AIFP Disclosure Code Frequently asked questions

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1 AIFP Disclosure Code Frequently asked questions Obsah Question No. 1: Which Transfers of Value should be disclosed in the aggregate and which ones individually?... 3 Question No. 2: What Transfers of Value are related to research and development?... 3 Question No. 3: As soon as a Member Association of EFPIA drafts and approves a local version of the Code, do the Member Companies have to comply with the national Code (not the EFPIA Code) in each country where they operate? Even if some of the EFPIA countries have not transposed into their Code all the requirements of EFPIA?... 4 Question No. 4: Does the disclosure obligation apply to the obligation to the value or costs related to a Transfer of Value effected by a Member Company? Or, does the disclosure have to focus on the income/benefit that such Transfer of Value represents for the recipient ( Healthcare Professional or Healthcare Organisation)?... 5 Question No. 5: Under the Code, what do companies that have non-medical divisions, divisions of over-the-counter drugs (OTC), diagnostics, and other medical divisions have to disclose?... 5 Question No. 6: Who is to disclose Transfers of Value? Is it enough if the data are disclosed by a parent company or do they have to be disclosed by a local branch? Can different branches of the same Member Company of EFPIA disclose them separately in one country?... 5 Question No. 7: Where should a disclosure be made if a Healthcare Professional carries out an activity in another country?... 6 Question No. 8: An American branch of a full member of EFPIA makes a Transfer of Value to a Czech Healthcare Professional. Is it necessary to disclose the Transfer of Value under the AIFP Code? Who is responsible for the disclosure of the Transfer of Value? Czech or American branch? Which entity would be penalised?... 6 Question No. 9: Are non-european companies, for example, companies from the USA, required to disclose Transfers of Value to Healthcare Professionals or Healthcare Organisations in Europe?... 7 Question No. 10: What does the term clearly identifiable recipient mean?... 7 Question No. 11: What does the term unique identifier mean?... 8 Question No. 12: How are we to treat further expenditure related to the fee for service or consultancy contract?... 8 Question No. 13: If services are rendered in connection with a third-party congress, should the expenses be treated as contribution to the payment of costs related to Events, or fee for service and consultation?... 8 Question No. 14: How should we classify hire of stands for an event or place in a stand?. 8 Question No. 15: Which Transfers of Value have to be disclosed as registration fees paid by a Healthcare Organisation?... 8

2 Question No. 16: Which Transfers of Value have to be disclosed as registration fees paid to a Healthcare Professional?... 9 Question No. 17: Which types of items have to be disclosed as sponsorship agreements with Healthcare Organisations or with third parties appointed by a Healthcare Organisation to organise an Event?... 9 Question No. 18: Which types of items have to be disclosed as fees for services and consultations to Healthcare Professionals and Healthcare Organisations, directly or through a third party?... 9 Question No. 19: What must a Member Company do if it does not obtain permission from a Healthcare Professional for disclosure of individual Transfers of Values? Question No. 20: Who will be penalised if the Code is infringed? Question No. 21: Who is responsible for correctness and correct taxation of the disclosed Transfers of Value? Question No. 22: Is the AIFP/EFPIA Disclosure Code binding for a company that markets medicinal products of an AIFP member company, provided that the member company is the MAH of these products? Question No. 23: Who/what, besides healthcare facilities, falls under HCO? Is HCO a broader term or does it apply to healthcare facilities only? Question No. 24: How will physicians, who are not members of the Czech Medical Chamber and work e.g. in pharmacoeconomics or organize seminars, trainings, etc., be identified if they sign a consultancy contract with a pharmaceutical company? Question No. 25: Will transfers of value be reported to non-physicians (e.g. pathologists, biologists, biochemists with the title RNDr. or Mgr.) or how will they be identified? Question No. 26: If a physician has an IN and values are transferred based on an invoice issued by the physician, will this be reported as an HCP or HCO? Question No. 27: Does AIFP or EFPIA set, in connection with the Disclosure Code, a fair market value for individual activities? Question No. 28: Is it necessary to include a disclosure provision in the contracts that concern aggregately disclosed data on R&D?... 12

