In 2001, TAP Pharmaceuticals was hit with what was then the largest settlement in the history of the pharmaceutical industry, and the age of commercial compliance was born. That $875 million fine – for violating marketing laws, fraud charges, and filing false claims with Medicaid – ushered in a new era of governmental guidance and changed the landscape of how the pharmaceutical, and now life sciences, industries do business today.
I joined TAP just before the resulting Corporate Integrity Agreement, the first of its kind, was signed with the Office of the Inspector General. Not many people had experience with compliance then, and as VP Chief Compliance Officer and Privacy Officer, I had to figure out how to navigate this tumultuous new world on the fly. My team’s strategy was to create a culture of trust based on a shared desire to enable and empower the sales force to compete and win aggressively in a compliant way. To truly support the sales teams, we needed to deeply understand their challenges and motivations. Instead of approaching compliance as a chore, we built a company culture that defined it as a positive, measurable, and solutions-oriented achievement. That made all the difference in our success.
Over the past year, the pandemic has upended the life sciences industry again, this time in a whole new way that no one could have foreseen. For starters, we’ve been forced to depend almost entirely on electronic communications for meetings. We’ve also become reliant on these platforms for transmitting documents, sharing sensitive information, and selling product. As a result, the privacy and data security issues that have always existed in our industry are now dramatically magnified. We’ve had no choice but to place an enormous amount of trust in these platforms. But it’s critical to ask whether salespeople and medical staff are following compliance rules while using them.
A shift in legislation regarding healthcare and privacy is compounding these risks. The California Privacy Rights Act, for example, which goes into effect in 2023, follows Europe’s requirement for an opt-out provision for consumers. Other states, including Virginia and Nevada, and the federal government have proposed similar legislation. Given the risks driving this new legislation and the priorities of the Biden-Harris administration, there’s a high likelihood that momentous new privacy legislation will be enacted in the near future.
This spring, as the world begins to open up again and a zealous sales force gets back into the field, understanding your compliance risk is more relevant than ever. Most salespeople are good people who want to do their jobs well. But the natural excitement of meeting in person again, combined with the enormous pressure salespeople face to close deals and rekindle relationships, will make it all the more difficult to resist offering perks that test the line of ethics and legality.
Covid-19 is not the flu. And emerging compliance risks for biotech, pharmaceutical, and medical technology companies are not what we’ve seen in the past. My question to life sciences executives is this: Do you truly understand your mix of vulnerabilities and how to quantify and prioritize them? Without a specialized understanding of the specific risks for your company, therapeutic area, and product, chances are high that you’ll miss something – with the potential outcome resulting in business-ending fines. Conducting a compliance risk assessment is a sensible, powerful solution to this dilemma that delivers a competitive advantage.
A thoughtful compliance risk assessment begins by digging deep into understanding the particulars of your business – from therapeutic areas of focus to patient classes, type of disease, and more – to help you discover your greatest strengths and reveal any perceived gaps. Companies making assumptions about any of this information are prone to bias and dangerous blindspots. These can not only substantially increase your risk, but, as importantly, can obscure your valuable assets and advantages. A thorough compliance risk assessment by a credible expert delivers crucial, valuable insight into your operations.
Done properly, a compliance risk assessment will help you gain powerful knowledge about your unique mix of business risks and circumstances. With this knowledge comes power – the power to compete and win aggressively by knowing what risks to avoid and how. At its core, an effective compliance risk assessment delivers the peace of mind and confidence you and your commercial team need to compete aggressively to win in the marketplace.
The process is less painful, faster, and more affordable than you may think, and will help you understand what best practices and success look like for your organization, while minimizing your compliance exposure and maximizing your competitive edge. Smart executives will recognize that an inspired approach from leadership helps build a rock-solid culture of compliance – that is, a culture of doing the right thing. And what’s good for the goose is good for the gander: As you build integrity, loyalty, and security within your company, you’ll also make more sales. This is what compliance is really all about – enhancing your credibility and reputation and building trust, while insulating yourself against potential claims.
So, compliance is not just an insurance policy by another name. Rather, when compliance is about doing what’s right, not just what’s required, when it’s about building trust and credibility with your employees and customers, and when you integrate compliance into your commercial DNA and company culture, you will inspire compliance and transform compliance into a force multiplier that delivers a competitive edge. That’s what I call, “winning with compliance!”
RESOURCES: 2 Drug Makers to Pay $875 Million to Settle Fraud Case.
Commentary by Steve Vincze. Here’s what you’ve missed?
Best Countries For Cultural Heritage Influence.
Best Countries For Raising Kids.
Best Countries to Headquarter Multinational Corporations (MNCs).
Best Countries For Retirement.