Before it even passed as legislation, Allergan proactively took steps to meet the mandates listed in the Physician Payments Sunshine Act and ensure that technology was in place to support overall corporate compliance and risk management efforts.  In doing so, Allergan implemented BEACON – a formal compliance and reporting program subjected to regular reviews, built on Metastorm BPM.  Rather than just focusing on reporting, Allergan chose a Business Process Management (BPM) solution to ensure it had better insight and control over its underlying business processes, as well as the ability to proactively analyze and making ongoing improvements.

In an article published by CIO Magazine last week, How Botox Battles Compliance Wrinkles, Allergan CIO Sue-Jean Lin discusses how Allergan was able to meet its new compliance burdens using Metastorm BPM.

For more information about Metastorm’s Aggregate Spend Solution, I encourage you to sign up to watch a free demo and explore our Life Sciences solution page.

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The Business Agility and Process Optimization Enabled by BPM and SOA contest highlights the business success stories and lessons learned to provide proof points and insights for other organizations considering or pursuing BPM, SOA or combined BPM-SOA adoption.

AmerisourceBergen is one of the world’s largest pharmaceutical services companies serving the United States, Canada and selected global markets, and works closely with manufactures of branded pharmaceuticals, generic pharmaceuticals, biotech and specialty drugs, over-the counter remedies, and health and beauty aids. 

AmerisourceBergen has deployed over 200 processes using Metastorm BPM! To govern its business process management initiatives, AmerisourceBergen has created a Center of Excellence and has seen millions of dollars in savings to date.  In one of its most recent projects, AmerisourceBergen was able to leverage Metastorm BPM to extend and augment is new SAP implementation.

At Metastorm, we are dedicated to building software that helps organizations focus on the right business improvements to drive business change, optimization and effectiveness.  We are very proud to see AmerisourceBergen, and all of our customers, recognized for their commitment to implementing strategic business process improvement initiatives.   Check out AmerisourceBergen’s customer success story to learn more about its success in deploying BPM in the pharmaceutical industry.

Metastorm solutions can be tailored to fit all of your organizational needs.  Visit our solutions page to find more information about how your organization can benefit from implementing Metastorm’s leading suite of Business Process Management, Business Process Analysis, and Enterprise Architecture software.

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• “Allergan to Pay $600 Million to Settle Botox Probe” –ABC News
• “Allergan Settles Charges It Went Too Far Marketing Botox”  –NPR News
• “Allergan Will Pay Fine, Plead Guilty to Misdemeanor” –Bloomberg
• “Botox Whistleblower Case Settles for $600 Million” –Trading Markets
• “Feds Wrest $600 Million Settlement from Botox Maker” –Consumer Affairs

Clearly there is a very strong negative sentiment regarding this issue. The last headline above is one all pharma companies should be worried about – because the same risk could be looming for other companies in the space. The notion of the U.S. Federal government wringing money from a corporation in the name of protecting consumers is a strong driving force behind the recently passed Federal Physician Payments Sunshine Act, as well as numerous state laws that are already in force and several that are currently being debated.  The new mantra is transparency – under the banner of promoting safety, consumer protection and ethical business practices.  

From my point of view as an industry consultant, pharma companies (and biotech and medical devices too) need to hear loud and clear the underlying message in the Allergan incident and in recent legislation, and take decisive action to prepare for the onslaught of potential inquiries and investigations they may face.    Most importantly, companies need to take immediate steps toward defining and implementing a compliance and governance foundation, along with a set of agile controls, to manage within the guidelines of current regulations and have the flexibility to adapt to future changes and extensions.

Unfortunately, what you won’t find in any of the 300+ articles referenced above – apart from one –  is any mention of the proactive steps that Allergan has taken to address not only this specific instance but to implement go-forward controls and systems to enhance transparency, better enforce compliant business practices, and ensure they are prepared for future regulatory change.   In addition to developing a formal compliance program subject to regular reviews, Allergan “further enhanced its compliance program by developing additional comprehensive policies and procedures, supported by significant technology investments, including its state-of-the-art Business Execution Automated Compliance Navigator (BEACON) compliance system.”[ii] This seemingly minor, yet crucial omission in the media coverage of this event should not go overlooked by industry peers.