3 Question No. 1: Which Transfers of Value should be disclosed in the aggregate and which ones individually? Answer: I Transfers of Value to be disclosed in the aggregate are those that cannot be attributed (for any reason) to a single Healthcare Professional or Healthcare Organisation. All Transfers of Value that can be attributed must be disclosed individually. Aggregate Transfers of Value are, for example, in accordance with the Code, related to research and development, namely non-clinical trials, clinical trials and non-intervention studies (these three are disclosed together as a single sum). Furthermore, there are categories of Transfers of Value whose individual disclosure is barred for legal reasons. Concerning aggregate Transfers of Value, where disclosure is prohibited by law, a Member Company will disclose aggregate amounts by category (for example, service and consulting fees, registration fees, transport and accommodation). Such aggregate disclosure will identify for each category the number of Recipients covered by such disclosure, on an absolute basis and as a percentage of all Recipients, and the aggregate amount attributable to Transfers of Value to such Recipients. Question No. 2: What Transfers of Value are related to research and development? Answer: The company must first determine whether a given activity fits the definition of research and development given below. The Code defines Transfers of Value related to research and development as Transfers of Value transferred to Healthcare Organisations or Healthcare Organisations in the context of planning or performing: i. non-clinical trials (as defined in OECD Principles of Good Laboratory Practice), ii. clinical trials (as defined in Directive 2001/20/EC), or iii. non-intervention trials, which are of prospective nature and comprise collection of patient data in the name of an individual Healthcare Professional or a group of Healthcare Organisations for the purposes of trials (Section of Code of Good Clinical Practice). Definition of legal and regulatory instruments i. Non-clinical trials OECD Principles of Good Laboratory Practice (last version dating from 1997) define nonclinical trials as follows (Section I 2. Definitions of terms; Section 2.3.1): A non-clinical trial of health safety and safety with respect to the environment ( trial ) means an experiment or set of experiments in which a test substance is examined to obtain data on its properties and/or its safety with respect to human health You will find the full text at the address ii. Clinical trials Directive EU 2001/20/EC defines a non-interventional trial in Article 2(a) as follows:

4 any investigation in human subjects intended to discover or verify the clinical, pharmacological and/or other pharmacodynamic effects of one or more investigational medicinal product(s), and/or to identify any adverse reactions to one or more investigational medicinal product(s) and/or to study absorption, distribution, metabolism and excretion of one or more investigational medicinal product(s) with the object of ascertaining its (their)safety and/or efficacy. You will find the full text at the address iii. Non-interventional trials Directive EU 2001/20/EC defines a non-interventional trial in Article 2(c) as follows: a study where the medicinal product(s) is (are) prescribed in the usual manner in accordance with the terms of the marketing authorisation. The assignment of the patient to a particular therapeutic strategy is not decided in advance by a trial protocol but falls within current practice and the prescription of the medicine is clearly separated from the decision to include the patient in the study. No additional diagnostic or monitoring procedures shall be applied to the patients and epidemiological methods shall be used for the analysis of collected data; Based on the trial, the Member Company must disclose information about Transfers of Value as follows: If the activity is related to research and development, the disclosure of a Transfer of Value must be made in the aggregate as stated in Section 3.04, in the category Transfers of Value related to research and development. Transfers of Value made by the parent company or a third party must be disclosed in the recipient s state. If the is not related, the Member Company must disclose the Transfer of Value individually according to the requirements of Section Question No. 3: As soon as a Member Association of EFPIA drafts and approves a local version of the Code, do the Member Companies have to comply with the national Code (not the EFPIA Code) in each country where they operate? Even if some of the EFPIA countries have not transposed into their Code all the requirements of EFPIA? Answer: One of the conditions of membership of EFPIA is that the Member Associations must fully adopt all EFPIA Codes and the Member Companies must follow the national Codes (even in countries where they are not full members of the association). EFPIA has a right to expel any member, company or association failing to meet its obligations under the EFPIA Codes or otherwise or puts at risk the achievement of the objectives pursued by EFPIA. If a Member Company operates in a country where a Member Association has transposed the FPIA Code into its national Code by the set deadline with a deviation approved by EFPIA, the Member Company must follow the Code of the Member Association. If a Member Company operates in a country where a Member Association has not transposed the FPIA Code into its national Code by the set deadline or has not laid down in its Code all the requirements of EFPIA, the Member Company is required to comply directly with the EFPIA Code. EFPIA Code should have direct effect in that country.

