2011 European Trends in Aggregate Spend, Transparency and Disclosure

Results from an Industry Survey

February 2012

COMPLY
Exclusive Survey Results From Life Sciences Executives on Regulatory Compliance Trends in Europe...

Executive Summary
A New Year for the European Life Sciences industry brings a broader network of regulatory legislation that is being stringently enforced at local, regional, and global levels. With an endgame to further prevent corruption and bribery, new laws and current regulatory agencies force pharmaceutical, medical device, and biotech companies to assess their ability to achieve better transparency reporting of aggregate healthcare practitioner (HCP) payment data. While the US model of operational compliance serves as the handwriting on the wall, European organisations remain uncertain on how exactly to approach their future of increased transparency. Furthermore, exactly seven out of 10 respondents (70%) feel that upcoming anti-corruption legislation will a ect an increased number of countries, requiring greater transparency. And nearly 5 out of 10 respondents feel that upcoming legislation will result in changes to current sales and marketing practises (46%) and increased resources to manage transparency (45%).
Figure 1: Impact of Anti-Corruption Legislation
Increased number of countries requiring greater transparency Changes to current sales and marketing practices Increased resources required to manage transparency Commercial advantage of improved reputation Bene t the business through reduced cost due to greater measurement and visibility

sustain vital connections with healthcare practitioners and customers. If one company failed to commit fully to the initiative and received widely publicized penalties, it would mar the appearance of the entire industry. Consequently, companies now promote drastic measures that aim to holistically change customer interactions and the capture, organisation, and storage of data related to payments or transfers of value to HCPs.

European companies are acutely aware of the increased di culty of satisfying new regulations.
Cegedim Relationship Management delivers its second annual survey of European Life Sciences executives who provided insight on current compliance trends. The aim is to continuously evaluate and interpret the progress of industry trends and highlight best practises for operational compliance. The 2011 compliance survey illustrates that European companies are acutely aware of the increased di culty of satisfying new regulations. As a result, many organisations are proactively working towards operational compliance by initiating integral processes. And while Europes con dence in reporting abilities is at an all-time high, companies are still unclear how to ease the administrative work involved with maintaining consistent, cross-organisational transparency. Life Sciences organisations are no stranger to the emerging series of legislation, such as the US Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, that impose criminal charges and skyrocketing nes if breached. Therefore,

Index - pg.17

70% 46% 45% 29% 26%

0% 20% 40% 60% 80%

Europe defers to the mature US enforcement model for insights into their regulatory future, with nearly two-thirds (64%) of respondents anticipating that promotional spend tracking in Europe will reach US levels in one to three years. But in keeping with the sea of cultural di erences that separate Europe from the US, respondents hint that they will most likely not follow the US model entirely, but rather pave their own way to operational compliance. The onset of 2012 marks great change in the US, as the sunshine provision of the Patient Protection and A ordable Health Care Act (PPACA), known as the Sunshine Act, will

the industry must collectively and proactively address the new era of global transparency in order to restore and

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require in-depth reporting on payments and transfers of value to physicians and teaching hospitals for a portion of 2012 in the spring of 2013. The federal US agency responsible for implementing the regulations of the Sunshine Act, Centers for Medicare & Medicaid Services (CMS), is anticipated to publish nal regulations during the rst half of 2012, with the expectation that data would be required to be collected during the second half of 2012.

current policies take shape and new policies emerge, it is imperative that companies act quickly to implement and deploy solutions that streamline processes and reduce the administrative burden of compliance reporting.

Many companies continue to struggle with data discrepancies and ine cient reporting models..
As a result of the immense pressure from their strict enforcement model, US Life Sciences companies have outsourced internal spend tracking to leading third-party providers. These solutions manage the impact of legislation by consolidating disparate data into a single, convenient source that relieves internal resources in order to maximize commercial e ciency. Presently, third-party providers enable companies to more easily track HCP spend data and quickly pinpoint irregular nancial activity allowing companies to devote more time to develop relationships with invaluable stakeholders. Cegedim Relationship Managements newest compliance survey nds that Europe is inarguably making measurable strides to enforce compliance internally. In direct comparison with Cegedim Relationship Managements 2010 survey, Europe is signi cantly improving their cross-organisational involvement in marketing and promotional spend compliance. For Europe, its no longer a question of when increased enforcement models will arrive, but how quickly companies can adapt their systems and innovate processes to transform the duty of compliance into a competitive business strategy.

