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Ten Required Steps To Ensure Effective Compliance Programs by Pharmaceutical and Medical Device Companies (Part III of III)

tenstepsIn response to the Glaxo controversy and the continuing risks of aggressive FCPA enforcement, drug and device companies need to review and enhance their anti-corruption compliance programs.  No hemming and hawing – this is a must for every company involved in these industries.  To ignore the current situation, is to do more than just put a head in the sand – you might as well bury the entire company body and call it a day.

To help companies which want to reassess and reconfigure their compliance programs, here are ten steps which every company should take:

Step 1 – Conduct a new, focused Risk Assessment which measures a number of issues, including but not limited to: (a) country-by-country calculations of number and percentage of sales made to “foreign officials;” (b) number and percentage of sales made by sales staff, distributors and agents, respectively; (c) existing and projected foreign clinical trials conducted with the assistance of CROs, IRBs and foreign principal investigators; (d) number and budget for foreign medical conference/education sponsorships; and (e) nature and extent of regulatory interactions.

Step 2 – Design and implement specific procedures for interactions with foreign healthcare professionals modeled after industry codes but adjusted for specific risk profile by country or region.

Steps 3 – Adopt a robust third-party agent and distributor due diligence process to retain and renew contracts based on risk-ranking weighted factors to determine the level of risk along with specific factors to be investigated and resolved through written representations, warranties and certifications.

Step 4 – Implement a detailed monitoring program for third-party agents and distributors using a weighting formula and a variety of auditing techniques (full compliance and financial audit; desk audits; transaction testing; and issue spot checks).pharma

Step 5 – If your company is involved in foreign clinical trials, design a specific and separate clinical trial protocol assuming CRO, IRB and PIs are foreign officials, and subjecting them to due diligence and monitoring policies and protocols.

Step 6 – Create a centralized and global review structure for the approval of sponsorship applications for foreign physicians and healthcare professionals.  Such a review should include detailed consideration of costs, purpose of attendance, and specific documentation which is sent to the attendee, the attendee’s medical institution, and includes appropriate certifications needed to negate any corrupt intent.

Step 7 – Calculation and implementation of a risk-based auditing plan which includes audits of country offices, agents and distributors based on risk ranking formula.

Step 8 – Design of a training program tailored to specific risks and audiences and which combines in-person and online programs for company employees.  The training program should extend, where warranted, to agents and distributors.

clnical6Step 9 – Adopt a strict gifts, meals, travel and entertainment policies which require specific approval and which collect data by employee on requests and interactions with foreign medical officials and professionals.

Step 10 – Design a new compliance certification system which requires managers and employees in high-risk countries to certify compliance at least twice a year.  Collect data on the number and nature of interactions between company officials and employees and foreign healthcare officials.  Distribute compliance reminders through a variety of channels to officials and employees in high-risk offices.

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1 Response

  1. July 27, 2013

    […] FCPAProfessor considers whether Glaxo was the victim of a rogue employee’s actions. Mike Volkov completes his series on Glaxo and makes an analogy to Einstein’s theory of […]