On January 1, 2007, the International Federation of Pharmaceutical Manufacturers
and Associations (IFPMA)1 enacted an updated version of the Code of
Pharmaceutical Marketing Practices (Code).2 The goal of the Code is to ensure the
ethical promotion of pharmaceutical products throughout the world.
The Code recognizes that advertising and promotion are an essential way to inform
prescribers of the availability and use of new drugs. At the same time, the Code sets
out general principles for self-regulation of advertising and promotional practices
backed up by the internal guidelines of multinational companies to ensure those
principles are met.3 Every member of the IFPMA,4 which includes GlaxoSmithKline,
Schering-Plough, Pfi zer and many other well-known pharmaceutical companies, is
now obligated to follow the Code wherever they conduct business.5 In addition, many
IFPMA member companies have developed their own internal marketing procedures.
In the interest of transparency, these internal company codes are accessible through
the IFPMA website.6
What does all this mean for global pharmaceutical companies? Will they be facing
a new set of rules and new scrutiny abroad that they do not face in the United States
as a result of the implementation of the IFPMA Code? At a minimum, the level of
scrutiny of their sales and marketing practices and the implementation of some new
rules will affect daily operations of multinational pharmaceutical companies.
OVERVIEW OF THE NEW CODE
Pharmaceutical companies are responsible under the Federal Food Drug and
Cosmetics Act (FDCA) for ensuring that information about their products is ac-curate and not misleading. Advertising and promotions are an extremely important
way to let prescribers know of the availability and use of new drugs, as well as new
uses for existing medicines. Yet, at the same time, there is a recognized need for the
self-regulation of such activities. The ever- evolving world of regulating interactions
between pharmaceutical companies and healthcare professionals has now reached
a point in the international arena where there is a consensus that self-regulation,
coupled with national association codes and internal guidelines of multinational
companies, is the most effective means of imposing standards for advertising and
promotional practices. This is evidenced by the fact that 14 of the top 20 revenueproducing
global pharmaceutical companies agreed to be bound by the Code.
Given the free fl ow of commerce between countries, especially in Europe, coupled
with the lack of one judicial system, as in the United States, to oversee sales and
marketing practices, one can understand the appeal of the IFPMA Code as a means
to regulate global sales and marketing practices.
The revised Code comes into effect almost fi ve years after the Pharmaceutical
Research and Manufacturers of America (PhRMA) Code on Interactions with
Health Care Professionals (PhRMA Code)7 was enacted in the United States. Both
the IFPMA Code and the PhRMA Code address inappropriate promotional activities
ranging from printed materials, to sponsorships, to gifts, to appropriate venues
for events. The IFPMA Code, however, goes further than the PhRMA Code in
policing its members. This is most evident by the fact that the PhRMA Code offers
only a paragraph or two of guidance for topics such as “The Basis for Interactions,”
“Informational Presentations” or “Scholarships or Other Educational Funds.” The
IFPMA Code, on the other hand, provides a much more detailed and step-by-step
analysis as to what pharmaceutical companies can and can not do with regard to
their marketing practices.
Specifi cally, the IFPMA Code addresses the content of promotional materials
(Articles 3–5); interactions with healthcare professionals (Article 7-8); company
procedures and responsibilities (Article 9); and operation and enforcement (Article
10). And, most importantly, the IFPMA Code is mandatory for all its members,
while the PhRMA Code is purely voluntary,8 thereby placing greater burdens and
scrutiny on companies when operating outside of the United States.
Discussed below are some of the differences between the IFPMA Code and the
PhRMA Code, as well as areas that most likely will lead to increased scrutiny of
pharmaceutical companies abroad.