their companies ability to comply with transparency requirements is either Good or Excellent.
In essence, these new federal obligations add to a complex network of existing state laws that already regulate pharmaceutical, biotech, and medical device organisations marketing, sales, employee, and R&D expenditures. Thus, companies have already made systemic alterations in response to the federal law, according to Cegedim Relationship Managements recent US survey. Of those respondents who reported using spreadsheets, 77% plan to move to an automated solution. The responsibility of the Sunshine Act has undoubtedly set the US apart in terms of regulatory compliance. And in a market that has been sharply regulated for nearly a decade, companies long ago committed to achieving operational compliance. This involves implementing transparency initiatives at all levels of the business structure and ensuring compliance by monitoring each possible aspect of reportable spend data. Moreover, the solutions required to meet these strict standards are creating valuable synergies in the US through increased collaboration and communication and, in turn, enable companies to achieve inherently better commercial productivity. Responses from Europes 2011 survey reveal wholehearted con dence in their ability to prosper in the new regulatory landscape. But con dence alone does not guarantee results, as many companies continue to struggle with data discrepancies and ine cient reporting methods. As

87%

of respondents rate

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Key Findings
Pharma, medical device, and biotech companies are rounding the corner to better compliance by increasing cross-organisational involvement and are fully committed to enforcing corporate standards. Involvement in ensuring compliance has increased signi cantly over the past year for all activities with the exception of data processing. More than 9 out of 10 respondents (94%) say that their company enforces corporate standards for spending on HCPs. Over one-half (53%) indicated that their company already has a project team in place to address compliance issues.
Figure 2: Index - pg.17 Satisfying Reporting and Disclosure Requirements
Manually / with spreadsheets Internal software system Third party solution We are not satisfying them Other, please specify

As with all sizeable industry transitions, there are signi cant shortcomings particularly with data management and a heavy reliance on ine cient reporting mechanisms. The most signi cant process challenge for respondents is matching and establishing unique identi cation of a healthcare practitioner from expense data sources. 2011 saw a signi cant increase in the use of manual and Excel spreadsheet reporting methods. Respondents anticipate increased regulatory legislation in Europes near future, and a majority plan to devote resources and implement reporting solutions accordingly. Slightly less than two-thirds (64%) of the respondents surveyed expect promotional spend tracking in Europe to reach US levels in one to three years. More than one-half of the respondents (52%) anticipate that investments in solutions and resources that account for aggregate spend transparency will increase over the next year. Almost two-thirds of respondents (64%) feel that implementing a unique spend data reporting and disclosure solution is an absolute requirement.
Figure 3: Index - pg.18 Importance of Implementing a Unique Spend Data Reporting and Disclosure Solution

44% 43% 7% 4% 1%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

A valuable di erence in the second annual survey is the momentum gained through strong senior management support and the added con dence required for longterm growth through current compliance initiatives. Nearly 9 out of 10 respondents (87%) report that their senior management understands and supports their e orts in transparency reporting. Almost 9 out of 10 respondents (87%) feel con dent that their company is either excellently (30%) or well (57%) capable of meeting transparency requirements. Three-quarters of respondents (73%) are very or somewhat con dent in their companies ability to implement and build rules for transparent processes.

