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Pharma Focus Should Be on Drug Pricing, Promotional Activities, OIG Official Says

Wednesday, November 7, 2012

Pharmaceutical company best practices should include a focus on drug pricing issues as well as promotional activities, a Department of Health and Human Services Office of Inspector General official said during a conference Nov. 5.

Pharmaceutical companies should pay extra attention to how they calculate drug prices, as well as how they report pricing information, Mary Riordan, senior counsel in the OIG's Office of Counsel, said during the Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum.

She also said companies should implement a centralized risk assessment program and maintain flexible and effective audit practices.

Riordan said OIG expects to audit several manufacturers in 2013 regarding their drug pricing policies.

She also recommended that companies maintain effective oversight of promotional activities involving drugs, such as the use of coupons and related payments to physicians and individuals.

CIAs and Compliance.

Riordan was joined by Gregory Demske, chief counsel to the HHS Inspector General, who spoke of the importance of corporate integrity agreements (CIAs) in promoting compliance.

For example, Demske said the CIA that GlaxoSmithKline entered into in July in conjunction with its $3 billion settlement contained a provision prohibiting the company from compensating sales staff based on the volume of their sales (127 HCDR, 7/3/12).

Instead, sales compensation will be based on customer evaluations and sales competency.

“We think it's a significant move for the company, and it's moving them toward aligning with the theme of paying for outcomes as opposed to paying based on volume,” Demske said.

Demske also said the CIA included a “clawback” provision, enabling the company to take back bonuses that were made to executives who engaged in any misconduct.

Pharma Roundtable.

In addition to her best practice recommendations, Riordan discussed a number of themes that emerged from a roundtable OIG held in February with 23 pharmaceutical companies operating under corporate integrity agreements.

She said the five main themes from the roundtable included:

• CIA implementation challenges;

• compliance program structure;

• identifying and monitoring risk areas;

• policies and procedures on employee training; and

• compliance activities after the CIA ends.

 

The OIG issued a report on the roundtable in March (58 HCDR, 3/27/12).

By James Swann  

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