This session, "Assessing Adherence to the PhRMA Code" was presented at the 10th Annual Pharmaceutical Compliance Congress, hosted by CBI.

1. Assessing Adherence
to the PhRMA Code
Workshop C
January 30, 2013

2. Introductions
• Eve Costopoulos - Vice President, Corporate Ethics and
Compliance/Internal Audit, Eisai
• Marjorie E. Powell - Senior Assistant General Counsel, PhRMA
• Paul Silver - Practice Leader, Huron Life Sciences
• Marci Juneau - Director, Huron Life Sciences
Eve Marjorie
Paul Marci
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3. Our Session
• PhRMA’s Perspective on Assessing Adherence to the Code
• Providing Insights from Industry on Adherence
• Providing Guidance into the Independent Verification Review Process
• Open Questions for Panel
• Challenges You Are Seeing
• Action Items
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4. PhRMA Code
General Overview of Code
The PhRMAceutical Research and Manufacturers of America (PhRMA) represents research-based
pharmaceutical and biotechnology companies.
The PhRMA Code on Interactions with Healthcare
Professionals was created to reinforce the intention that
PhRMA members’ interactions with healthcare professionals
(HCPs) are professional exchanges designed to benefit
patients and to enhance the practice of medicine. The Code
is based on the principle that an HCP’s care of patients
should be based, and should be perceived as being based,
solely on each patient’s medical needs and the HCP’s
medical knowledge and experience.
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5. PhRMA’s Perspective on Assessing
Adherence to the Code
PhRMA Code on Interactions with Health Care Professionals
• Code has 15 Provisions
• Agree to sign the PhRMA Code: Commit to comply with the PhRMA Code
– Need not be a PhRMA member company to sign the Code
• Submit name and contact information for Compliance Officer
• Yearly certification that the company has policies and procedures in place to
foster compliance with the Code
• Certify that the company:
– Has policies
– Has trained staff
– Has a system to monitor compliance
– Has a system to address non-compliance
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6. PhRMA’s Perspective on Assessing
Adherence to the Code
• External verification that the company has policies and procedures in place to
foster compliance with the PhRMA Code
– External verification need not be solely for PhRMA Code purposes
– Do not need to submit the findings or report
• PhRMA Code has evolved over the years
– Found code from the 1960s
– Code most recently revised in 2008, and effective in 2009
• Several states require compliance with the PhRMA Code or a similar state
code
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7. Industry Insight on Adherence to the Code
Overlap with State Requirements
• Nevada
– “Does your company use one of the two model codes of conduct [Code of Interactions
with Healthcare Professionals by PhRMA] or Code of Ethics on Interactions with Health
Care Professionals by AdvaMed (for manufacturers or wholesalers of devices or
appliances)] without modification?”
• Massachusetts
– “Our company has adopted a program to routinely train appropriate employees, including,
without limitation, all sales and marketing staff regarding the marketing code of conduct,
as described in 105 C.M.R. 970.000.”
– “Our company has policies and procedures in place for conducting investigations into any
and all non-compliance with 105 C.M.R. 970.000, taking corrective actions in response to
all non-compliance…”
• California
– Annual Declaration of Compliance
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8. Industry Insight on Adherence to the Code
External Verification Guidance
As of January 1, 2009, the revised PhRMA Code states that all companies (PhRMA
members and non-members) that interact with HCPs about pharmaceuticals should
adopt procedures to assure adherence to the Code including its 15 sections regarding
various aspects of pharmaceutical company interactions with HCPs.
The PhRMA Code encourages member companies to seek external verification
periodically – ideally at least once every three years – to evaluate whether the company
has policies, procedures, or guidelines in place to foster compliance with the Code.
In May 2012, PhRMA published external verification guidelines that outline the
organization’s expectations as they relate to confirmation of a company’s compliance
with the Code.
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9. Industry Insight on Adherence to the Code
Credentials of External Verification
The Company should ensure that the entity it selects to conduct an external verification
of its policies and procedures in connection with the PhRMA Code possesses sufficient
expertise, objectivity, and independence from the Company to be credible in
performing the verification function.
• Objectivity means being independent in fact, maintaining an attitude of impartiality, and
having intellectual honesty.
• Independence means that the external verification entity and the person or persons who
conduct the verification evaluation must be free from personal, external, and organizational
impairments to independence.
• An external entity can be independent and objective even if it currently provides or has
previously provided other advice and services to the Company. The external verifying entity
can include outside counsel, external auditors, or another entity that has the relevant
knowledge and expertise to credibly perform the verification function.
– It is the responsibility of the Company and the verifying entity to ensure that any other interactions
between the Company and the entity will not compromise the entity’s ability to perform a full and fair
external verification of the Company’s policies and procedures in connection with the PhRMA Code.
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10. Industry Insight on Adherence to the Code
Purpose and Submission of External Verification
• The external verification need not be obtained by the Company solely for the purpose
of meeting the external verification criteria in the PhRMA Code. As long as the
verification satisfies the criteria set out in this guidance, it will be considered sufficient
to achieve recognition by PhRMA, even if the verification was originally sought for
another purpose.
• The Company need not submit the detailed findings or report of the external
verification entity to PhRMA, but may achieve recognition by PhRMA for satisfying
the external verification criteria if it submits a statement that it has successfully
completed the verification process.
– The statement must be signed by the Company's compliance officer responsible for the
US pharmaceutical business and should indicate the date that the external verification
process was completed.