2% 32%

64%
Its absolutely a requirement It would be nice but its not necessary

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Introduction
In combination with government initiatives aimed at cutting healthcare costs, the increased enforcement of anti-corruption and anti-bribery regulations comes at an inconvenient time for the European Life Sciences industry. Since doctors throughout Europe are nding nearly all their prescribing power usurped, pharmaceutical organisations must recruit all available help to address the increasingly complex regulatory landscape. The UK Bribery Act and the Foreign Corrupt Practices Act (FCPA) are not the only strict regulations facing the pharmaceutical industry in Europe. Following the amendment of the Association of the British Pharmaceutical Industry (ABPI) Code of Practises in 2010, France adopted a new transparency law very similar to the US Sunshine Act in December 2011 broadening the category of covered recipients that must report. Further, the Netherlands is in the process of enacting new transparency rules that are likely to arrive this year. And the European Federation of Pharmaceutical Industries and Associations (EFPIA) is working to update its Codes of Practises, calling for greater transparency at all levels of the Pharmaceutical business structure in Europe. This multi-national shift towards improved reporting clarity raises the bar even higher for organisations and, in turn, increases the potential for a breach in compliance. These acts have grim implications: pharmaceutical, medical device and biotech companies can face unlimited nes and, for an individual who is convicted, up to 10 years in prison. In recent history, one of the top-10 biopharmaceutical companies was ned over 1 billion dollars for failing to maintain an accurate book of records. Yet, how exactly are senior industry executives interpreting this eventual shift into a stricter enforcement model? In the second annual Cegedim Relationship Management report, the results reveal senior managements overwhelming support and understanding (87%) of their companys e orts It is apparent that these responses do not add up. There exists an evident disjoint between the healthy majority that fully anticipate increased regulation and the one-third of respondents that believe investments in solutions and resources will stay the same despite the shift toward greater transparency. The discrepancy between companies committed to investment and those unprepared to address the reality of increased regulation reveals an alarming trend. The Life Sciences industry must collectively embark on solutions that seamlessly incorporate compliance into the business model before the issue becomes a legal and nancial liability. The windfall of insight from the extensive US gift laws which require tracking on nearly any marketing spend over 10 dollars is most likely accountable for the evolving perceptions of European respondents. Over one-half of the respondents (52%) anticipate increasing investments in solutions and resources over the next year, while one-third (34%) believe that investments will remain the same. Nearly two-thirds (64%) of the respondents surveyed expect promotional spend tracking in Europe to reach US levels in one to three years. in transparency reporting.
Figure 4: Index - pg.18 Senior Management Attitudes toward Transparency Reporting

9%

1% 3%

Understand the issues and support my e ects Aware of issues but dont support Unaware of issues

87%

Other, please specify

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This multi-national shift towards improved reporting clarity raises the bar even higher for organisations
However, Europe is making signi cant improvements. Speci cally, companies are involving a wide range of departments in the shared goal of ensuring compliance. And in comparison to the 2010 survey that revealed an unbalanced focus on only sales and marketing departments, 2011 illustrates major progress toward a more crossorganisational approach to the current and future enforcement model. Europe is signi cantly ahead of the game by making wholesale internal changes in a very brief timeframe. By implementing cross-system compliance initiatives, companies will now drive the holistic bene ts of increased collaboration and communication. Furthermore, respondents companies allocate the majority of resources to those involved in standard operating processes (SOPs), process design and compliance implementation (78%). Additionally, processes that receive in-depth involvement include report and review approval (59%), tracking of legislative updates (53%), and reporting generation/disclosure (51%).
Figure 5: Index - pg.19 Involvement with Locally Mandated Marketing and Promotional Spend Compliance
SOPs and process de nition and implementation Report review and approval Tracking legislative updates Report generation / disclosure Processing of data Vendor management Vendor selection Other, Misc.

What do these positive departmental distributions mean in terms of Europes future in the Life Sciences? Namely, in keeping with the European culture of self-policing, companies are proactively breaking down departmental silos not only to improve transparency but to drive work ow across the enterprise. The transition from last years unbalanced sales and marketing orientation to a well-rounded cross-organisational model is the foundation for true operational compliance.

78% 59% 53% 51% 42% 33% 26% 6%

0% 20% 40% 60% 80%

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On the Road to Compliance

With the recent strides to increase transparency and prepare for upcoming regulations, are respondents feeling con dent in their companys ability to face the future? When asked about their companys ability to meet current transparency requirements, an overwhelming majority of respondents (87%) selected either good or excellent a signi cant increase from last years results.
Figure 6: Index - pg.19 Companys Ability to Meet Transparency Requirements Today
Excellent Good Fair Poor