Every Life Sciences company can and should learn from what happened to Allergan and how it handled the resolution of these serious issues.  The BEACON application referenced was envisioned to provide both compliance process controls as well as flexibility to support future changes. It is built on the Metastorm Business Process Management (BPM) software platform to provide the controls, rules and documentation necessary for resolving the current situation as well as preventing future incidents.

Recently, the area of payments and promotions has exploded in both regulatory and public scrutiny. Most Life Sciences companies are now actively thinking about or looking for process controls and technology capabilities to prevent these costly events from occurring.

Leveraging our experience in helping pharmaceutical companies implement flexible, unique compliance systems that conform and adapt to changing regulations – with business process management and improvement at the heart of the platform, Metastorm has developed an Aggregate Spend Management solution that addresses the two fundamental aspects of the business problem. The first component is the management and reporting of expense data that must be reported to multiple state governments and soon the federal government as well. Secondly, and more importantly in my view, the business processes that are invoked to request/approve/execute/reconcile spend are critical to ensuring the spend data is not only accurate, but also compliant with various jurisdictional regulations and policies. In contrast to legacy vendors who focus solely on data aggregation for reports, Metastorm delivers both simplification of the state reporting in addition to automated, web-based processes and forms for spend request, review, approval, execution, reconciliation and documentation. This distinction is critical because, ultimately, Life Sciences companies will have to demonstrate to regulators, investigators and the public the ability to immediately generate justification for each reported expense, prove each expense’s business value and cite who provided the advanced authorization of the expenditure before it was released.

As evidenced in Allergan’s own press release on the settlement, Metastorm’s Aggregate Spend Management solution and its underlying BPM software platform have been a major component of Allergan’s approach to resolving the systemic issue by approaching it holistically and proactively. Watching a 6-minute demo of the solution is a good first step to help Life Sciences companies understand what is needed to put a solid compliance and governance solution in place now – to avoid potentially disastrous issues later.

_______________________________
[i]  2009 Total Revenue as reported in Allergan’s 2009 Annual Report
[ii] “Allergan Resolves United States Government Investigation of Past Sales and Marketing Practices Relating to Certain Therapeutic Uses of BOTOX(R)”  official company press release dated September 1, 2010

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In this video interview, Tom Holmberg, senior business process analyst for Allergan, provides insight into how business process initiatives have become powerful investments for Allergan’s long-term organizational goals.  Holmberg explains how Metastorm’s combined platform of enterprise architecture, business process analysis, and business process management became a priority within their organization.  Using these combined strategies, they enhanced their organizational structure and identified opportunities to deliver more optimal business results. Implementing business process initiatives helps users see into their current organizational structure and ensure that they are deploying the most efficient time-to-market processes—thus, optimizing their organizational structure and producing a competitive market advantage.  

Check out the complete season of Metastorm Customers Speak Out on our Metastorm Media YouTube channel, subscribe to the Metastorm iTunes Podcast, or visit the Metastorm customer testimonial page.

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Charles Dickenson’s A Tale of Two Cities describes the economic disconnect between the lavish lifestyles of the French Monarchy and the marginalized citizens of France.  

This same drama plays out in organizations where regional departments insist on maintaining their own processes in order to accommodate their “regional differences.” These departments may not understand how their “superstar” performance may actually be causing underperformance in another department, or even the company as a whole. 

So what’s the cause of this process disparity? Well, the root cause is often “a tale of two processes.”

 From the perspective of the regional department, their unique processes allow them to produce at a high rate of efficiency.  They may not understand why the corporate office wants them to tweak their excellent processes.  Let them eat cake!