COMPLAINTS PROCEDURE
The most signifi cant difference between the IFPMA Code and the PhRMA Code,
and one that will lead to increased scrutiny of the sales and marketing practices
of pharmaceutical companies abroad, is that the IFPMA Code has instituted a
complaints procedure whereby any member of the public, a healthcare professional
or a company can fi le a complaint alleging a breach of the Code.9 The complaints
process allows for the accused company to respond to the allegations within 30
calendar days from the receipt of the allegations.10 Then an ad hoc group of three individuals from member associations will issue a decision within 30 days from the
receipt of the company’s response.11
If the company or complainant disagrees with the decision, they have 30 days
to appeal.12 The complaint is then referred to a group of fi ve individuals to review
the appeal and make a fi nal decision.13 These decisionmakers are selected by the
IFPMA Director General from an ad hoc group of individuals experienced in the
application of national codes.14 A simple majority is all that is needed for deciding
the outcome of the appeal.15 If the original decision that there was a breach of the
Code is upheld, the determination is made public on the IFPMA website.16 What
this means is that the name of the company, the product at issue, a summary of
the key facts, as well as the country where the conduct occurred, and the identity
of the complainant are all published on the IFPMA website.17 In other words, this
is a quasi-judicial system.
In the fi rst three months since the IPFMA Code has been in place, there has not
been any posting of complaints on the IFPMA website. This does not mean the
self-regulatory process is not working. Rather, the self-policing process put into
place is still in its infancy. Once the public, including disgruntled pharmaceutical
company employees, become aware of the complaint process, it will most likely
become busy with the fi ling of complaints; it just takes the fi rst complaint to get
people aware of the process. For example, in the United States once the Neurontin
settlement was announced the number of off-label investigations and litigation
signifi cantly increased. The real question is: once the complaint process is in full
swing, will the public “outing” of companies that violate the Code have a deterrent
effect on companies conduct or not.
INTERACTIONS WITH HEALTH CARE PROFESSIONALS
A. Gifts and Items of Medical Utility
Another area that has been under scrutiny over the past several years, which is
refl ected in the Code, is the offering of gifts to healthcare professionals. The Code
defi nes what are deemed to be “acceptable gifts” to healthcare professionals.18 Not
only are gifts of cash or cash equivalents prohibited, but gifts for personal benefi t,
such as tickets to sporting events, rounds of golf or DVDs, are expressly prohibited.
19 The PhRMA Code, on the other hand, states that such gifts “should not be
offered”20 but does not place an express prohibition against gifts.
In addition, also under the category of gifts and items of medical utility, the
IFPMA has tasked each member association with defi ning what constitutes
“minimal value” with respect to promotional aids,21 “modest value” with respect to items of medical utility,22 or “inexpensive” with regard to customary gifts not
related to the practice of medicine that are in accord with local practice for acknowledgement
of signifi cant national, cultural or religious holidays.23 It is up to
each member association to clearly defi ne what constitutes minimal, modest and
inexpensive value under the local currency as well as signifi cant national, cultural
or religious holidays.24
So, for example, while a promotional aid provided at a European wide conference
may be deemed “inexpensive” in France, this may not be the case the Czech
Republic. Since the same code may have different applications in different countries,
it is easy to see how this is an area that can lead to problems for pharmaceutical
companies.
B. Travel
The Code specifi cally prohibits a company from organizing or sponsoring an
event for healthcare professionals outside of their home country unless it is appropriately
justifi ed by showing that a signifi cant proportion of the invited healthcare
professionals are from outside the company’s home country and that either logistical
or security reasons require the event to be held in another country.25 The other way
for an event to be held outside the home country of the organizing or sponsoring
company is if the expert(s) on the subject matter are located outside the company’s
home country. For example, if a company that is based in Sweden wants to sponsor
a conference that is aimed at allergists practicing in Europe and 70 percent of
the healthcare professionals invited reside outside of Sweden, if the company can
show that logistically it would make sense to hold the conference somewhere more
centrally located, then it can. But, if the same company is sponsoring a conference
in the middle of the winter aimed at Swedish allergists, then it would not be
permitted to hold the event on the Amalfi Coast, for example.