5 If a Member Company is not a member of an EFPIA association in any European country, it undertakes to be bound by the Code of the Member Association of EFPIA. Question No. 4: Does the disclosure obligation apply to the obligation to the value or costs related to a Transfer of Value effected by a Member Company? Or, does the disclosure have to focus on the income/benefit that such Transfer of Value represents for the recipient ( Healthcare Professional or Healthcare Organisation)? Answer: The disclosure obligation applies to the value and costs incurred in making the Transfer of Value by the Member Companies. It is not therefore the resulting income/benefit for the Healthcare Professional or Healthcare Organisation. Question No. 5: Under the Code, what do companies that have non-medical divisions, divisions of over-the-counter drugs (OTC), diagnostics, and other medical divisions have to disclose? Answer: Disclosures of Transfers of Value apply solely to activities related to prescription drugs. The Code does not apply to Transfers of Value which: only concern medicinal products sold over the counter, are not listed in Article 3 of the Code (for example, information or educational materials and items of medical utility, hospitability, medical samples), are part of ordinary course purchases and sales of Medicinal Products. Legal status of a prescription drug or over-the-counter drug is specified in the national law. It may be different in different countries. It is therefore necessary to disclose Transfers of Value related to a category of products, which includes a prescription product (for example, combined products, diagnostics), in the aggregate according to the requirements of the Code. Question No. 6: Who is to disclose Transfers of Value? Is it enough if the data are disclosed by a parent company or do they have to be disclosed by a local branch? Can different branches of the same Member Company of EFPIA disclose them separately in one country? Answer: If a national Code does not provide a platform for disclosure, each Member Company decides about the manner of disclosure (on central and local level). The disclosures must be publicly accessible in the country where the recipient has its practice. If a Member Company is not resident, has no subsidiary or branch in a country in which the recipient has its principal practice, the Member Company must disclose the Transfer of Value in a manner which is in keeping with the national Code of the country where the recipient has its practice.

6 If a Member Company has separate divisions in the same country, it will decide which legal entity is most appropriate for the disclosure. It is necessary to disclose all Transfers of Value to a specific recipient in one place. Disclosure in a country in which the recipient has its practice must apply to all Transfers of Value irrespective of where they take place. If several divisions of the same Member Company effect a Transfer of Value in the same country to several Healthcare Organisations, it is necessary to disclose the Transfers of Value in the same place. Transfers of Value must not be divided if more divisions of a company are involved. All disclosures must be made in the country in which the recipient has its principal practice. Question No. 7: Where should a disclosure be made if a Healthcare Professional carries out an activity in another country? Answer: Transfers of Value to Healthcare Organisations and Healthcare Organisations whose practice, principal professional address or place of incorporation is in Europe must be made in the country where the recipient has its principal practice or registered office whether the Transfer of Value takes place in the country or outside it. The Code requires transparency in a Transfer of Value based on the country of the recipient s primary practice. Whoever is interested in the information can find it easily. Examples: An American head office of a Member Company sponsors a Healthcare Professional who has his practice in Sweden and carries out his activities in Germany. He must disclose the Transfer of Value in the recipient s ( Healthcare Professional s) name in Sweden (under the applicable laws, regulations and national code of Sweden). An Italian Member Company sponsoring a Healthcare Organisation, with registered office in Italy, providing consulting to a hospital in Tunisia, must disclose the Transfer of Value in the name of the receiving Healthcare Organisation in Italy (under the applicable laws, regulations and national code in force in Italy). A Spanish Member Company sponsors a Healthcare Professional from the USA during his work on an advisory board in Argentina need not disclose the Transfer of Value according to the EFPIA Code. Disclosure may be however required in other jurisdictions, for example in the United States under the one of the Freedom of Information Acts ( Sunshine Act ). Question No. 8: An American branch of a full member of EFPIA makes a Transfer of Value to a Czech Healthcare Professional. Is it necessary to disclose the Transfer of Value under the AIFP Code? Who is responsible for the disclosure of the Transfer of Value? Czech or American branch? Which entity would be penalised? Answer: The disclosure must be made according to the national code of the country where the recipient has its principal practice. If a disclosure platform is not provided by the national code or national law, the Member Company will decide whether the disclosure will be made on the website of its head office or on websites of each of the branches. It must be easy for the public to find the required information and gain access to it in the country where the recipient has its principal practice.