From the perspective of the downstream department, their daily work is chaotic due to the high level of process variation.  As a result of this variability the customer processes lose output efficiency – thereby becoming rate limiters to the downstream processes.  The consequences are unfortunate for the customer department as they become marginalized in the company. Cursed bourgeois regional departments!

Just as in the French Monarchy, executives in the company may understand that there are issues, but do not understand the root cause of the problem, scope of the issue or even the solution of how to fix it. 

Yes, the French peasants did eventually revolt against the governing class and threw the country into chaos, but I am not suggesting that you to go out and storm the executive floor of the office with torches and pitchforks (that may not go over well)!  

Instead, you should utilize the discipline of Business Process Analysis to help the entire organization see the “big picture,” to see how their actions are effecting the organization as a whole, and to understand that this “tale of two processes” needs to be remedied with a process revolution.   

Leading a process revolution must be conducted with participation of all key stakeholders, either as active participants or decision makers – just like we’ve learned in revolutions, success comes from accord.

The first step is developing the current state models with all the key stakeholders.  This model serves two purposes: first, it’s a basis for future state analysis; and second, it’s an eye-opening form of “group therapy” that allows all of the departments to understand how their processes impact other departments and the company as a whole.  The current state meetings sometimes start with short tempers and accusations, but will quickly turn to understanding and “hugs” as true complexity and  processes inefficiencies are exposed. 

Next, future state process models are developed with the same stakeholders who should now be refocused on improving the organization (the best revolutions work when you plan your post-revolution environment ahead of time!).  The future state models should drill down deep enough to expose the roles and responsibilities, deliverables, triggering events and decisions.  Through this exercise, a careful examination of regional / functional processes should be conducted, and a “best practices” approach that can be used by all departments should be explored.

And just like is typical to most revolutions, the improvement phase can have its own issues as vested interests in controlling new departments, roles and retaining power can muddy up the waters of forming a new process. This is where Business Process Management can come in handy, because the organization will have a way to enforce the changes, and keep the process revolution moving forward!

So my fellow revolutionaries, good luck, and Viva le Process!

==========================

Tom Holmberg is the Senior Business Process Analyst at a pharmaceutical company. Tom is responsible for all aspects of Business Process Analysis within Research and Development. His current focus is integrating Enterprise Architecture with the Business Process Architecture. He has 11 years experience in process optimization with specialty in aligning talent / technology / business process. Tom has worked in the Pharmaceutical, Medical Device and Supply Chain Industries.

Tom holds a B.A. Psychology with an emphasis in Industrial / Organizational Effectiveness; Masters of Business Administration from University of Phoenix and a Lean Six Sigma Black Belt Certification from the University of California, Irvine.

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The inclusion of the Physician Payments Sunshine Act in the sweeping healthcare reform is not only a vehicle for transparency, but also for financing the overall cost of healthcare in the US. In my humble opinion, given the sufficient “advanced warning” provided – the bill passed on March 23, 2010, and physician payments tracking is required starting  January 1, 2012 – we are going to see the federal government hand out hefty fines for violations (up to $1M) on a regular basis.

Unfortunately for the Life Sciences industry, there is little sympathy given for large (or even small) payments – “transfers of value” as the government calls them – to doctors and other healthcare providers and organizations (known as HCPs and HCOs respectively). While it may be difficult to defend the clinical usefulness of sending a doctor to a conference in an exotic location, there is a true need for a healthy relationship between clinicians and Life Sciences organizations, and that need isn’t going away.

After all, doctors and other prescribers ultimately put new products to use when they come to market, and therefore represent a key customer segment. The industry also relies on clinician participation in current and future clinical trials of new medicines and medical devices. The challenge is how to maintain healthy interactions with HCPs and HCOs without creating a conflict of interest or the appearance of impropriety.