PROMOTIONAL MATERIALS
A. Off-Label Use
The IFPMA Code is groundbreaking in that, unlike the PhRMA Code, it addresses
head-on the issue of off-label use of pharmaceuticals.26 Specifi cally, it
states that “[n]o pharmaceutical product shall be promoted for use in a specifi c
country until the requisite approval for marketing for such use has been given in
that country.”27 While not meant to stifl e the scientifi c community, the IFPMA is
giving notice to its members that it will not tolerate what has become the bane of
existence of many of these companies in the United States, namely complaints based
upon off-label promotion. At the same time, this upfront statement about off-label
use highlights an area that for pharmaceutical companies that will be increasingly
scrutinized when it comes to their sales and marketing practices. Therefore, it will
be extremely important for each company’s compliance function to stay on top of
off-label issues through education, training and monitoring.
B. Product Information
The Standards for Promotional Information outlined in Article 4 of the IFPMA
Code are also an area where pharmaceutical companies will be scrutinized. Standard
4.2 specifi es exactly what is required of promotional information. Namely, that it
is: 1) clear; 2) legible; 3) accurate;4) balanced; 5) fair; 6) objective and 7) provide
enough information so the recipients can form their own opinion of the therapeutic
value of the product.28 It is not a “Chinese menu” situation where a company gets
to pick some but not all criteria they wish to follow. To comply with the Code, a
company’s promotional information must meet all seven of these criteria.
The issues of “accurate,” “balanced” and “fair” can, and most likely will, be
seen as ambiguous, and thus this could lead to an infl ux of complaints fi led under
Code’s complaint procedure. For example, does balanced mean that a company is
required to provide all clinical or research information that is contrary to or not the
same as their information? Or how much information is necessary for something
to be considered balanced? In all likelihood, as long as the promotional material
is based on an up-to-date evaluation of all relevant evidence and does not mislead
by distortion, exaggeration, undue emphasis or omission, then a company, under
the Code, will have met its obligations.29 In addition, companies are going to have
to ensure that, similar to what is required under the PhRMA Code, they do not
rely upon materials in journals or other areas that appear to be objective yet were
fi nanced or arranged for by the pharmaceutical company itself. The point is to
make sure that there is objectivity and independence in the materials relied upon
by the company to support its products and that the opinions expressed in scientifi c
journals, for example, is not tainted because the company paid the researcher to
conduct the study.
COMPLIANCE OBLIGATIONS
One fi nal difference between the IFPMA Code and the PhRMA Code is that the
IFPMA instructs compliance offi cers from member companies to work together
to share best practices for training sales staff on how to comply with the ethical
standards set forth in the Code.30 The purpose behind this mandate is to create
a resource pool of experts in Code compliance as well as stimulate discussions
about new challenges related to promotion and marketing practices within the
industry.31
Some areas that will most likely be discussed by compliance offi cers are: 1)
who is ultimately responsible for sales functions (such as contract negotiations
with customers) and marketing functions (such as advertising, dissemination of
scientifi c information and educational grants/continuing medical education); 2)
who is ultimately responsible for negotiating contracts with customers; 3) who
is responsible for reviewing marketing materials; and 4) what mechanisms are in
place to conduct internal audits of, for example, written marketing materials, anyinquiries about unapproved uses of a product and the systems, processes, policies
and procedures relating to educational grants and sponsorships.
These new job elements for compliance offi cers will obviously make their jobs,
as well as what their company is doing with regard to the sales and marketing off
their products, more transparent. Compliance offi cers will now be sharing information
about what they are doing with their counterparts at other pharmaceutical
companies. At the same time, since information will be shared among companies,
this should foster healthy competition among pharmaceutical companies to ensure
that they are at the forefront of compliance efforts when it comes to monitoring
their sales and marketing practices.
CONCLUSION
What does all this mean for drug manufacturers operating in a global economy?
There will be more policing of the sales and promotion of drugs than ever before. A
best practice for IFPMA member companies will be for them to make sure internal
structures and procedures are in place and that they conduct periodic internal audits
of the sales and marketing of drugs in order to ensure ethical promotional activities.
Many companies have already started down this path in the United States and
will be able to borrow from what has already been done here. What will be most
interesting to watch is whether the complaint process is utilized, and what effect
the decisions that are handed down will have on the operations of pharmaceutical
companies operating outside of the United States.
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