Critically, European companies are showing con dence in a currently under-regulated market that is quickly set to change. This con dence in existing internal reporting systems and methods will wane as evolving regulations demand more from pharmaceutical organisations. Overwhelming con dence will not drive companies to reinvent their technology in the face of increased transparency acts but will encourage them to remain complacent until ine ective internal reporting becomes a systemic issue. And as can be seen by their current state of readiness, respondents internal systems have not yet proved themselves. Thus, companies will soon start experiencing a certain apprehension, comparable to their US counterparts, which could prove to be a valuable driver for change if Europes con dence levels respectively decrease. For example, in the US, less than one-third (31%) of respondents were very con dent that their transparency reporting is fully compliant, according to Cegedim Relationship Managements recent US aggregate spend survey. The US operates under increasing pressure to demonstrate high levels of compliance, especially since 2012 will be the rst year for which all marketing spend will be reported to the US Department of Health and Human Services (in early 2013). And as a result, 64% of US respondents in the recent survey expected to increase investments in solutions and resources devoted to aggregate spend reporting and compliance over the upcoming year. US companies are in an analytical stage to discover best practises through the use of the latest technology. Due to this pivotal transition period, they cannot yet develop con dence in systems that are perpetually being optimized to provide better compliance outcomes in a heavy-handed regulatory enforcement landscape. Europe cannot yet compare to the mature US enforcement model, where companies are constantly

30% 57% 11% 3%

The question that Life Sciences organisations should be asking themselves is, Is this a positive trend? Not necessarily. Speci cally, when respondents were asked to address their current state of readiness for the upcoming compliance legislation, the majority of respondents selected either analysing needs (39%) or waiting for more European laws (16%). With the pharmaceutical regulatory structure being newly built in Europe, companies are showing high levels of con dence in systems that are not translating into actual readiness for Europes foreseeable future.
Figure 7: Index - pg.20 Current State of Readiness for Transparency Requirements
Collecting required compliance data

34%

41%

Analysing needs

39% 36% 16% 16%

0% 10% 20% 30% 40% 50%
Country Head O ce Corporate / Regional Headquarter

Waiting for more European laws

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re ning technologies to meet the current requirements of the Sunshine Act. But with legislation to match the US already in place in many parts of Europe, companies must use any apprehensions concerning their regulatory future to drive investment in realistic compliance solutions at global, regional, and local levels. Moreover, Europeans will face a more diverse regulatory environment than the US, as in many cases each country has its own operational standards for reporting pharmaceutical marketing spend. For example, spending greatly depending on the country 6 in the UK, 30 in Spain, or 100 zloty in Poland. Life Sciences companies marketing and promotional spending but also constantly standards. caps on small gifts to healthcare practitioners di er

Furthermore, companies are applying these corporate standards more extensively than in the past with three out of 10 respondents (30%) selecting all items listed when asked which types of data fall under enforcement standards. Additionally, over one-quarter (22%) of respondents say that standards are being applied to speaker fees; and around one-tenth of respondents say that standards are being applied to consultancy services (12%), continuing medical education (12%), promotional meeting costs (7%), and clinical trials (6%).
Figure 9: Index - pg.21 Types of Data that Standards Are Applied To
All items listed

in Europe must not only track a complex matrix of keep track of and uphold each countrys unique reporting

Life Sciences companies in Europe must not only track a complex matrix of marketing and promotional spending

but also constantly keep track of and standards.

European

uphold each countrys unique reporting

Despite the regional diversity in transparency rules, companies are championing enforcement standards of spending on all HCPs and

external partners. Over three-quarters of respondents external partners and internal data; and less than one-

(76%) enforce corporate standards that apply to all fourth (18%) responded that their enforcement has limited extent. The response of those surveyed that leverage fully enforced standards increased by 14% when compared to 2010 results.
Figure 8: Index - pg.20 Enforcing of Company Spending for HC Professionals
Yes, applies to all the external partners and internal data Yes, but applies only to some external partners and internal systems No, we do not have standards No, but we are in the process of de ning ore No, looking for a vendor to provide a solution

C O M
Speaker fees Consultancy services

30% 22%

12%

Continuing Medical Education

12%

Promotional Meeting Costs Clinical Trials

7%

6%

Participation in Advisory board

3%

Other, please specify

3%

P L Y
internal
76% 18% 3% 1% 1%
0% 10% 20% 30% 40% 50% 60% 70% 80%

0%

5%

10%

15%

20%

25%

30%

35%

The US and Europe operate very di erently based on their viewpoints on compliance. The heavy-handed enforcement model in the US is partly a product of their business climate. With Europes self-policing and entrepreneurial spirit, companies may be better suited to quickly derive bene ts from the compliance process. Given its evident progress in self-enforcing corporate regulations, Europe is well on its way to leveraging the opportunity to optimize commercial productivity especially if companies can continue to drive innovation throughout the current market shift.