There are already a host of state regulations in place aimed at this problem; and more are on the way – making it increasingly difficult to navigate this delicate space and stay on the correct side of the law. Add to this the complexities of operating in and around major metropolitan areas that straddle state borders (New York, Boston, Chicago, Washington, D.C., Philadelphia), and the effort to identify and track every HCP’s state of licensure versus their state of residence and the problem of just knowing which provider is which quickly mushrooms.

Clearly a technology solution is needed.

For compliance, there are two main components required – data and process. While most large and even medium-sized Life Sciences companies have a customer master data solution in place, the quality of the data is a problem – “Garbage in, garbage out” – as the saying goes. In order to ensure quality data, the process by which said data is captured and entered into the master data solution is critical. Business Process Management (BPM) can solve this problem in two fundamental ways.

First, from the compliance standpoint, having standard processes that are controlled and enforced ensures that every payment has been approved following corporate compliance policies as well as all state and federal regulations. Furthermore, the flexibility that BPM provides allows companies to develop the processes required today knowing that these and the business rules that drive them can be easily adapted as the regulations and reporting requirements evolve.

Second, from a master data perspective these process controls also ensure that records of payment are added to the primary data source only after they have been officially approved. Each payment amount is confirmed and reconciled after the event takes place and an actual payment is made. This ensures that all of the data kept within the master source is accurate and was properly approved based on the rules at that point in time.

Taking a BPM approach addresses both sides of the compliance problem. It also provides the quality data and recorded approvals that, as part of the Physician Payments Sunshine Act, the US government now requires beginning January 1, 2012. The challenge and opportunity now becomes ensuring that the solution is in place in time to start tracking, and provide the organization an opportunity to review 2011 spending trends prior to compliance issues “going on your permanent record” with the Department of Health and Human Services in 2012.

This approach will allow the organization to ensure all compliance guidelines are being followed, HCPs/HCOs are not being overexposed for spend and provide time to modify compliance policies and the Aggregate Spend application itself before federal tracking begins. Additionally, to follow the new regulations, all Life Sciences manufactures whose products are reimbursed by any government program (Medicare, Medicaid, SCHIP) must have an Aggregate Spend Management solution rolled out and ready for use by the end of this year.

In order to roll it out by that time, you really should be starting to design and build it yesterday.

But fear not – Metastorm has already successfully deployed its Aggregate Spend Management solution for a number of our top Life Sciences clients, and our dedicated Life Sciences practice has the experience and tools to help your organization assess your process, data, applications, compliance and organization to quickly scope a solution. If you start now, end of year is completely feasible and your executives can rest easy knowing that their organization will be tracking all physician spend, will have the quality data available for review, and will still have time to make changes prior to the first federal reporting period.

For more information, please review Metastorm’s Aggregate Spend Management Solution brief or join us at any of our upcoming events. We’re here to help.

===========================

Ethan Smith is the Director of Life Sciences Solutions at Metastorm where he oversees business and account development and solution creation for Metastorm’s global life sciences customers, partners and prospects.

Ethan has extensive experience in business process consulting in the life sciences industry. His areas of expertise include enterprise BPM strategies as well as the utilization of Metastorm BPM® and Metastorm ProVision® to establish Process Centers of Excellence. He has driven process initiatives across research and development, sales operations, incentive compensation, physician spend management and compliance functions. Prior to Metastorm, Ethan spent over 10 years in process consulting for the life sciences and insurance industries.

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Check out this webinar, Countdown to Life Sciences Aggregate Spend Compliance, to learn how Metastorm’s Aggregate Spend Solution can help Life Sciences organizations manage, track and report on all physician payments by:

• Setting active alerts for corporate compliance policy and regulatory requirement breeches
• Defining and approving payment of all physician budgets and operating plans
• Enforcing proper approvals dynamically based on business rules governing giving

Webinar Date: Tuesday, April 6, 2010
Session1: 6:00 am PT / 9:00 am ET / 1:00 pm GMT
Session 2: 10:00 am PT / 1:00 pm ET / 5:00 pm GMT

Register for 9:00 AM EST session.
Register for 1:00 PM EST session.