7 If it is found that a Member Company has infringed a code, the Member Association of the country in which the recipient has its principal practice (in this case the Czech Republic), will penalise the Czech company because disclosure is one of its obligations. Question No. 9: Are non-european companies, for example, companies from the USA, required to disclose Transfers of Value to Healthcare Professionals or Healthcare Organisations in Europe? Answer: Each companies which is a member of EFPIA is required to follow the EFPIA Codes. The Code requires, for example, disclosures of Transfers of Value effected by the American part of a Member Company to a Healthcare Professional or Healthcare Organisation with practice in one of the 33 countries in which EFPIA operates. EFPIA Code applies to all the Members, including: Member Companies, specialised groups of EFPIA Members: (i) European Bio-pharmaceutical Enterprises, EBE) and (ii) Vaccines Europe (VE), Member Companies of Member Associations which are not full members of EFPIA. Concerning full members of EFPIA ( Member Companies), independent entities belonging to one supranational company which may be a parent company (for example, headquarters, head office, or a controlling company of a business company), a subsidiary or any form of organisation, are regarded as one company and must therefore comply with the EFPIA Codes. Question No. 10: What does the term clearly identifiable recipient mean? Answer: The Member Companies must ensure that each recipient is identified so that no doubt can arise as to his/her identity. Identification of a Healthcare Professional will be made in the Czech Republic according to his/her first name, surname, specialisation, address of principal practice, and a registration number assigned by the Czech Medical Chamber/Czech Chamber of Pharmacists. Identification of a Healthcare Organisation is made according to its name, registered office, and INO. In case of the indirect transfers of value, it is important to state who is the clearly identifiable recipient. If a third party (eg. subject through which transfers of values are provided) does not fullfill the definition of HCO, these transfers of value are disclosed on the individual bases (under clearly identifiable final recipient) to the extent possible. However, there will be no payments used by the third party for covering its own costs disclosed, eg.. lease of space, reward / margin, etc... If transfers of value are provided to HCPs indirectly through HCOs, the disclosure is made on the individual bases (under clearly identifiable final recipient) to the extent possible - if the provider knows the identity of the HCP. Remaining transfers of value provided - eg. value that is provided by HCO without specific knowledge of HCP who receives it will be disclosed under HCO. For purpose of disclosure of transfers of value provided to HCP / HCO by third parties, it is necessary to ensure that the contract between the third party and HCP / HCO contains a consent to disclose such tranfers of value. The cotract has to also cover a commitment that

