This is Part 2 in our blog series exploring a recent government enforcement action. Haven’t read Part 1 which covers speaker program compliance risks? Be sure to check it out here.

Recently, the Department of Justice (DOJ) reached a settlement with a global pharmaceutical company, resolving allegations that one of its subsidiaries paid kickbacks to healthcare providers (HCPs) to boost prescriptions of their drug. In addition to the allegations regarding speaker programs discussed in Part 1, the DOJ found that the subsidiary deliberately underreported speaker payments to conceal its quid pro quo arrangements. According to the settlement, the subsidiary reported only about 10% of the payments made to each speaker to prolong its scheme.

For example, in the 2020 reporting year, the subsidiary reported just three payments totaling $4,700 for one HCP. However, internal company records later revealed that the provider actually received 61 payments totaling over $91,000.

Ensuring Compliant Transparency Programs

This settlement is a clear reminder that the government is continuously monitoring Open Payments data, and they are using that data as part of their investigations to identify potential fraud. Life science companies must proactively evaluate and strengthen their transparency practices in several key areas:

  • Compliance Leadership and Oversight: Leadership buy-in and the tone at the top are crucial for transparency reporting success. Senior leaders must understand the importance of transparency reporting, advocate for its value and allocate appropriate resources–including staffing–for accurately preparing, reporting and auditing data.
  • Written Policies and Procedures: Comprehensive, documented policies are essential to support consistent and compliant reporting. These policies should clearly outline responsibilities, timeline and standards across all relevant transparency standards, including U.S. federal, state and international requirements.
  • Data Management: Many organizations fall into the trap of compiling, preparing and submitting data at the last minute. Open Payments data management should be a continuous process to provide ample time to review and correct any data issues as well as perform proper auditing and monitoring activities. Consider implementing annual attestations from individuals engaged in HCP-related spend to facilitate a complete and accurate data submission.
  • Data Inventory: It’s critical to identify all sources of transparency data, including third-party vendors. Map out your data sources and trace how an auditor might uncover missing transactions. Document all transparency data flows in a matrix to create visibility and support defensible processes.
  • Auditing and Monitoring: Regular audits and assessments are essential for transparency compliance. Reviewing your transparency program thoroughly now allows you to understand the effectiveness of all systems, processes and controls. A robust audit plan should test your ability to detect missing transactions and provide supporting documentation. Share audit findings with executive leadership using dashboards and KPIs to highlight gaps and improvements.
  • Data Analytics: Data analytics can supercharge your auditing and monitoring efforts. Use analytics to answer key questions such as:
    • Who are the top HCPs and organizations (HCP/Os) that we are spending most of our money on? Are we spending too much money with certain HCP/Os?
    • What is the total number of payments generated by type and purpose for each drug or device?
    • What is the distribution of payments by type for each sales rep, district, region and company? And which HCP/Os are they spending the money on?
    • When it comes to meal costs and venue locations, are payments in line with company policies and industry codes of ethics?

How to Strengthen Your Transparency Program Compliance

The DOJ’s latest enforcement action highlights the urgency for life science companies to proactively assess and enhance their transparency program policies. Staying ahead of enforcement trends starts with a proactive, well-documented compliance strategy.

Ready to revolutionize your transparency reporting process? Discover why MediSpend’s global transparency reporting solution is top-rated by compliance professionals. To learn more about how MediSpend can support your organizations growth while mitigating risk, contact us today.

 

April 23, 2025

Jay Ward
Director, Life Science Solutions