The 2008 Code will be launched on 1 May and comes into effect from 1 July this year. Companies are given a three-month grace period to bring their existing activities into line, but for all new activities 1 July is the key date.

At the time of writing, the ABPI board has yet to ratify the final changes to the UK Code, so this article will focus on those aspects that are definitely included (as a result of the ABPI's membership of European industry body EFPIA).

Of course, the key question is, 'what's changed?' Depending on where you work in industry the answer might be 'not much' or 'Oh wow, what a lot to take on board!'. Let me explain.

The majority of changes in the 2008 Code simply bring into sharper focus the need for transparency in our interactions with healthcare professionals.

This is not too surprising. We all know that there has been increasing public (and political) pressure on the industry of late about the influence it has on prescribers and the influence it has with decision-making authorities.

However, international legislation is an additional factor in the need for change, particularly in the areas of anti-bribery and anti-corruption.

Transparency is key

The implication of greater transparency is¿more paperwork. Essentially, in order to be open about our dealings with healthcare professionals, we need to document what those interactions are and we need their permission to share the details of those interactions. (No permission, no declaration, no interaction!)

Some companies already have tight documentation procedures; others have operated more informally. Typically, companies with a strong US presence are likely to experience less of an impact from the 2008 changes than those whose business focus has been primarily on Europe.

Engaging healthcare professionals to provide services

History will probably show that most people will remember the 2008 Code as the one that required all speakers to have formal contracts. Most companies are used to having contracts in place for advisory board delegates. However, contracts will now be required every time the company engages any healthcare professional (HCP) to undertake any service. So, at its most basic level, when a sales representative invites the local hospital consultant to speak at their evening meeting, that consultant will be required to sign a formal contract. The nature of the company will determine the degree of formality, the style of the contract and its exact content.

There are several additional factors that need to be considered when engaging services from HCPs. Firstly, there must be a legitimate need for those services, one that has been clearly identified. The service provider must have the necessary skills and have been selected because of them. The company employee who selects them must have the necessary expertise to make the choice.

So, the company will need to prove that the reason a particular consultant was chosen to speak is because they were the most relevant to the subject matter, not because they were an advocate of the relevant product. In practice, therefore, it may be difficult to justify allowing representatives to issue contracts locally - without at least line-manager review of the project first. In some companies a more centralised review process may be enforced to allow the company to demonstrate separation between the choice of speaker and the rep's target key opinion leader (KOL) list.

Central review is made more likely by the fact that companies will need to keep records about the services provided by HCPs. And, of course, companies will need to keep a copy of the contract itself somewhere. There are obviously numerous ways this can be achieved, however the most likely two are to either submit all paperwork in advance for central pre-approval, or trust that everything will be completed locally and that the representative will submit completed paperwork after the event.

In either case there will be the need for some form of central storage of documentation. And there will need to be sufficient information to justify the event to auditors at a later date. This information is likely to include the agenda, the attendees, a copy of the contract and the justification for the choice.

Remember, all this is needed each and every time a company wants to pay a healthcare professional to do something for them. This includes advisory boards, writing articles and clinical research. The one exception is remote market research, such as a one-off telephone survey, where the amount of money involved is small.

Contract content

The content of the contract is another key factor to consider. It needs to specify what the healthcare professional is being asked to do and how much money they will be paid for doing it. This sounds obvious, however in most companies this will mean that a different contract will need to be signed for each type of activity. A typical KOL would sign different contracts for: speaking at a national meeting; speaking at local representative meetings; giving advice at an advisory board; writing an article; attending market research; and speaking to company employees at a sales conference. And those are just the activities on behalf of the UK company. International KOLs could end up with even more contracts.

To mitigate against healthcare professionals becoming fatigued from signing all those contracts, one obvious solution could be to issue a single agreement that lasts (say) a year and covers all possible activities.

For example, Dr Smith is going to be issued with a contract that allows her to speak at company-organised meetings throughout 2009. Once signed, the contract is sent in head office and stored away. Now, whenever Dr Smith is asked to speak, a contract is already in place so the rep's life is much easier. However the company now has to devise a method by which all of Dr Smith's speaker meetings are linked in some way to her contract - so that a later audit can check that the Code was applied correctly. Also, in many companies the very existence of such a contract will mean that the finance records will also need to link any payment issued back to the original contract, so some re-programming of computer systems may be required.

Checking an appropriate contract is in place will be an issue for the company compliance team. So a tracking system will be necessary, and may mean upgrading existing CRM systems or introducing simple manually-operated spreadsheet records. In any event, it is likely to require additional resources.

On top of this, auditing demands could mean the company will need to be able to link the contract, the activity, the justification for the activity and the selection criteria by which that specific healthcare professional was chosen.

At a very practical level, the company needs to work out how to get the contracts to the service provider (since we are engaging their services, it is not really appropriate to call them customers). Reps could print contracts directly from an intranet site, but this raises the question of how the signed contracts would be returned to the storage site.

The expectation is therefore that many companies will end up increasing their central review of local meetings. However, because contracts are not required for speakers at independent third-party events, we may see an explosion in the number of private companies organising meeting that reps simply sponsor. There are yet two further considerations about the contracts.

