The passage of the Patient Protection and Affordable Care Act (ACA) has spiraled into sweeping changes to every corner of the healthcare industry. Pharmaceutical, biologic, medical device, and medical supply companies have certainly begun strategizing and implementing policies to adapt to new regulations and best practices. For marketing and sales professionals in particular, the single, most important provision you need to be acutely aware of is the Physician Payments Sunshine Act.
No matter what healthcare specialty or field your pharmaceutical or medical technology business focuses on, the Sunshine Act will greatly impact your direct-to-physician sales and field marketing strategies. To better monitor the financial relationship between physicians and suppliers, the ACA has created new requirements for tracking, reporting and planning marketing expenditures.
Continue reading below for answers to your questions about this major piece of legislation.
What Does the Sunshine Act Mean for Your Company?
The Sunshine Act, which is provision of the ACA, requires manufacturers of drugs, medical devices, and biologicals that participate in U.S. federal health care programs to report certain payments and “transfers of value” (that exceed $10) given to healthcare professionals (HCPs) and teaching hospitals. Manufacturers will need to submit reports to the Centers for Medicare & Medicaid Services (CMS) on an annual basis. You should know that the majority of the information contained in those reports will be available on a publicly searchable website. Moreover, physicians have the right to review their reports and challenge those reports that are false, inaccurate or misleading.
Unfortunately, “transfer of value” is a vague term with widespread applications. It encompasses everything, from complimentary lunches to promotional gifts to professional development opportunities. In many cases, it may even apply to printed collateral and marketing literature that gets distributed by field reps to HCPs.
The penalties for improper reporting under the Act are quite severe. A single infraction carries with it a fine of $10,000. Companies that knowingly disregard Sunshine Act reporting requirements can be fined up to $100,000 per incident. Additionally, the Sunshine Act requires HCPs to meet their own standards for reporting. That means that they will be more inclined to work with marketers and sales reps that truly understand the details of compliance and can protect them from violations.
How Does the Sunshine Act Affect Traditional Direct-to-Physician Marketing Strategies?
The $10 threshold established by the Act is a low bar. If your life science company delivers medical books, product catalogs, brochures and promotional gifts to a physician, the accumulated value of those materials can easily exceed $10. However, there are some exceptions where a direct payment or transfer of value is not subject to reporting, and these include product samples and educational materials that directly benefit patients. Because of some of the gray areas in the act regarding whether something is reportable or not, marketers and sales reps need to be cautious and collect information on all payments and items of value – in case it’s ever needed. When you compound this fact with the challenges of managing a distributed sales force, multiple advertising campaigns, and ongoing appeals, it becomes even more difficult to efficiently meet the standards of reporting.
To market effectively within the parameters of the Sunshine Act, life science marketers must place a new emphasis on efficiency, flexibility and comprehensive auditing. However, traditional marketing fulfillment strategies, whether they are in-house operations or outsourced to multiple vendors, have never been known for being nimble. To avoid paying out tens of thousands of dollars unnecessarily, it's time to rethink every aspect of your life science marketing and sales fulfillment strategy.
Where Can Life Science & Pharmaceutical Markets Find Compliance Assistance?
In order to coordinate all the factors that influence Sunshine Act compliance, growing numbers of pharmaceutical and life science companies are dependent on marketing portals. This type of solution integrates every stage in the fulfillment workflow under the guidance of logistics and brand management experts. In addition to tracking “transfers of value,” marketing portals empower corporate managers with complete control over their marketing supply chain, sales collateral, production workflows and more – all from a centralized location that reduces costs, increases efficiency and improves outcomes. It can also help you adapt to the new landscape created by the Sunshine Act in the following ways:
- Enforcing brand management policies. With a digital repository of marketing assets at your disposal, MRM allows for more precise brand management. Because assets can be printed on-demand in smaller batches, templates for different regions, specialties and even individual doctors can be created automatically with variable data printing. For example, two different versions of the same brochure can be created: one with sunshine imagery for distribution in Texas and another with coastal imagery to be distributed in Maine. Give your sales force the power of localization and personalization.
- Controlling the marketing supply chain. Low inventory thresholds, reorder limits, budgets, automated approval workflows, data logging, and tracking information are centralized, and up-to-date reports are available in real time. This gives marketing departments and executives more insight into what their company is spending on marketing assets. It also provides a way to track orders for compliance purposes.
- Streamlining fulfillment and sales support. A single vendor handles everything: printing, mailing, warehousing, order processing, inventory management, and distribution to both domestic and international locations. In an earlier blog post, we analyzed the most common strategies used by pharmaceutical and life science companies, and found that all-in-one marketing fulfillment partners offer all of the benefits of both in-house and outsourced fulfillment strategies with none of the drawbacks.
- Tracking budgets and marketing spend. Assigning strict and specific budgets is a powerful tool for managing your overall sales and marketing efforts. Marketing portals can tell stakeholders how much they have to spend and allow managers to budget for print-on-demand.
Take Sunshine Act Compliance Seriously With Jet Mail
The sooner you prepare for the Sunshine Act, the better. In today's competitive life sciences marketplace, you can't sacrifice your competitive advantage with fines and damaged reputations. The companies that take compliance seriously now will thrive in the future. Find out more about the challenges of the Sunshine Act and the benefits of marketing portals by downloading our free ebook, Streamlining Fulfillment, Simplifying Compliance, & Staying Competitive for the 21st Century Life Sciences Marketer.