Navigating a transforming life sciences landscape

Top trends and risks for 2018

The life sciences industry is transforming. Organizations face changing regulatory requirements, potential constraints on their use of patient data, evolving relationships with payers, fierce competition on a global playing field, and the need to respond to pricing pressure with proof of a product’s value. These challenges are forcing organizations to re-examine their business portfolios, go-to-market strategies, and customer engagement models to accelerate growth and enhance shareholder value.

All of these changes bring both risks and opportunities. Identifying the fine line between the two factors is critical. This white paper is designed to guide you in navigating today’s risk environment. In many cases, risks and related control frameworks are interrelated. Our hope is that these insights will be catalysts for new thinking as you conduct your annual risk assessments and reflect on how you are covering these risks over time through your audit universe. We have also highlighted broader trends that may have also hightlighted broader trends that may have a bearing on the evolution of your function and setting your strategic priorities.

Governments are under tremendous pressure to curtail healthcare spending. And pharmaceuticals represent approximately 20 percent of the total spend, according to the Organization for Economic Co-operation and Development (OECD). The increase in high-cost specialty medicines and aging populations has spurred a debate about prescription drug spend sustainability and the need  for a shift to value-based-pricing models. In the United States, patients are increasingly bearing the cost burden of prescription medicines, and manufacturers have responded with co-pay assistance coupons and patient assistance programs, raising new and different compliance risks.

Political and regulatory scrutiny of drug pricing practices remains intensive in the United States, with pricing risks in markets like the EU and China on the rise. One-third of all open competition law cases in the United Kingdom relate to pharmaceutical pricing. Price gouging, specialty pharmaceutical pricing, coupons, and assistance programs are all topics of regulatory attention and ongoing probes.

United States government pricing programs continue to be an area of elevated risk and regulatory attention. Not only are these programs highly technical and inherently complex, but expectations also continue to change (e.g., Medicaid Final Rule, 340B developments), authoritative guidance is often unclear and sometimes conflicting, transactional data sets are expanding, and expectations for calculation precision are high.

Patient support programs (PSPs), often managed through HUB services and specialty pharmacies, are designed to improve patient outcomes and experiences. PSPs have expanded their focus from adherence to other services including benefits verification, insurance counseling, appeals support, appointment scheduling and reminders, financial assistance (free or discounted drugs), disease education and resources, patient counseling, patient surveys, rewards programs, and refill reminders.

While these services can have a positive impact on patient access and outcomes, they also open up channels for potential abuse and noncompliance through greater access to patients, their data, and related decision- making processes. Given these risks, organizations must tread carefully or risk violating anti-kickback statutes and government pricing regulations.

Already, these programs are under heightened regulatory scrutiny. A number of manufacturers are entering into settlements related to alleged kickback violations involving overutilization or inappropriate product utilization, government pricing violations via off-invoice discounts, minimization of product risks, and failure to report adverse events, off-label promotion, and inadequate safeguards over patient data and privacy.