International Physician Payments Sunshine: EFPIA Code on Transfers of Value and Inconsistencies Within European Member Associations

The recent National Disclosure Summit featured many practical seminars for compliance with the Physician Payments Sunshine Act. The presentation entitled “The Status of Implementation of EFPIA’s Code by Member Associations and, to the Extent Countries have done so, where are there Consistencies/Inconsistencies among the Codes” expanded its sights beyond the United States and onto European disclosure laws.

D. Jeffrey Campbell, Managing Principal of Porzio, Bromberg & Newman, spoke first to the large European pharmaceutical market, which comprises 26 percent of the global market, employs 700,000 people in the European Union, and directly generates 2-3 million jobs downstream. In light of these vast numbers, the European Federation of Pharmaceutical Industries and Associations (EFPIA) plays a central role in global operations.

EFPIA represents the pharmaceutical industry operating in Europe. EFPIA is made up of 33 European National Pharmaceutical Industry Associations and 40 corporate members. There are 19 countries that are “full” members of EFPIA, including the UK, France, Germany, and Spain. There are also 14 “affiliate” members, though Campbell stated that the reporting obligations are identical for all 33 members. Some of the more emerging European countries—Latvia, Lithuania, and Estonia—have thriving pharmaceutical industries and active Member Associations of EFPIA.

The “Code on Disclosure of Transfers of Value from Pharmaceutical Companies to Healthcare Professionals and Healthcare Organizations” was adopted by EFPIA in June 24, 2013. It requires that its Member Associations adopt the provisions into their own national codes by December 21, 2013. The first reports are due within the first six months of 2016 and will cover 2015 data. As each country adopts the Code.

In terms of reporting requirements, the EFPIA Code is focused on the individual level healthcare professionals (HCPs) and healthcare organizations (HCOs). In the preamble to the EFPIA Code, EFPIA stated that interactions between industry and HCPs are valuable. However, EFPIA noted a high societal expectation that these interactions be done transparently, while also protecting data privacy interests. EFPIA dealt with these competing goals in its Transfer of Value Code. Brian Sharkey, also of Porzio, Bromberg & Newman, stated that while the Code did not explicitly discourage additional government regulation in this sphere, it did so implicitly.

EFPIA Code’s Transfer of Value Provisions

Each member company must disclose any transfers of value listed below that it makes to or for the benefit of an HCP or HCO in Europe.

• Individual Healthcare Organizations:
  • Donations and grants to HCOs/Contribution to costs of events
    • Sponsorship agreements with HCOs/Third parties appointed to HCOs to manage an event
    • Registration fees
    • Travel and accommodation
  • Fee-for-service and consultancy
    • Fees
    • Related expenses agreed in the fees for service or consultancy contract
• Individual Healthcare Professionals:
  • Contributions to costs of event
    • Registration fees
    • Travel and accommodations
  • Fee-for-service and consultancy
    • Fees
    • Related expenses agreed in the fees for service or consultancy contract
• Aggregate reporting- Research and Development:
  • Transfers of value to HCPs/HCOs related to the planning and conduct of
    • Non-clinical studies
    • Clinical trials
    • Non-interventional studies that are prospective in nature and that involve the collection of patient data from or on behalf of individual, or groups of, HCPs specifically for the study.

Sharkey noted that there is a strong preference explicit in the EFPIA Code for things to be done at the individual level. As indicated above though, there is an aggregate level reporting requirement for research and development. Furthermore, when there are data privacy limitations or where a doctor has not given the company consent, companies have the opportunity to aggregate this information when they are unable to report at the individual level. EFPIA provides a template to capture the individual and aggregate level reporting.

Additionally, there a number of exemptions for which countries do not have to report. These include: medical samples, items of medical utility, food and drink, hospitality, ordinary purchases between an HCP and a pharmaceutical company.

“There are a couple of complexities facing the 40 Member Companies,” Campbell noted. Most are not members of all 33 associations. “However,” Campbell stated, “every member corporation is bound by the local codes of the Member Associations even if they are not a member.” A company with business operations in Bulgaria would be required to follow the requirements of the association in Bulgaria. Companies must keep track of all the countries’ codes in which they have operations.

EFPIA’s Minimum Standards

The EFPIA Code sets out the “minimum standards which EFPIA considers must apply to all EFPIA Member Associations in all member states. All EFPIA Member Associations will be required to transpose this Code into their national codes in full, except where its provisions are in conflict with applicable national laws or regulations, in which case deviations are allowed, but only to the extent necessary to comply with such national law or regulation.”

