manufacturers? I think in the same position as with many other issues that remain unclear. Manufacturers may need to add this to the list of items about which they should consult with their legal counsel. CMS guidance and items like Q&A’s do not carry the same weight or authority as the Final Rule and it will be up to each company to determine what the most reasonable interpretation.

If we at CIS find out anything more, we will be sure to include something in our Blog.

THE FINAL RULE: Nominal Price Discrepancy

Chrissy Spicer, CIS Compliance Specialist
chrissyspicer@cis-partners.com

The Final Rule states -

447.510 Requirements for Manufacturers

a) Quarterly reports. A manufacturer must report product and pricing information for covered outpatient drugs to CMS not later than 30 days after the end of the rebate period. The quarterly pricing report must include:

4) Prices that fall within the nominal price exclusion, which shall be reported as an aggregate dollar amount and shall include all sales of single source and innovator multiple source drugs to the entities listed in 447.508(a).

The referenced entities in section 447.508(a) include:

1) A covered entity described in section 340B(a)(4);
2) An ICF/MR providing services as set forth in 440.150 of this chapter; or;
3) A State-owned or operated nursing facility providing services as set forth in 440.155 of this chapter.

Further, 447.508(a) states that sales of covered outpatient drugs at nominal prices to these entities are “excluded from best price.”

In summary, I take this requirement to mean that manufacturer must submit nominal prices for single source and innovator products to the entities listed above. However, in the DRA Q&A document posted on CMS’s website, the following appears:

DRA Policy Questions Posted 9/28/07

Q: Should manufacturers who sell drugs at less than 10 percent of AMP to 340B covered entities, state-owned or operated nursing facilities or ICF/ MR facilities through a FSS contract include these sales in their nominal price reporting?

A: No. Manufacturers are not required to submit reports concerning prices charged under the FSS. Therefore, manufacturers should include only those sales in nominal price that would otherwise be included in best price.

In summary, the Final Rule mandates manufacturers to report nominal sales to certain entities excluded from the BP calculation, and in the Q&A CMS states to report only nominal sales included in the BP calculation.

In my opinion, I believe CMS’s intent is for manufacturers to report nominal sales that are included in Best Price, because CMS is probably more interested in the entities that are receiving deeply discounted pricing that are not excluded from the calculation. However, the regulation specifically states to only report prices to the specific entities that are excluded from both the AMP and BP calculations.

Any thoughts?

PhRMA Statement on Enactment of FDA Legislation

By John Tripp

Washington, D.C. (September 27, 2007) — Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Billy Tauzin issued the following statement today on the enactment of the “Food and Drug Administration Amendments Act of 2007”:

“By signing into law the ‘Food and Drug Administration Amendments Act,’ President Bush has taken a vital step to both strengthen our nation’s drug safety system – already the world’s best – and preserve crucial incentives to help spur research and generate critical information about the use of medicines in our children.

“The law, which reauthorizes the Prescription Drug User Fee Act (PDUFA), provides FDA with additional resources it needs to promote and protect the public health. The increased fees will allow the agency to expand drug safety monitoring, hire additional staff for post-market surveillance, and modernize its information technology systems.

“FDA will have the capacity to modernize its Adverse Events Reporting System, which is used to collect and aggregate safety data, enhance its use of epidemiology studies and large medical databases that contain a wealth of safety information, and better evaluate risk communication and risk management programs.

“The law also reauthorizes the Best Pharmaceuticals for Children Act (BPCA) and the Pediatric Research Equity Act (PREA), both of which were set to expire on September 30. BPCA has done more to spur research and generate essential information about the use of medicines in pediatric patients than any other initiative and PhRMA has supported its reauthorization without significant modifications.

“Furthermore, the law will enable FDA to hire additional employees to review broadcast drug advertisements prior to public dissemination, helping to ensure that benefits and risks are clearly and accurately communicated. It also will create strong incentives for companies to submit such advertisements to the agency before airing them. This will complement improvements in advertisements that have already occurred as a result of PhRMA’s Guiding Principles on Direct-to-Consumer Advertisements about Prescription Drugs.

“Since its original enactment in 1992, PDUFA has been a resounding success for FDA, pharmaceutical research companies, taxpayers and, most importantly, patients. PDUFA has made timely review of new medicines possible without compromising FDA’s strict and objective review process. As a result, more than 1,000 new medicines have been made available to patients over the past 15 years. These medicines have helped millions of people lead healthier, more productive lives, and contributed to a longer life expectancy than ever before.”

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The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $43 billion in 2006 in discovering and developing new medicines. Industry-wide research and investment reached a record $55.2 billion in 2006.

PhRMA Internet Address: www.phrma.org

DRA Q&A

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