Jayson Dukes discusses the regulation compliance challenges related to the Sunshine Act for the Life Sciences industry.
Jayson, given your extensive background in regulation compliance, how will the Sunshine Act affect pharmaceutical companies in 2014?
It holds pharmaceutical companies accountable for their relationships with physicians. In reality, the industry self-regulated away from this practice over the past decade through PHRMA.
From a federal standpoint, The Sunshine Act had been proposed many times before, but never successfully made into law. It took the Affordable Care Act legislation to move it forward.
Many states already have similar requirements, called the Aggregate Spend requirements, so it’s certainly not a new concept.
How it will affect pharmaceutical companies is that it will require them to implement a data collection and reporting system for compliance. They will need robust policies and procedures, training and appropriate auditing and monitoring to ensure compliance.
How accurate does the information need to be?
That’s the most common question I get these days. The threshold of accuracy is still relatively unknown because postings don’t begin until next year.
The goal is obviously to make the data as accurate as possible. Your focus should be around having a sound process in place. No program or reporting system will be perfect but having a solid process shows that you are addressing the risk of this submission requirement.
Developing a compliance system is certainly the first step. Then monitoring and auditing policies should also be put in place to mitigate risk associated with the reporting requirement. For instance, auditing the system early on is important to make sure you have the appropriate controls in place to ensure the accuracy of the data.
Will this legislation effect some companies more than others?
The reality is this act impacts the smaller and midsized players the most because the larger players have internal resources to put a system like this in place. Smaller companies will need an external resource.
But there is a benefit for companies that have to hire an external resource for system compliance development. While external resources may not know your system the way an internal resource does, they will have best practices from the industry.
With fines up to $1,150,000, what should companies do to validate their data’s accuracy?
You definitely can’t take it at face value. There are five facets to the validation process:
- Accuracy: The collection process itself...can you rely on it?
- Transfer: The physical merging and scrubbing of the data (which is more on the technical side).
- Completeness: Is it accurate and complete? Are you getting all the data you need?
- Reporting: Are you meeting the reporting deadlines?
- Remedies: If an error is identified… you’ll need to perform a comprehensive root cause analysis and you will need to take the appropriate action to resolve the matter. Do you have policies and procedures in place to address anomalies in the data?
The cost of noncompliance is too great to ignore. So, implementing a sound compliance infrastructure is critical to mitigating the risk of making expensive mistakes.