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Attaining Operational Compliance

With companies con dence, involvement, and internal enforcement on a signi cant rise, does this trend correlate with a willingness to commit to the suite of available compliance solutions that are providing real results in the US and globally? The answer to this question uncovers a particularly unusual trend. When asked to predict new investments in solutions and resources for the upcoming calendar year, over half (52%) of respondents believe that investments will increase. On a more speci c question about the importance of implementing a spend data reporting solution, a large majority (64%) of those surveyed believe it to be an absolute requirement to their current business. This suggests that a signi cant number of companies are either operating on integrative compliance solutions or are in the process of implementing them.
Figure 10: Index - pg.21 Anticipated Investments in Solutions & Resources over the Next Year
Stay the same

So what exactly can be taken away from this increasingly internalized trend in compliance? Could companies be resting on the old laurels of reporting methods that have proved successful in the past? Are they exercising excessive caution in a cost-contained economy that impedes their ability to invest in third-party provider solutions? This disconcerting shift to traditional mechanisms may jeopardize the investments and resource allocation that Europe has already made. Over one-half (53%) of surveyed organisations have proactively instituted project teams to internally manage compliance. Further, as mentioned, respondent companies have recently invested in the labour-intensive task of redistributing the responsibility of compliance throughout their entire business structure. At a time when the industry must reconcile every promotional expense, companies must not misuse precious internal resources on time-consuming reporting practises that are antiquated and unsustainable. If companies continue down this path in the face of

34% 52% 12%

0% 10% 20% 30% 40% 50% 60%

Increase

current and upcoming regulations, vital resources will be consumed by the manual tracking of all types of customer interactions from everyday sampling, to implementing patient co-pay assistance programs, to o ering continuous medical education (CME) to a physician. So just how long does Europe have to reverse this trend? Looking to the US model, it is evident that companies have already made this transition, with less than onethird of respondents (28%) still using manual reporting systems to satisfy transparency requirements, according to the Cegedim Relationship Management 2011 survey. And with European respondents in agreement that promotional spend tracking will reach US levels in as little as 12 months, there exists a brief timeframe to

Decrease

Surprisingly, nearly all companies surveyed are satisfying reporting and disclosure requirements manually or through the use of Excel spreadsheets (44%) or through internal software reporting systems (43%). Less than one-tenth (7%) of respondents are using a third-party solution to ful l reporting requirements. And although the use of internal reporting is down from last year, that gain went directly back to the exhaustive practise of both manual and Excel spreadsheet reporting.

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streamline processes by leveraging the proven bene ts of deploying advanced technology and outsourcing compliance to best-in-class solution providers.
Figure 11: Index - pg.22 Expected Timeline for Promotional Spend Tracking in Europe to Reach US Levels
Less than 1 year 1 to 3 years 3 to 5 years Dont know

7% 64% 16% 14%

The most recent innovations in solving compliance reporting challenges are perfectly suited to address European organisations aggregate spend tracking across complex multi-national business models. And with native integration into regional and global business structures, the most groundbreaking solutions alert users of suspicious nancial transactions, speci c to each countrys standards, to streamline the monitoring process and reduce the administrative burden of tracking new legislation. Furthermore, the leading providers of breakthrough compliance systems deliver unparalleled exibility to capture, control, and share databases. Todays thirdparty providers feature compliance functionalities that are fully compatible with Customer Relationship Management (CRM) solutions to promote optimal data accuracy and feature continuous updates from global healthcare reference databases. These innovative solutions feature intuitive interfaces that allow end users to adjust and edit databases with unparalleled ease. The import of data is now simpler and allows for multiple entry points, such as through integration with other business applications. Any new data entered is fully controlled through detailed audit trails and monitored by automated quality control reporting. These solutions have been created and re ned with the expertise of providers that are already accustomed to a heavily regulated environment. As increased regulation becomes a reality and compliance risks mount in the months ahead, Europe can transform the current liability of manual reporting into a valuable growth opportunity.
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Drivers for Change