8 pharmaceutical companies will be given information about the value of transfers of value provided to the final recepient. Question No. 11: What does the term unique identifier mean? Answer: In the Czech Republic, a doctor s unique identifier is a registration number assigned by the Czech Medical Chamber; for pharmacists it is a registration number assigned by the Czech Chamber of Pharmacists. The unique identifier of a Healthcare Organisation is INO. Question No. 12: How are we to treat further expenditure related to the fee for service or consultancy contract? Answer: Further expenditure related to the fee for service or consultancy contract has to be generally specified in the appropriate category the amount of the fee will be separate from the agreed related costs. If a service or consultancy agreement is concluded, costs will be incurred for transport and accommodation needed for a given activity. The costs are not part of the fee paid to the supplying party. If this expenditure is not significant (for example, if their value is limited), the Member Company need not separate them from the fee. If separation of costs is not appropriate or cannot be easily done, the Member Companies must explain in their methodical guides how further costs are to be treated. Question No. 13: If services are rendered in connection with a third-party congress, should the expenses be treated as contribution to the payment of costs related to Events, or fee for service and consultation? Answer: In this case services are rendered (of a Healthcare Professional or Healthcare Organisation), so they have to be disclosed in the category fees for services. Question No. 14: How should we classify hire of stands for an event or place in a stand? Answer: Hire of stands for an event or place in a stand is usually covered by sponsorship agreements with Healthcare Organisations or third parties organising an Event. If an Event is organised by third parties, the Transfer of Value falls under sponsorship agreements with Healthcare Organisations/third parties appointed to organise an Event. It is disclosed in the country where the Healthcare Organisation has its registered office. The Member Companies are advised to include provisions concerning consent to disclosure in their sponsorship agreements. Question No. 15: Which Transfers of Value have to be disclosed as registration fees paid by a Healthcare Organisation? Answer: If a Member Company concludes with a Healthcare Organisation a sponsorship agreement for an Event and is able to differentiate the costs of registration fees, transport

9 and accommodation, and the like, it is obliged to specify these amounts and structure them appropriately. Question No. 16: Which Transfers of Value have to be disclosed as registration fees paid to a Healthcare Professional? Answer: If a Member Company concludes with a Healthcare Professional a sponsorship agreement and is able to differentiate the costs of registration fees, transport and accommodation, and the like, it is obliged to specify these amounts and structure them appropriately. Question No. 17: Which types of items have to be disclosed as sponsorship agreements with Healthcare Organisations or with third parties appointed by a Healthcare Organisation to organise an Event? Answer: Sponsorship agreements are instruments describing the purpose of sponsorship and related Transfers of Value. If an agreement covers registration fees and transport and accommodation, such Transfers of Value should be generally specified in the appropriate categories. Examples of activities which should be included under the item sponsorship agreements : hire of stands for an Event, advertising space (in paper, electronic or other form), satellite symposia of a congress, sponsoring of lecturers/teachers, food or drink, if it is part of a package provided by the organisers (covered by sponsorship agreement, training courses run by a Healthcare Organisation (unless a Member Company chooses individual Healthcare Organisations to take part in an Event). Question No. 18: Which types of items have to be disclosed as fees for services and consultations to Healthcare Professionals and Healthcare Organisations, directly or through a third party? Answer: This type of activity will be provided under an agreement describing the purpose of Transfers of Value (for example, a consultancy agreement). Examples of Transfers of Value which may be included under the item fees for services and consultations : lecturers fees, lecturers training, drafting medical documents, data analysis, drafting educational materials, general consulting.

10 Transfers of Value received by a supplier, which may be a Healthcare Professional, a legal entity owned by a Healthcare Professional (then it is Healthcare Organisation) or Healthcare Organisation, will be disclosed as Transfers of Value to this entity. Question No. 19: What must a Member Company do if it does not obtain permission from a Healthcare Professional for disclosure of individual Transfers of Values? Answer: According to the standpoint of the Office for Personal Data Protection which AIFP received in reply to its questions, it is possible to make use of a legal dispensation from the obligation to obtain consent from each Healthcare Professional, provided an agreement between the Healthcare Professional and an AIFP Member Company contains a provision to the effect that processing of personal data is necessary for the purposes of the agreement (see the provisions of Section 5(2)(b) Act No. 101/2000 Coll., the Protection of Personal Data, as amended). If such agreement is concluded (in writing), the Healthcare Professional s consent is nor needed and cannot be therefore revoked. Question No. 20: Who will be penalised if the Code is infringed? Answer: If it is found that a Member Company has infringed a Code, the Member Association of the country where the recipient has its principal practice (in this case the Czech Republic) will penalise the Czech company because disclosure is one of its obligations. Question No. 21: Who is responsible for correctness and correct taxation of the disclosed Transfers of Value? Answer: The Member Company is responsible for correctness of the amounts and the recipient for their correct taxation. Question No. 22: Is the AIFP/EFPIA Disclosure Code binding for a company that markets medicinal products of an AIFP member company, provided that the member company is the MAH of these products? Answer: If a company, which markets medicinal products of an AIFP/EFPIA member company, is not an AIFP or EFPIA member, the Disclose Code cannot be binding for such a company. On the other hand, an AIFP/EFPIA member company is bound by the Disclosure Code. This means that an AIFP/EFPIA member company must disclose payments provided by such a company directly or indirectly (e.g. through marketing) to, or in favor of, a recipient. Question No. 23: Who/what, besides healthcare facilities, falls under HCO? Is HCO a broader term or does it apply to healthcare facilities only? Answer: It is true that HCO is a broader term. HCO also includes organizations, institutions or associations of healthcare professionals as well as long term care facilities, emergency medical services or spa facilities. Scientific societies are also in the scope of the disclosure Code. The term healthcare facility must be interpreted in a manner broader than that specified in Czech legislation see the Preamble of the Disclosure Code that uses the term healthcare organization.