The Code also states: “Where an EFPIA Member Association has determined that this Code cannot be implemented in full due to national law or regulation,” the Association “will not be in breach of its obligations under this Code if the deviation…is no broader than necessary to comply with such national law or regulation and if it clearly documents the legal issues limiting full implementation.” Thus, Member Associations must be just as stringent as the EFPIA Code. Associations may require more disclosure, but never less.

(In)consistency among the Member Country Codes:

Sharkey stated that of the 33 Member Associations, there are 24 that have adopted Transfer of Value (TOV) provisions in some way; there are two that have adopted the provisions, but are sorting through the necessary approvals; and six have yet to adopt a TOV provision. Sharkey considers the Netherlands “miscellaneous.”

Generally, TOV provisions relating to individuals and aggregation are consistent among the member countries. The differences come in the form of definitions, templates, and languages. He described some of the intricacies of certain member countries, including:

• Belgium and Germany

Both countries adopted Code provisions late last year, and are currently sorting through approvals with their given country’s state laws. Sharkey noted that we should know more in the next couple of months about the value transfers in these two countries.

• Netherlands

The Netherlands have not published new TOV provisions following the EFPIA Code. In responding to inquiries over this, the country stated that they have been self-regulating TOVs for a number of years. The Netherlands pointed to their 2013 report on 2012 spend. Campbell noted that this existing report, however, does not actually cover the same HCP spend as the EFPIA Code requires. For example, the Netherlands’ code contains a reporting threshold of €500 per doctor. There is no such gap in EFPIA. Therefore, pursuant to the EFPIA language quoted above, the Netherlands’ Member Association is not compliant. Campbell wondered whether the Netherlands would change their existing reports or whether the EFPIA Code Committee would take any action.

• United Kingdom

The UK did adopt a Code that was compliant with the existing EFPIA requirements. They also have pre-existing requirements, which they stated will stay in effect until their 2015 report. Starting in 2016, the UK will report under the EFPIA requirements.

• France

Legislation must predominate over inconsistent Code provisions. However, EFPIA legislation only preempts code when it is strictly inconsistent. The Member Association in France, known as LEEM, stated that pharmaceutical companies who comply with the existing French disclosure law fulfil their obligations as far as the EFPIA Code is concerned. Simply put, they allow companies to meet EFPIA requirements by following French requirements.

But Campbell noted a problem: there are “intersecting circles” between the two laws. The French law but does not require the reporting of fees-for-services pursuant to agreement paid by a healthcare company to an HCP. The existence of the agreement must be reported, but not the value. EFPIA, on the other hand, requires that the dollar value paid to the HCP for the services be reported.

• Portugal

Like France, Portugal has existing regulations that require very broad disclosures in many respects, but also offers a carve-out for fees-for-services. The Portuguese Member Association also stated that they would comply with EFPIA by complying with their own legislation.

• Denmark

Denmark has new legislation that will go into effect in 2015, which is also slightly inconsistent with EFPIA.

• Slovakia

Slovakia is the fourth country in Europe with significant legislation on transparency. Campbell noted that they have not publicly issued a code yet.
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Regarding France, Portugal, Denmark, and Slovakia, Campbell stated that stakeholders are unsure whether EFPIA will force the four countries’ expand their laws. EFPIA’s reaction will be an interesting development in assessing the scope of the EFPIA Code’s minimum standards.

EFPIA seems to be taking the transposition seriously. At the end of this month, the EFPIA “Codes Committee” is slated to assess the status of member countries in implementing the EFPIA Code. By March 31, 2014 the EFPIA Codes Committee must produce a report on the transposition of the EFPIA Transfer of Value Code into the Member Association codes “so as to allow sufficient time to remedy inadequate or incomplete transposition by any Member Association” prior to the June 2014 General Assembly meeting.

By next month, we should have a better idea how EFPIA will respond to the conflicting regulations.

Definitional Differences Between Individual Countries and EFPIA Code:

Healthcare Professionals

The EFPIA Code defines an HCP as any “member of the medical, dental, pharmacy or nursing professions or any other person who, in the course of his or her professional activities, may prescribe, purchase, supply, recommend or administer a medicinal product and whose primary practice, principal professional address or place of incorporation is in Europe.”

Sharkey noted that many Member Associations have simply cut and pasted this definition into their Codes, with a few exceptions. Finland includes veterinarians in the list of HCPs. Switzerland limits its definition to those who are permitted to prescribe under Swiss law as opposed to all of Europe. Norway, similarly, uses its own set of laws to define who may prescribe. Greece, the Czech Republic, Lithuania, Croatia, and Slovenia limit the definition’s scope to HCPs located within the country’s border. The EFPIA definition considers all HCPs across Europe.