What facets of compliance are respondents pointing out as the most pressing drivers for change and the biggest pain points? The majority of respondents perceive system and process shortcoming as well as errors in internal healthcare databases to be the greatest obstacles for this year.
Figure 12: Index - pg.22 Issues A ecting Promotional Spend Compliance
Systems / Process shortcoming Lack of understanding policy Poor record keeping or data entry errors Not a current priority No Issues Complying Other, please specify

such as marketing, research, salaries, and honoraria data, which are then consolidated into a single customer view. To alleviate the uncertainty in achieving crossenterprise transparency, US companies have invested in next-generation solutions to automatically generate reports, deliver due-date reminders, and continually update regulations and report requirements.
Figure 13: Extent of Challenges for Processes
Matching and establising unique identi cation of a Healthcare Professional Managing incomplete spend and customer information Identifying all data sources Reporting and disclosure management

Index - pg.23

42% 25% 21% 17% 7% 1%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

15% 10% 12%

37% 33% 29%

11% 28% 11% 24%

0% 10% 20% 30% 40% 50% 60%
Challenging Very Challenging

Regulatory analysis and monitoring

Ine ciencies with processes comes as little surprise in the second annual compliance report. The increase of manual reporting systems and the use of Excel spreadsheets to manage requirements, both from the UK Bribery Act and the FCPA, directly correlate to 42% of respondents feeling unsatis ed with their current reporting method. Those surveyed cite a lack of policy understanding (25%) and poor record keeping or data entry errors (21%) as their second and third largest pain points a ecting promotional spend compliance. With two of the top three concerns regarding inabilities to manage data e ectively, organisations must urgently consider enhancing and upgrading their existing aggregate spend reporting systems. Presently, European companies are adding an unnecessary level of complexity to the already taxing process of compliance. According to the US compliance survey, many

Persistent issues with reconciling databases have continued since the rst annual compliance report in nd it di cult to Europe. Speci cally, respondents

match and establish unique identi cation of healthcare practitioners from an increasing multitude of expense data sources with over one-half of respondents (52%) considering this process to be either very challenging or challenging. When collating spend information from diverse and numerous sources from across a companys structure, one of the biggest challenges is incomplete data. A company that cannot pinpoint a healthcare practitioner from a group of expense data sources will be hindered by inaccurate monitoring and reporting running the risk of a compliance breach. The survey reveals that data challenges extend beyond establishing unique customer identi cations, as just under one-half (43%) of respondents view managing

respondents currently derive game-changing bene ts from aggregate spend and disclosure reporting solutions that leverage superior technology. Todays innovative solutions seamlessly integrate promotional expenses,

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incomplete spend and customer information, identifying all data sources (41%) and reporting/disclosure to management (39%) as either very challenging or challenging. Ensuring that customers are accurately identi ed is a signi cant challenge faced by both European and US companies. As todays companies manage global customer databases that draw from multiple sources, the task of creating a unique identi cation for each healthcare practitioner becomes increasingly challenging. Customer data will often be incomplete and recorded di erently in each business unit. As a result, US companies are relying more on Customer Relationship Management (CRM) solutions powered by comprehensive HCP databases to help collect and verify complex, multi-source customer data.

The creation of a Master Data Management (MDM) system increases accessibility across the enterprise and minimizes bad data in order to mitigate the risk of compliance breach.
Maintaining intelligent databases continues to be a pressing challenge for the global Life Sciences market. A key investment for US companies in recent years has been Master Data Management (MDM) systems, which improve transparency by providing a single master view of databases for enhanced analysis and reporting. The creation of MDM increases accessibility across the enterprise and minimizes bad data in order to mitigate the risk of a compliance breach. With MDM yet to be optimized in the US business model, the adoption of this solution could provide a distinctive opportunity for Europe to further its selfenforcing strategies. In combination with Aggregate Spend Transparency and CRM solutions, MDM creation would fully optimized their databases while helping to leverage the sum of Europes nancial commitments that have been made to improve transparency.

