Headlines like these make the entire pharmaceutical industry hold its breath. The industry of manufacturing and selling drugs is rightly heavily regulated and whilst this can make it challenging to market and sell a medicine, there are very serious consequences for getting it wrong, as evidenced by the headlines above.
Regulation and Industry Codes of Practice
Medicines regulatory agencies around the world enforce the statutory frameworks for medicines and based on those legal obligations, industry trade associations publish their codes of practice for the pharmaceutical industry, setting out appropriate rules and standards for interactions between the pharmaceutical industry and healthcare professionals (HCPs). For instance, in the UK, the Association of the British Pharmaceutical Industry (“ABPI”) publishes its Code of Practice for the Pharmaceutical Industry (the “Code”). The Code is self-regulatory but reflects UK (and in many cases European) legal requirements on the advertising of medicines.
Whilst the burden of compliance when interacting with HCPs can sometimes feel like a massive hurdle to overcome, having a clear process and well drafted contract templates to record and regulate interactions with HCPs appropriately and in compliance with legal and Code requirements, can save considerable time, as well as protect all the parties involved.
Here are some practical tips therefore to help ensure you have good contracting practices and processes in place when contracting with HCPs:
Engagement with HCPs
First things first, we must understand who healthcare professionals are. As per the ABPI Code of Practice, an HCP is one who in the course of their professional activities, may administer, prescribe, purchase, recommend or supply a medicine. The terms ‘healthcare organisation’(HCO) and ‘patient organisation’ (PO) are also defined in the Code.
There are various reasons for the pharmaceutical industry wanting to interact with HCPs. Typically, a pharma company may engage with an HCP to obtain expert advice (as part of an advisory board), to develop patient support programmes, in the provision of research grants, engaging them to speak at an event, for technical training / educational development of the HCPs, or for availing consultancy services. Irrespective, any engagement with an HCP needs to be well-documented in the form of a contract. Depending on the nature of the engagement, the company needs to ensure it has the correct contract template to record their understanding of the terms. To decide which contract template to use in what situation, one must have a clear understanding not only of the transactional side of the HCP engagement (the nature and details of the interaction), but also of the different contract templates available.
Understanding Contracts
At this stage, it is imperative that we understand why we need contracts in the first place. Firstly, compliance with other regulations, like anti-corruption laws can best be evidenced through a contemporaneous written agreement. This itself is a very good incentive to create contracts which clearly spell out the arrangement between the parties. Then, there are rules like the ABPI Code of Practice which mandate a written contract to be in place in advance of the event taking place (e.g. Clause 23.2, Clause 24.2). Over and above this, most companies usually call for stakeholders to maintain the necessary paperwork justifying their actions, approvals, etc. through their internal policies and SOPs. Therefore, it becomes a matter of compliance for all those involved in the process.
Let us now spend a brief moment to see what a contract really is. There are a few elements that need to come together to constitute a contract – offer, acceptance, consideration and intention to create a binding relationship. Sometimes all efforts and planning of big corporates are wasted due to a minor oversight, resulting in there being no binding ‘contract’ in place. And yet, sometimes the conditions of a contract are easily satisfied in a simple newspaper advertisement! Legally speaking, a contract needn’t be in writing to be valid. But for the purposes of this subject matter and because it is often a Code requirement, we rely heavily on a written contract, and for it to be as detailed as possible.
What YOU need to worry about
Sometimes putting a contract in place is seen as a task for the legal department. Increasingly however, for standard types of agreements, contract management processes require business stakeholders to own and manage the contracts they are entering into and they therefore need to understand and navigate through the fundamentals of this much-needed paperwork and become empowered to ensure it is completed correctly. For instance, it might help the liaising personnel to check (and provide inputs to) the following sections of an HCP contract.
- Purpose of engagement
- Description of the services, which must be clear and precise, not vague and general
- Date of commencement and termination of services
- Person or entity performing the services
Creating an Efficient System
There are numerous ways in which a company can ensure proper documentation is being completed. One could consider incorporating some key principles into their system, like the ones listed below, to maintain efficiency and compliance with the laws:
- A clear step-by-step process, accessible to all
- Training to stakeholders on the process
- Guidance on which template to use
- Diarising dates when contracts are required
- Setting reminders with stakeholders – internal and external
- Contract review and approval processes
- Project management system, which indicates the status
- Maintaining transparency
- Repository for storing all contracts
The Final Checklist
If managing HCP contracts still looks like a Herculean task, let’s try to break it down into simple steps:
- Remember to choose the right contract template.
- Ensure that the commercial terms are fully populated in the contract.
- If legal review and approval is part of your internal process, contact the legal team early to support you and allow sufficient time.
- Ensure agreements are signed in advance of the event.
- Ensure stakeholders are properly trained both on your review and approval process as well as on the proper completion of your contract templates.
For companies seeking to improve their HCP contract management processes or develop or refresh a suite of HCP contract templates, LS Law can provide full support in this regard. We can also assist in developing playbooks to ensure stakeholders complete HCP contract templates appropriately and can provide and roll out training programmes to educate staff on contract management processes and HCP contract templates.
If you have further questions or require further assistance to improve your HCP contract templates or contract management processes or would like more details of our contract templates deck, please reach out to us (info@lslawservices.com).