• Healthcare Organizations

EFPIA’s definition includes any “healthcare, medical or scientific association or organization…such as a hospital, clinic, foundation, university or other teaching institution or learned society…whose business address, place of incorporation or primary place of operation is in Europe or (ii) through which one or more HCPs provide services.”

Most membership organizations adopt this in full. Russia, Greece, the Czech Republic, and Croatia only focus on healthcare organizations within their own jurisdiction.

The Consent Issue

A large concern from both an operational and business standpoint in relationships with healthcare customers involves obtaining consent. “Practically speaking,” according to Campbell, “you should just assume that consent is required to disclose any of this personal data under the EFPIA model.” The only exception is if there is existing transparency regulation in a country which states that consent is not required. The French regulations state this.

Otherwise, consent is required.

EFPIA recommends that all agreements between companies and HCPs and HCOs include a waiver of the privacy privilege. They also recommend that all existing agreements be redone to include a consent provision.

Assuming that has been achieved, what happens if the doctor attempts to revoke the consent?

Under the European-Union directive, it is implicit that any individual can revoke the consent to disclose the information. Campbell noted that a number of member countries explicitly permit revocation at any time; some Member Association codes also explicitly recognize doctors’ rights to revoke consent as well.

Certain Member Associations have specific items addressing consent. Slovenia’s code “shrewdly” states that a doctor who revokes consent has to return the benefit under the contract, noted Campbell. Greece’s Code is the “boldest of all” in that they have in the association code a provision that no doctor who has not given consent may be contracted with. Thus, companies who are members of the Greek association cannot provide benefits or fees to a doctor who has not consented to having the data public.

Germany takes a much more lax position. The German code provides that when there is no consent, the disclosures must be made in the aggregate. Italy specifies that companies must certify that a system is in place to ensure that HCPs have consented to the disclosure.

This sample of only four countries demonstrates that there are a lot of different rules from region to region. Companies will have to come up with processes to either deal with each individually, or find a way to satisfy the diverse privacy rules with one system.

Disclosure Platform

The EFPIA Code provides two options for publicly disclosing the TOV information. Companies may post information on their own website, or on a central platform made available on the industry member association’s webpages. Sharkey found that countries took six approaches to disclosure, which is pretty amazing considering the two stated options.

1. Finland, Spain, Switzerland, Slovenia: These countries instruct companies to put the disclosure information on the Member Companies’ website.
2. Greece and Croatia: These countries have stated they will develop a central platform themselves, so companies would put the information on the association website.
3. Sweden, Turkey, Czech Republic, Latvia, Russia: These countries copy and pasted the EFPIA Code, and state that companies can do either the company website or the central platform on the association website option.
4. Russia, Bulgaria, Lithuania: These countries state that companies must the information on the company website, but provide a link to the association website.
5. Romania states that companies must put information on the association website, and ensure a link going back to the company website.
6. Other countries have not stated their method.

Another consideration for pharmaceutical companies is in what language to disclose. EFPIA states that countries are obligated to use the native language, but are encouraged to disclose in English as well. This seems simple, but Sharkey stated that even here Member Associations diverge and create more confusion for international disclosures. Some require both; some recommend English; others, such as Switzerland, require English but recommend a variety of other languages as well.

Sanctions

EFPIA states that Member Associations have to adopt sanctions to ensure compliance with the Code. Some associations stick a specific sanction to violations of TOV provisions. The Greek Code states that if companies violate the TOV provisions, they can be fined up to €25000.

Other codes are not as specific and pursue a general sanction scheme. There are ranges of sanctions, from warnings, to fines, to expulsion. In extreme instances, violators may be reported to the government. Sharkey noted that “for a very severe breach in Spain, you can be fined up to €360,000.” In Croatia, Member Associations can fine companies by as little as €4.

EFPIA Questions to Ponder

Campbell first cautioned that HCP and HCO recipients in Europe may be even more surprised than in the United States over the disclosure laws. Even now, some US physicians are learning about the Sunshine Act for the first time. HCPs abroad may be even less educated about transfers of value.

Second, as we stated above, EFPIA requires HCPs and HCOs to give consent. If there is a widespread trend towards non-consent it would undermine EFPIA’s scheme.

Third, will HCPs want to work as much with companies who are requiring consent?

Fourth, what will non-member companies do? There are only 40 member companies right now. Will non-members plan on complying?

Fifth, will companies require consent as a condition to working with the HCP?

Sixth, what will the governments do? If there is a trend towards aggregate reporting, will governments go back to their own legislation?

Campbell concluded that in regards to international disclosure, “the cross-border implications are mind numbing.”