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Conclusion
Restoring the perception of the Life Sciences industry will be no simple task. Companies have taken the essential steps to re-establish partnerships with healthcare providers and foster new trust in patients. Yet 2012 nds legislators throughout Europe forging ahead with transparency laws that impose criminal charges and unlimited nes while many organisations are still developing their strategies. Another bene cial path that Europe may advance toward is employing breakthrough Life Sciencesspeci c, Customer Relationship Management (CRM) solutions. These IT solutions, when combined with Aggregate Spend Transparency solutions, feature actionable alerts that notify end users when a certain HCP is reaching a proposed payment threshold depending on the myriad of compliance standards within Europe. And with many companies in Europe already operating on CRM solutions, adopting new functionalities geared toward compliance will help automate the process of searching for suspect nancial records. But most of the groundwork for operational compliance practises has already been done. The second annual survey reveals that a majority of European companies have very quickly enacted cross-organisational corporate standards. 2012 represents a call to action for the Life Sciences industry in Europe now is the time to commit to transparency by investing in solutions that will streamline the compliance process. Leveraging bestin-class Aggregate Spend Transparency technology will not only provide competitive commercial gains but also mitigate the dire risk of negative publicity that a violation would produce. Since Europe has one to possibly three years to prepare, the upcoming year may bring about holistic changes to their business structure. One can draw endless comparisons to the US enforcement model, but those companies exist in a separate market in the throes of heavy regulation. Europe has the brief advantage of strategizing for the future. When all is Europe must quickly engage a combination of new technologies and improved organisation at all levels of promotional and marketing spending. As the cost of sustaining manual reporting has become even higher, it is imperative for companies to nd the right solution to automate data capture and ensure compliance at all levels of their business structure. With increased tracking of aggregate spend data already becoming an everyday function of Europes Life Sciences industry, it is time to align with business intelligence solutions that have a proven track record of success in furthering global compliance. Furthermore, the creation of MDM will provide an accurate master view of customers in order to organise sales and marketing initiatives and lay the foundation for operational compliance. Especially as many companies must consolidate data from multiple customer sources, MDM systems serve as a centralized source that veri es data quality to promote holistic accuracy. said and done, European companies will create their own path to integrate more stringent regulations into their business model.

2012 represents a call to action for the Life Sciences industry in Europe now is the time to commit to transparency by investing in solutions that will streamline the compliance process.

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KNOW

PERFORM

PROMOTE

COMPLY

EVALUATE

SUPPORT

Cegedim Relationship Management is the leading global provider of Regulatory Compliance solutions for the Life Sciences industry. The company provides the most comprehensively packaged o ering, enabling companies to meet present and future business requirements and objectives, and to achieve rewarding and lasting relationships with customers. Solutions include:

Contact Cegedim Relationship Management today for more information. www.cegedim.com/rm info@cegedim.com

Authors: Bill Buzzeo Vice President & General Manager, Global Compliance Solutions Cegedim Relationship Management william.buzzeo@cegedim.com 1425 U.S. Highway 206, Bedminster, NJ 07921, USA Tel: +1 908.443.2000 Guillaume Roussel Vice President, Compliance Solutions EMEA Cegedim Relationship Management guillaume.roussel@cegedim.com 127-137 rue dAguesseau, 92100, Boulogne Billancourt, France Tel :+33 1 49 09 22 00

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Conclusion Recommended Reading

2011 EU Market Access Survey White Paper - June 2011 http://crm.cegedim.com/Docs_Whitepaper/Data/EU_Market_Access_Survey_Rpt_June_2011.pdf 2011 European Trends & Challenges in Customer Data Management within the Life Sciences Industry- June 2011 http://crm.cegedim.com/Docs_Whitepaper/Data/EU_Cust_Data_Mgmt_Survey_Rpt_June_2011.pdf 2011 US Trends in Aggregate Spend and Disclosure Reporting Compliance March 2011 http://crm.cegedim.com/Docs_Whitepaper/Compliance/Aggregate_Spend_Trends_Disclosure_Reporting_Whitepaper_May2011.pdf 2010 European Trends in Aggregate Spend, Transparency and Disclosure November 2010 http://crm.cegedim.com/Docs_Whitepaper/Compliance/2010_European_Trends_Compliance_Whitepaper.pdf