Fair market value

First is the requirement that all payments reflect 'fair market value'. Effectively, this means that the same type of person should receive roughly the same payment for providing the same type of service. Dr Smith can not be paid 25% more than Dr Patel, simply because she is a higher prescriber of company products or because she has always received a certain level of payment. While this latter point is not necessarily defined in the Code itself, it is nevertheless an implication of the Code.

How else to prove that a payment is not an inducement unless every equivalent service provider earns the same amount of money? So, expect to see the creation of fair market value tables (or honoraria rates tables) in companies that don't already have them.

The final implication of the contracts (yes, we get there at last) results not from an absolute requirement of the Code, but from a 'strong recommendation'. EFPIA's European Code strongly recommends all contracts require healthcare professionals to publicly declare that they have received payment from the company, whenever they write or speak in public about any matter related to the subject of the company or the services they were contracted to provide. Companies are particularly encouraged to mandate such a declaration for healthcare professionals who still practice medicine part-time. Therefore there are implications for contracts of employment too.

Many HCPs will be perfectly comfortable with this requirement for transparent declarations; others will not. It is possible that our industry will experience a few challenging conversations later this year - similar to those with patient groups in 2006. However, at least there is not (yet) a requirement to publish a list of those who provide services.

One subject not covered in the Code is that of expenses. In many companies, the payment of expenses is also likely to require the existence of a contract or some other paper-trail to justify why the expenses are required.

Contracting with institutions

There are occasions on which it is an organisation that provides services to the company, rather than an individual. Wherever this is the case, a formal contract is now required. In most UK companies, this is already the case anyway, however there are situations where transactions simply result from the raising of a purchase order in response to an informal quote. All payments to institutions for the provision of services must be connected with research or to support healthcare.

Donations and grants

The main change here (surprise, surprise) is the requirement for payments relating to donations and grants to be 'documented and kept on record'. However, in addition, companies are 'encouraged' to make information about the donation publicly available. Since it is only an encouragement it would be difficult to see how the PMCPA could rule a breach of the ABPI Code if companies choose not to do this. However, companies must carefully consider the PR implications of not doing so.

If the donations are not declared, then investigative journalists, shareholders and other stakeholders may want to know why. And, of course, in order to make such a declaration, companies may require the permission of the recipient of the funding. This effectively means many companies will put a formal written agreement in place for all donations too - which some organisations will not appreciate.

Sponsorship of individuals

Sponsorship and travel grants are still allowed. However, companies now need to justify the selection of individuals. Companies also need to check that the event for which the sponsorship is provided is compliant with the Code. In other words, somewhere in the record relating to the payment of money there needs to be documentation explaining why the attendance of that specific individual was funded (or facilitated) by the company. Plus there needs to be some documentation confirming that the event itself was examined for Code compliance; which might mean that companies need more information about the event than they would normally have requested from sponsorship applicants.

It also means that the age-old argument about pharma not having the right to prevent a doctor attending a meeting just because the hotel was a bit lavish is now dead in the water. Companies simply cannot give funding unless the meeting is in line with the ABPI Code. Truly, the days of the rep cheque-book are numbered.

Clause 19 - meetings and hospitality

Don't worry - there are no major changes here - just a considerable clarification. For some time, there has been debate about whether the rules regarding venue selection and travel class apply to speakers, chairmen and advisory board delegates. The debate is over - they do. Speakers etc. may not travel business class, full stop.

This may be somewhat challenging to those who are asked to attend an overseas advisory board - especially if they already have issues about the wording of the new contracts. But that's life. If HCPs want to be paid for providing services to the industry, they will have to accept the new arrangements.

Summary

So, depending on the way your company currently operates, you will either be nonchalant about the 2008 changes or aghast with horror about the extent to which paperwork and process is about to leap into your everyday business life. This is the new world, and it's here to stay.

Box: Engaging services from healthcare professionals

EFPIA's code covering genuine consultancy or other services says they must, to the extent relevant to the particular arrangement, fulfil the following criteria:

(a) A written contract or agreement is agreed in advance which specifies the nature of the services to be provided and, subject to clause (g) below, the basis for payment of those services

(b) A legitimate need for the services has been clearly identified in advance of requesting the services and entering into arrangements with the prospective consultants

(c) The criteria for selecting consultants are directly related to the identified need and the persons responsible for selecting consultants have the expertise to evaluate whether the particular healthcare professionals meet those criteria

(d) The number of healthcare professionals retained is not greater than the number reasonably necessary to achieve the identified need

(e) The contracting company maintains records concerning, and makes appropriate use of, the services provided by consultants

(f) The hiring of the healthcare professional to provide the service is not an inducement to recommend, prescribe, purchase, supply, sell or administer a particular medicinal product

(g) Compensation for services is reasonable and reflects the fair market value of services provided. This means token consultancy arrangements should not be used to justify compensating healthcare professionals

Steven Gray is a chartered marketer and former compliance officer who specialises in providing business-friendly compliance services to the pharmaceutical industry.

For further information, visit www.stevengrayconsulting.co.uk