As the great Yogi Berra once said, “The future ain’t what itused to be…” That is especially true when looking at the multitude of changesfacing the biopharmaceutical and medical device industries. What will 2008bring in terms of how we communicate with our customers and patients? And whatare some of the greatest challenges we face?

A group of BioPharma marketing leaders was recently askedwhat their greatest regulatory challenge is. Their answers to that questionwere summarized as follows:

nUnderstanding the new guidelines/codes/regulations and the implication to theirbusiness

nDistinguishing between guidelines/codes/regulations/standards

nImplementing company policy relating to those guidelines/codes/regulations

n Managingthe relationship between legal, regulatory, and individual functions

n Helpingclients and vendor partners to understand how the changes affect the businessrelationship and outcomes

Further discussion centered on the various organizationsthat have impact on marketing and communication practices within the healthcareenvironment. The major groups are the obvious players: the FDA, OIG, ACCME, AMAand PhRMA/BIO/AdvaMed. When discussing corporate policies related to theseorganizations, marketers are still confused about “who rules,” both internallyand externally.

As we look into 2008 there are three areas of concern thatmembers of the industry need to address. These include:

1. The FDA Amendments Act (FDAAA) of 2007

—The Prescription Drug User Fee Act (PDUFA)

—The Medical Device User Fee and Modernization Act                                                             (MDUFMA)

2. Senate Finance Committee Report on CME

3. ACCME Policy Updates

1. The FDA Amendments Act (FDAAA) of 2007

PDUFA and MDUFMA were reauthorized and expanded to takeeffect January 1, 2008. The new act enhances the FDA’s authority to regulatemarketed drugs, and the amendment is considered to be the most comprehensivereform by the FDA in decades. Patient safety is of the primary concern of theagency and the changes within the amendment reflect that concern. Keycomponents of the FDAAA:

nPDUFA—allows FDA to collect fees from pharma companies to help fund reviews ofnew drugs. The act enables shorter review times and a more predictable reviewprocess, while still maintaining high-quality reviews.

nMDUFMA—allows for user fees, and will allow FDA to make significantimprovements in the medical device review program.

n BestPharmaceuticals for Children Act (BPCA)—encourages more studies in children andpromotes the development of treatments for children.

n PediatricResearch Equity Act (PREA)—continues FDA’s authority to require studies inchildren concerning certain medical products and under other specificcircumstances.

Among other things, the law also provides for:

nAdditional encouragement of specialized pediatric medical device development.

n Thecreation of a foundation (Reagan-Udall) to modernize product development,accelerate innovation, and enhance product safety.

n Advisorycommittee provisions

n Clinicaltrial registries

nProvisions intended to enhance drug safety

The amendments authorize a new program for the collection ofuser fees to support FDA review of TV ads directed at consumers.

The impact upon the industry includes the following:

             nIncreased pediatric research

             nAdditional restrictions on labeling

             nPost-approval surveillance studies

             nRisk evaluation and mitigation plans

             nDirect-to-consumer advertising

In assessing these changes, the results will includeincreased costs of drug development, in part due to the requirement forpost-approval plans, surveillance studies, pharmaco-vigilance, risk evaluationand mitigation. There will be longer development time, more stringentregulatory reviews and a constrained ability to make marketing claims as aresult of more restrictive labeling and tighter regulation of promotion and DTCmessaging.

So what does this mean for specific healthcare entities?Compliance obviously rules as the FDA regulates our industry. At a minimum, thefollowing applies:

Device Companies

n Trackindividual products to the lot and serial number


nPost-approval surveillance plans identified and implemented

All Companies

n Moreself-inspection, accountability and focus on safety

n Earlierdiscussions with the FDA on risk management plans and programs

n Clinicalstudies to be posted on a website registry

n Databasefor generic drug adverse events to be established

 2. SenateFinance Committee Report on CME

The authors of this document are Senators Max Baucus,chairman, and Charles Grassley, ranking member of the committee.

Why did the Senate Finance Committee decide to review theuse of educational grants from the BioPharma and medical device industries?There are several possible reasons:

n The USCommittee on Finance has exclusive jurisdiction over Medicare and Medicaid with80 million Americans and a 2006 expenditure of over $700 billion.

n Thecommittee is responsible to ensure program funds are spent properly (includingprescription drug benefits).

n Drugmarketing and utilization became a concern to the committee.

n Thecommittee became aware that Pharma et al funds education programs to “helpbuild market share.”

In addition, the committee articulated two primary concerns:

n Newproducts tend to be more expensive than older/generic products which raises thecosts of CMS expenditures.

n Newproducts have less clinical history than older products which raises theconcern of safety.

In June 2005, the committee wrote to 23 of the largest pharmacompanies to inquire about the use of educational grants. Pharma referred themto the ACCME. The committee also reviewed medical literature and information inthe press.

