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Pharmaceutical Companies Prescribe Master Data Management to Improve Compliance

Speculation continues to mount whether the federal government will follow the lead of five American states and once again establish new regulations for the Health and Life Sciences industry on physician marketing and spend. The industry has garnered more than its fair share of media attention following on the heels of negative news headlines including the recent Vioxx drug recall, elderly American patients purchasing drugs from Canada, accusations of drug manufacturers price gouging in the face of the AIDS epidemic and Fen-Phen anti-obesity drug lawsuits. Although the Pharmaceutical industry continues to reap strong profits despite facing several recent public relations crisis, the sector is also fighting off a barrage of new regulatory threats in what is already one of the most highly regulated industries.

After having spent millions of dollars on Sarbanes-Oxley compliance, pharmaceutical companies have more recently made significant investments to support product recall requirements, privacy management and marketing opt-in solutions for both patients and physicians and spend management reporting solutions. Given the current uncertain environment, compliance and IT managers continue to grapple to find solutions to address existing and impending regulatory requirements. Remarkably, all of these regulatory issues share one thing in common: namely, the need for reliable control of master data or key business data related to customers, products and locations. Current and accurate knowledge of customer demographics for physicians and patients and their marketing preferences and interactions with the company are no longer simply effective tools for generating new business, but rather critical reference data required for managing regulatory reporting and compliance.

Avoiding Penalties

Take for example Biogen, who earlier this year settled with the state of Vermont for non-compliance with physician spend reporting regulations which resulted in the company paying a $10,000 penalty. Although this penalty is not material, it follows hundreds of millions of dollars of penalties faced by other market-leading pharmaceutical companies related to kickbacks to physicians and it may signal the start of stricter enforcement of what had once been considered trivial legislation. Ironically, these penalties could have been avoided with a reliable regulatory framework in place and now leading Health and Life Sciences companies are looking to master data management (MDM) as the foundation for managing regulatory compliance. Today, master data management is considered a strategic business driver as it enables organizations to unify and consolidate data about their customers, products and organizations; data that is often fragmented across different systems. By creating a centralized master data hub, organizations can deliver the most reliable, complete views of key business data within their existing business processes and more importantly leverage these data assets within operational business processes to remain in compliance, adhere to various privacy requirements and simplify reporting.

Master Data Hubs Provide the Right Regulatory Framework

Given the common data integration issues which span compliance management, companies are now choosing to invest in a technology platform that is able to support their varied and complex compliance initiatives now and in the future rather than addressing each regulatory mandate with a point solution. Today, organizations need to streamline data collection and secure more reliable data in order to adequately meet state compliance mandates concerning sales spend. These same requirements also apply to other strategic initiatives such as marketing opt-in, product recall and pedigree compliance for managing both customer and product master data.

The new battleground for fighting the myriad complex regulations within the Pharmaceutical industry is MDM as it enables companies to effectively manage the complete data lifecycle of physician, patient, employee, and product information. An MDM solution establishes a foundation for reliable compliance management which also effectively reduces the cost of managing new regulations and has been found to create a substantial and ongoing competitive advantage. Building a foundation for managing regulatory compliance is one instance where a sensible investment today can have the potential to reap significant and ongoing financial and business benefits in the future.

MDM Success Translates into ROI

The growing appeal of next generation MDM platforms is that they can be rapidly implemented with flexible data models, can more tightly integrate with enabling technologies and costs can be readily justified with proven return on investment (ROI). For example, one medical device manufacturer identified a $27 million revenue increase and more than $11 million in cost savings related to data infrastructure improvements and reduced third party data spend after embarking upon an MDM implementation. In addition, improvements to both data quality and data access helped the company improve its performance in a number of critical areas such as sales compensation, patient tracing and dosing information, sales analysis and customer segmentation, and improved sales and marketing campaign performance. Another example of MDM success is a pharmaceutical company that estimated $12 million annual revenue uplift from data quality improvements that fed their Customer relationship management (CRM) system. Return on investment results like these grab the attention of senior management and can be used to create a compelling business case for an MDM platform which is able to address more than just compliance - as MDM is also recognized for addressing other strategic business initiatives of an organization.

Reliable Control of Master Data

In a highly regulated industry, Health and Life Sciences companies are also subject to a host of state and federal regulations - some that affect interactions with physicians and others with patients. At the core of these regulations is an organization's ability to access current and reliable information related to a company's interactions with customers, their demographics, and their preferences. After all, without having access to a central repository of reliable information, companies will find it very difficult, if not impossible, to comply. Worse, predicting how regulations will change in the coming years, or determining what unforeseen event that may trigger new regulations, is a near impossible endeavor. Yet, it is certain that new regulations will demand that companies have a more clear understand of who their customers and business partners are and the nature and terms of their business relationships .

Solutions to address existing and impending regulatory requirements all share the need for reliable control of master data - whether to address SOX, physician spend management or customer marketing regulations. This is the reason why leading Life Sciences firms are deploying MDM platforms to build master data hubs as a foundation for managing regulatory compliance. Remember, current and accurate knowledge of customer demographics for physicians and patients and their marketing preferences and interactions with the company are critical reference data required for managing regulatory reporting and compliance. And MDM is a critical enabler for all of these strategic initiatives.


Joe DosSantos is senior director, Field Solutions at Siperian, Inc., an innovative provider of a flexible master data management platform. For more information, contact the author at jdossantos@siperian.com or visit www.siperian.com.

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