Symptoms And Disease—Why Pharma Transparency/Compliance Professionals Need To Know The Difference
This message carries over from my last blog about my workshop at the PCC 2017.
In that, I spoke briefly about why transparency/compliance professionals need to know the difference between symptoms and diseases when diagnosing pharma spend. Let’s start with an example.
A KOL spend hike is a symptom, not a disease. Diminished profitability in a brand is again, a symptom, not a disease. CIAs (Corporate Integrity Agreements), are again, a symptom, not a disease.
A symptom is something that troubles you, the pharma transparency professional. It is something not easily explained; something with a potentially negative result. But treating the symptom alone would be a shallow exercise. It’s difficult—but more rewarding—to probe deeper for the cause.
How To Separate The Symptom From The Disease
The disease is one—or many—levels deeper than the symptom. This is how we start exploring:
Let’s imagine that your company’s spend against a certain Key Opinion Leader (KOL) is higher than average. Much higher.
- Analyze your pharma spend data for outliers, or anything that alludes to ‘dirty’ data. Missing or double entries, TOVs that suggest a dramatic departure from business practice and so on.
- Once the outliers have been isolated, complementing this spend study with historical and industry data. This would reflect whether the outlier is a function of:
Increased Market Equity For The KOL: Has the KOL published more research? Spoken at more prestigious forums? Provided an industry breakthrough? If yes, it makes sense to spend more in the KOL for years to come.
This may not necessarily be the case, however.
Cost Leverage By A KOL: It’s also possible that a KOL may have diminishing market value—either due to increased competition, inability to keep up with industry demand, or simply because the Opinion Leader has been out of touch. In this case, it is quite likely that your company is overspending on the KOL without any evidence of return. Investigate whether the reason for diminished market value is something that can be corrected, or whether the Opinion Leader has been blacklisted by other pharmaceuticals.
The Short-lived Market Fad: In an effort that becomes more and more aggressive, sales reps tend not to be very analytical when identifying spend opportunities. The pressure to one-up a competitor causes them to make hefty—but not well substantiated—investments in events, physicians and marketing efforts that do not bear out well, or at least not as profitably as they were meant to. Assimilating data by physician, KOL and sales rep will yield patterns which will alert you the next time such spend comes up. They will also equip you with the data needed to refuse an “all the other pharma reps were doing it, so we went with it too” fad, without offending or demotivating the sales team.
Emerging/Declining Trends: Was the KOL a premium good or a good bargain? Pharmaceutical companies who know their data will know when to capitalize on an emerging opportunity. Supporting a rising oncology star can be both opportune and rewarding, if you are amongst the first to do it. Root cause analysis in this direction will also provide your team with a check on market realities. For instance, let us imagine that this KOL is a pediatrician and continues to command top spend for ‘Speaker Events’. Does the demographic of this physician’s practice reflect a consistent population growth rate? Or is it declining? Are their high migration/ageing rates? If yes, this spend would not be justified.
Conflict Of Interest: This is the nightmare no compliance professional wants to wake up to. Was the sales rep in collusion with the physician? Was it working both ways? Higher number of scripts for more spend, or an unusually high spend number for the same or lower number of scripts? Bad news, either way. Root cause analysis will uncover such a conflict of interest, and, with precision, will identify the area where poor due diligence was conducted.
There may be many other explanations of KOL spend. The message that root cause analysis gives us is: Your data is giving you an important message. Know how to read it.