The findings of the committee, released in 2007, identified:

n “Pharmauses education to increase the market for their products”

n Concernregarding off-label use (increasing drug utilization resulting in increased CMSexpenditures)

n Companieshave taken steps to separate independent grant process             fundingfrom marketing

n Independentgroups have guidelines to reduce the potential for influence of content

n Theseguidelines (ACCME) reveal inadequacies in monitoring/enforcing independencefrom commercial influence (ergo, opportunity for fraud and abuse)

Because these areas concern the Senate Finance Committee, itconcerns the industry and those involved in medical education. There are someimportant steps that can be taken by companies involved in medical education(both client and service providers) to mitigate risk while still ensuring thedelivery of quality, independent education programs:

n Separatethe education functions from marketing and especially sales. This was initiallystated by the OIG in 2003.

n Developan objective grant approval process. Many BioPharma companies have moved toonline grant submissions with blind reviews by committees independent of thesales and marketing organizations.

n Maintaina “hands-off” approach with CME

n Somecompanies are moving funds formerly dedicated to CME to activities perceived as“safer”

n Createinternal compliance programs

Compliance departments with resulting programs and policiesare becoming core functions within the BioPharma industry. That being said,Kenneth Berkowitz, Esq. has been quoted as saying: “It’s not just having acompliance plan; it’s having a plan that’s living, breathing, and working. Justdon’t have this great document; it has to be implemented.” Elements for aneffective compliance program include:

nDesignating a compliance office and committee/department

nImplementing written policies and procedures

nConducting education and training

nDeveloping effective lines of communication

nPerforming internal monitoring and audits

n Enforcingpolicies through well-published disciplinary guidelines

nResponding promptly to identified problems and undertaking corrective action.


3. Accreditation Council for Continuing Medical Education(ACCME) Policy Updates

The ACCME is the organization that identifies, develops andpromotes standards for physician education. They accredit for-profit andnot-for-profit institutions and organizations that offer continuing medicaleducation (example, medical education companies, hospitals, professionalsocieties, etc). The ACCME evaluates these CME providers and ensures compliancewith ACCME standards.

The Standards for Commercial Support are written for CMEproviders to ensure the independence of CME activities. They had previouslybeen updated in 2004 and 2006. There is a general belief within the CMEenterprise that the 2007 updates occurred as a result of :

n OIGbecame interested in education in 2003 and issued their OIG Compliance Guidancefor Pharmaceutical Manufacturers

n In 2005 theSenate Finance Committee became interested in education because of thepotential for fraud and abuse, inducement to prescribe, off-label discussions,and increased drug expenditures (see previous section)

n Thecommittee queried the ACCME regarding its role in monitoring independence incertified CME programs

n Thecommittee issued its findings in 2007, Use of Educational Grants byPharmaceutical Manufacturers, one of which revealed inadequacies inmonitoring/enforcing independence from commercial influence

n In 2006,drug manufacturers funded over $1.9 billion into CME.

Following the Senate Finance Committee report, the ACCMEissued another revision of The Standards for Commercial Support in August of2007. Major areas of concern to grantors as well as providers include:

n Acommercial supporter cannot specify the manner in which a program will bedeveloped. Example, a commercial supporter cannot recommend speakers or reviewcontent. Review of content is a concern to the BioPharma industry, specificallyas it relates to product data and the accuracy of reporting such data. Whilegrantors have understood that they cannot control content of a certified CMEactivity, in the past they have been able to review content for accuracy ifrequested by the provider. Again, this change becomes especially critical whenthere is new product data being presented and the grantor/BioPharma company mayhave the best resources for scientific review.

nDefinition of commercial interest: “A ‘commercial interest’ is any entityproducing, marketing, re-selling, or distributing healthcare goods or servicesconsumed by, or used on, patients.” No entity owned or controlled by a“commercial interest” can be accredited by the ACCME system, and there are nostructural or organizational “firewalls” that could be put in place for acompany that is owned or controlled by a “commercial interest” to suffice foraccreditation.

n The majorchange in the definition is the addition of the word “marketing,” implying therestructuring of med ed companies to ensure separation from parent companiessuch as advertising agencies. This means, for example, that accredited medicaleducation companies cannot remain as wholly-owned subsidiaries of anadvertising firm. The change reflects the overwhelming concern of the ACCME toensure independence of certified CME. However, while attempting to excludemedical education and communication companies, the ACCME continues to exemptother types of commercial supporters such as for- and not-for-profit hospitals,health insurance providers and others from the commercial supporter definition,in effect, promoting a two-tiered system.

n Conflictof interest continues to remain a hot-button for CME providers. Anyone who isin a position to control content must disclose their “relevant” financialrelationships within the past 12 months that could create a conflict ofinterest. From the speaker perspective, this includes relationships with BioPharmaincluding participation in clinical trials, serving in an advisory capacity, asa spokesperson, author, stockholder, etc. ACCME considers financialrelationships to create a conflict of interest which could result in contentbias. It is the provider’s responsibility to resolve conflict of interest withspeakers.

How will the industry respond to these changes in certified CME?BioPharma must not exert any influence over the grant-making process andprovisions of certified CME. This has become very clear. Internal decisionsregarding a company’s involvement in education will evolve over time, withconsiderations including the cost-benefit of funding certified CME. Somecompanies are already allocating their funds to other forms of education,including on-label, promotional programs. Other companies are directing theirfunds to professional organizations, schools of medicine, and educationfoundations. And some companies are choosing not to fund certified CME. Themessage is clear that certified education must remain independent of commercialinfluence. Ongoing dialogue with stakeholders is critical to ensure theindependence, accuracy and value of CME for physicians and their patients.


“The future ain’t what it used to be.” This year will bringmany challenges to companies including their response to these regulatory andother changes facing the BioPharma industry. What we know is that the industrywill respond accordingly, to ensure their mission of providing safe andeffective therapeutics for the improvement of patient care. And they willcommunicate this information with the most effective means of reachinghealthcare providers, patients, and their caregivers. 


Linda Klein is president & CEO of Klein & Company