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According to the corresponding release this number is “the equivalent to total revenue for a top 20 pharma simply disappearing each year.”

The culprit? Revenue leakage.

According to the release, one of the major sources of revenue leakage, which costs pharmaceutical companies 4.4% of their overall revenue per year, is chargeback discrepancies. The release also states that “63% of manufacturers believe chargeback-related revenue leakage is a serious problem. This is up nearly 25% from a similar survey in 2006.”

With these staggering numbers it is very apparent that pharmaceutical companies have a huge problem on their hands. Fortunately, there are technologies available that can alleviate revenue leakage, and help these companies realize significant ROI along the way.

 For example—one of America’s largest pharmaceutical services companies, which ranks among the Fortune 25, has utilized the functionality of Metastorm BPM® to streamline and automate its contracts management and chargeback processes as well as over 175 other process across the enterprise, enabling it to:

• Establish more efficient and accurate tracking capabilities,
• Reduce chargeback disputes,
• Rapidly and efficiently  respond to changing market conditions, and
• Improve transaction transparency and supplier collaboration.

With the help of Metastorm BPM, these and many other benefits have been realized, enabling this company to achieve an exponential return on its investment, and helping it to avoid revenue leakage from poor process management.

Want to know more? Watch this customer video testimonial, and read this solution sheet.

You can also check out the Solutions for Life Sciences page on our website.

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The award recognizes organizations that have excelled in implementing innovative process improvement solutions to meet strategic business objectives.

AmerisourceBergen has certainly done exactly that—to date the organization has established a BPM Center of Excellence, deployed and optimized nearly 200 processes throughout the enterprise, and has approximately 3,000 users on the Metastorm software globally.

The AmerisourceBergen award entry highlights the company’s senior executive support for Metastorm BPM as an enterprise solution. It also outlines some of the key objectives that BPM software helps the company meet on an ongoing basis, including:

• maintaining high quality standards while managing growth,
• creating efficiencies,
• making better and faster decisions, and
• ensuring regulatory and legal compliance

“The pharmaceutical industry is extremely complex and competitive, and AmerisourceBergen has embraced the Metastorm BPM suite as an enabler to help effectively address market demands in a highly competitive environment,” stated Manoj Kumar, manager of Business Process Automation at AmerisourceBergen. “The results and return on investment have been significant.”

We congratulate AmerisourceBergen and Manoj Kumar, the company’s manager of Business Process Automation, for their dedication and hard work. Receiving this award is a great recognition of the broad scope and remarkable success of its BPM initiative.

To hear more comments from Manoj Kumar, listen to this audio clip

Watch the video below to learn more about how AmerisourceBergen leverages Metastorm BPM.

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“As we rolled out standard end-to-end business processes to users, BPM tools enabled users to see the big picture and put their role in context by understanding upstream and downstream process and data flows,” said an executive of the pharmaceutical company.

The article highlights how the company used BPM for various purposes from clinical trials to supply chain optimization. It started adopting BPM so much in fact; that it established a BPM Center of Excellence.

The article further discusses how BPM can be used for other purposes within the pharmaceutical industry such as integrating and managing communications between various manufacturing-related systems

Read the full article for more details on how the pharmaceutical company was able to fully adopt BPM throughout the company.

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Needing to coordinate clinical submissions with a global workforce while meeting FDA pharmaceutical guidelines, the company decided to use Metastorm BPM to create a 24 x 7 automated lifecycle of its clinical submissions. Deploying BPM, the company was able to generate metrics and reports quickly, increase employee productivity and decrease the standard turnaround time required to submit reports to the FDA while handling all document preparation offshore.

Below a senior systems analyst delves further into the advantages of using Metastorm BPM in his global clinical team.

Please visit Metastorm’s Web site to learn more about its solutions for pharmaceutical companies.

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