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11. Industry Insight on Adherence to the Code
Addressing Observations
• Discussion with company that performed external verification of adherence to the
PhRMA code:
– Come to final conclusion and decisions on list of observations (and
recommendations) from the external report including those that need to be
addressed by company
• Internally review observations and recommendations:
– Can include Compliance, relevant stakeholders (business), Legal, etc.
– Ensure buy-in on process and policy changes
• Make revisions to appropriate documentation, policies, processes, etc.
• Socialize changes throughout the Company through relevant communication and
training
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12. Independent Verification Review Process
External Verification Requirements
The external verification entity should confirm that the Company has policies,
procedures, or guidelines in place to foster compliance with the PhRMA Code:
I. Policies, procedures, or guidelines in place that address the topics covered in the 15 sections of the
PhRMA Code
II. Made any necessary revisions to relevant policies, procedures, or guidelines to reflect requirements
of the PhRMA Code and periodically evaluates the need for additional updates or revisions
III. Provided relevant company employees with information/training on the requirements of the PhRMA
Code and the company periodically evaluates and addresses the need to provide additional training
IV. Considered, planned, and implemented the steps it will take to monitor compliance with the
requirements of the PhRMA Code on an ongoing basis
V. Considered, planned, and implemented the steps it will take to address reported incidents of non-
compliance with the requirements of the PhRMA Code
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13. Independent Verification Review Process
Review of 15 Areas of PhRMA Code
1. Basis of Interactions 8. HCPs and Formularies/Clinical Practice
2. Informational Presentations and Meals Guidelines
3. Entertainment & Recreation 9. Scholarships & Educational Funds
4. Support for CME 10. Non-Educational and Practice-Related Items
5. Support for Third-Party 11. Educational Items
Educational/Professional Meetings 12. Prescriber Data
6. Consultants 13. Independence & Decision Making
7. Speaker Programs/Speaker Training 14. Training & Company Reps
Meetings 15. Adherence to the Code
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14. Independent Verification Review Process
Key Operational Considerations
Operational areas to consider for PhRMA Code External Verifications by Independent Organization:
Review • Collect and review the following relevant documents:
Relevant – Policies, procedures, guidelines, work instructions, etc.
Documents/ – Training materials
Information – Other relevant documents
– Process documents for monitoring and corrective action plans
• These documents will help the Company understand the key written
controls and key processes to ensure compliance with the PhRMA Code.
• Previous and updated versions of the documents will provide insight into
necessary revisions made to address any changes needed to be compliant
with the PhRMA code.
• If applicable, an additional review of a Company’s Corporate Integrity
Agreement (CIA) to determine areas of overlap for those that are already
addressed in applicable areas or tested by the Independent Review
Organization (IRO)
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15. Independent Verification Review Process
Key Operational Considerations
Operational areas to consider for PhRMA Code External Verifications by Independent Organization:
Conduct • Conduct interviews with key stakeholders who play a role in
Interviews establishing/revising the relevant:
with Key – Policies and procedures
Stakeholders – Processes
– Training materials
– Other documentation reviewed
• Interviews may provide insight into:
– Policies or unofficial practices that are not captured
– Correctly captured in existing relevant policies, procedures, training materials,
and other relevant documents
– Areas of PhRMA code not addressed by company or concerns on certain
areas
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16. Independent Verification Review Process
Key Operational Considerations
Operational areas to consider for PhRMA Code External Verifications by Independent Organization:
Conduct • Assess whether or not the Company has met the PhRMA Code Verification
Assessment Requirements as outlined in the guidance released by PhRMA in May 2012
& Creating • Create observations based on any areas that may not meet the five
Observations requirements of the verification:
– These observations may include policies and procedures that are missing key
information or process requirements.
– Any recommendations on deficiencies in training, monitoring, or corrective action
should be noted.
Provide • Independent Reports should include:
Independent – The steps review took to verify the company’s adherence to the PhRMA Code
Report – The relevant policies, procedures, training materials, and other documents
reviewed
– Interviews conducted
– Observations associated with the external verification
– Recommendations (if requested)
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17. Open Questions for Panel
Open Questions for PhRMA?
• What constitutes "sufficient expertise, objectivity, and independence” from the Company?
– Current IRO? Former IRO? External auditors? Internal audit group? Law firm? Consultant?
– If a current IRO is considered to be "objective and independent," does the IRO need to perform additional
activities outside of its current IRO activities or can it rely upon its IRO role to provide the verification?
– Can a series of activities performed throughout a year by a number of different external parties be relied upon by
a Company to provide verification?
• What does it mean to be "free from personal, external, and organizational impairments to
independence?”
• What types of interactions between Company and entity might be viewed as compromising the
entity's ability to perform a full and fair external verification of Company's policies and procedures?
• What is the penalty for non Compliance with PhRMA verifications (internal and external)? Does a
company get kicked out of PhRMA for not complying?
• When are external verifications due?
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18. Open Questions for Panel
Questions to Audience
• Who has had an independent external verification completed or is in the process of a
verification?
• What type of company performed your independent verification?
• Have you made any specific assessment around independence of the external
company performing the verification? What criteria did you take into consideration to
establish independence?
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19. Action Items
Things to Consider Yes No Not Sure
1. Have all relevant employees been trained on the PhRMA Code?
2. Have we completed the 2012 verification?
3. Has our CEO and CCO signed the completed annual verification?
4. Have we submitted our first external verification?
5. Who will own observations coming out of external verification?
Questions?
Marci Juneau
(678) 672-6163
mjuneau@huronconsultinggroup.com
Eve Costopoulos Marjorie Powell Paul Silver
(201) 746-2703 (202) 835-3517 (678) 672-6160
eve_costopoulos@eisai.com mpowell@phrma.org psilver@huronconsultinggroup.com
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