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Chart Index
Figure 1:
Impact of Anti-Corruption Legislation

Increased number of countries requiring greater transparency Changes to current sales and marketing practices Increased resources required to manage transparency Commercial advantage of improved reputation Bene t the business through reduced cost due to greater measurement and visibility

70% 46% 45% 29% 26%

0% 20% 40% 60% 80%

Figure 2:

Satisfying Reporting and Disclosure Requirements.

Manually / with spreadsheets Internal software system Third party solution We are not satisfying them Other, please specify

44% 43% 7% 4% 1%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

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Chart Index
Figure 3:
Importance of Implementing a Unique Spend Data Reporting and Disclosure Solution.

2% 32%

64%
Its absolutely a requirement It would be nice but its not necessary

Figure 4:

Senior Management Attitudes toward Transparency Reporting

9%

1% 3%

Understand the issues and support my e ects Aware of issues but dont support Unaware of issues

87%

Other, please specify

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Chart Index
Figure 5:
Involvement with Locally Mandated Marketing and Promotional Spend Compliance
SOPs and process de nition and implementation Report review and approval Tracking legislative updates Report generation / disclosure Processing of data Vendor management Vendor selection Other, Misc.

78% 59% 53% 51% 42% 33% 26% 6%

0% 20% 40% 60% 80%

Figure 6:

Companys Ability to Meet Transparency Requirements Today

Excellent Good Fair Poor

30% 57% 11% 3%

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Chart Index
Figure 7:
Current State of Readiness for Transparency Requirements
Collecting required compliance data

34%

41%

Analysing needs

39% 36% 16% 16%

0% 10% 20% 30% 40% 50%
Country Head O ce Corporate / Regional Headquarter

Waiting for more European laws

Figure 8:

Enforcing of Company Spending for HC Professionals.

Yes, applies to all the external partners and internal data Yes, but applies only to some external partners and internal systems No, we do not have standards No, but we are in the process of de ning ore No, looking for a vendor to provide a solution

76% 18% 3% 1% 1%
0% 10% 20% 30% 40% 50% 60% 70% 80%

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Chart Index
Figure 9:
Types of Data that Standards Are Applied To
All items listed Speaker fees Consultancy services Continuing Medical Education Promotional Meeting Costs Clinical Trials Participation in Advisory board Other, please specify

30% 22% 12% 12% 7% 6% 3% 3%

0% 5% 10% 15% 20% 25% 30% 35%

Figure 10:

Anticipated Investments in Solutions & Resources over the Next Year.

Stay the same

34% 52% 12%

0% 10% 20% 30% 40% 50% 60%

Increase

Decrease

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Chart Index
Figure 11:
Expected Timeline for Promotional Spend Tracking in Europe to Reach US Levels

Less than 1 year 1 to 3 years 3 to 5 years Dont know

7% 64% 16% 14%

Figure 12:

Issues A ecting Promotional Spend Compliance.

Systems / Process shortcoming Lack of understanding policy Poor record keeping or data entry errors Not a current priority No Issues Complying Other, please specify

42% 25% 21% 17% 7% 1%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

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Chart Index
Figure 13:
Extent of Challenges for Processes
Matching and establising unique identi cation of a Healthcare Professional Managing incomplete spend and customer information Identifying all data sources Reporting and disclosure management Regulatory analysis and monitoring

15% 10% 12%

37% 33% 29%

11% 28% 11% 24%

0% 10% 20% 30% 40% 50% 60%
Challenging Very Challenging

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February 2012

compliance@cegedim.com

and Disclosure

2011 European Trends in

Aggregate Spend, Transparency

Cegedim SA - Cegedim Relationship Management Business Unit - RCS Nanterre B 350 422 622 - 137 rue dAguesseau - 92100 Boulogne Billancourt - France - WP-2012-02-EUCOMP-GL-A

For more information, please contact

www.cegedim.com/eucompliance