11 The EFPIA Code spiecifies that HCO is Any legal person (i) that is a healthcare, medical or scientific association or organisation (irrespective of the legal or organisational form) such as a hospital, clinic, foundation, university or other teaching institution or learned society (except for patient organisations within the scope of the EFPIA PO Code) whose business address, place of incorporation or primary place of operation is in Europe or (ii) through which one or more HCPs provide services. Question No. 24: How will physicians, who are not members of the Czech Medical Chamber and work e.g. in pharmacoeconomics or organize seminars, trainings, etc., be identified if they sign a consultancy contract with a pharmaceutical company? Answer: If it is a physician who is not registered at the Czech Medical Chamber, then he cannot prescribe or purchase. IT means that no information about such a physician will be disclosed. Question No. 25: Will transfers of value be reported to non-physicians (e.g. pathologists, biologists, biochemists with the title RNDr. or Mgr.) or how will they be identified? Answer: Transfers of value to non-physicians, i.e. persons who are not authorized to prescribe, administer or supply human medicinal products, will not fall under the Disclosure Code. Question No. 26: If a physician has an IN and values are transferred based on an invoice issued by the physician, will this be reported as an HCP or HCO? Answer: A physician physical entity who can be identified based on the registration number of the Czech Medical Chamber will be registered under this number as an HCP. IČ (IN) does not turn a physical entity into a legal entity. Question No. 27: Does AIFP or EFPIA set, in connection with the Disclosure Code, a fair market value for individual activities? Answer: A fair market value is a price agreed upon between two parties and differs depending on the place and time of the agreement as well as on the customs in the specific professional area. Therefore, a specific fair market value is not set anywhere because it is not possible to set it globally. However, I should add that it is possible to deduce from the Disclosure Code certain conditions for setting the fair market value of individual activities. The value must be fair and correspond with legitimate and professional know-how and services that are provided.

12 Question No. 28: Is it necessary to include a disclosure provision in the contracts that concern aggregately disclosed data on R&D? Answer: The Personal Data Protection Act requires informed consent only if personal data are disclosed. However, in this case, no personal data will be disclosed. Pursuant to Section 4 of the Personal Data Protection Act, personal data are understood to mean such information that concerns a certain or identifiable data entity where such an entity can be identified, directly or indirectly, based on some identification signs. However, this is not the case of aggregate disclosure since individual physicians cannot be identified from remuneration information or aggregate data. Therefore, it is not necessary to include a disclosure provision. It is possible to include consent in the contracts in order to show openness toward contractual partners and to promote the Disclosure Code. However, such consent will differ from that available on the AIFP intranet. The provision should just mention that remuneration information will be combined with that of other entities and that these aggregate anonymous data will be disclosed for the purposes of the Disclosure Code. In connection with the aforesaid, I would like to point out that entities are understood to mean only physical entities since the Personal Data Protection Act defines only physical entities, to whom personal data pertain, and not legal entities. Therefore, no consent is necessary in the contracts executed with hospitals. However, it is possible to include the aggregate data disclosure provision in order to increase transparency and openness toward contractual partners. This can be surely recommended also due to the fact that some contractual partners may have a confidentiality provision in their contracts, which could contradict the disclosure conditions in the Disclosure Code.