The recently Implemented U. K. Bribery Act and reinvigoration of the US. Foreign Corrupt Practices Act have placed pharmaceutical companies and all businesses on notice. Here’s practical help for conducting risk assessments, developing global policies, employee training, monitoring, due diligence on third parties and more. Not so long ago, pharmaceutical Industry sales representatives commonly plied ealth care providers with golf outings and extravagant gifts. In 2006, I conducted an Investigation at a multinational pharmaceutical company In Japan.
The companys compliance team and I conducted interviews with at least 20 sales reps who allegedly had bribed doctors to prescribe the companVs products. We discovered that the company had Implemented and trained its employees on anti-bribery policies, but it never effectively adopted those policies and so dldnt weave them into the culture. As the review unfolded, it was evident that leadership didn’t fully embrace anti-bribery policies.
The sales reps’ comments confirmed our suspicions that management didnt have an anti-bribery mindset: “Leadership told me to do it; therefore I did. Ann-bribery and anti-corruption (ABAC) compliance is becoming a necessity for the world’s pharmaceutical Industry because of a number of factors, Including but not limited to: Pharmaceutical companies are increasingly finding themselves doing business in some of the world’s poorest countries, which lack necessary infrastructure and controls to combat corruption. The U. S. , under the Foreign Corrupt Practices Act (FCPA), and the U. K_, under the recently Implemented Bribery Act, are prosecuting more organizations for international bribery.
The U. S. , which Is aggressively asserting Jurisdiction over companies whose principal place of business is outside of the country, is finding more cross-border cooperation. The Organisation for Economic Co-operation and Development (OECD) member companies are increasingly enforcing anti-corruption statutes. Non-governmental organizations, such as Transparency International, have increased global awareness of the societal costs of corruption, especially as It affects the world’s poorest societies.
Health care professionals (HCPs) or health fund administrators in many countries them as “public officials” under many bribery laws. Pharmaceutical companies have significantly limited benefits provided to HCPs over the years; however, in some countries, it’s often a standard business practice. Multinational pharmaceutical companies entering into new markets often use third parties such as distributors or contract sales forces because they don’t have sufficient resources with language and business fluency, business networks or supply chains to sell directly.
The uptick n co-marketing/co-promotion and Joint-venture arrangements are increasing the need for holistic approaches among different companies. All global pharmaceutical companies, as well as many businesses in all other industries, must be cognizant that theyre subject to global laws, such as the FCPA and the Bribery Act. Prosecutors also are extending investigations of one company to its competitors in the industry or geographic area to discover possible widespread bad behavior. Therefore, an out-of-sight, out-of-mind approach to ABAC compliance can lead to very serious consequences.
Under these regulations, for example, a government can prosecute a party that had no “knowledge” of corrupt payments if the company was aware of potential warning signs or red flags and consciously failed to conduct adequate due diligence to prevent or fix any possible problems. Many specific activities, which occur daily within the pharmaceutical industry, pose substantial compliance risks. Here are some examples of critical areas: service payments to HCPs. Educational grants and sponsorships. Research grants. Clinical research and publication of clinical trials. ommunity support activities.
Travel and entertainment expenses. Consultant meetings and use of consultants. Employment of agents. Charitable donations and Support for third-party medical meetings and conferences. ponsored educational and promotional meetings. Gifts or other items of value provided to HCPs. Company- Pharmaceutical companies are now struggling to understand how these ABAC laws affect them and what they can do to address compliance risk. While some companies are still reacting to the growing volume of warnings, many companies have already esigned and implemented successful programs that effectively mitigate ABAC risk.