New world, new regulations and new behaviours in the pharmaceutical industry

February 2021  |  SPECIAL REPORT: CORPORATE FRAUD & CORRUPTION

Financier Worldwide Magazine

February 2021 Issue

2020 unexpectedly brought us a world of closed offices, travelling bans, restrictions on transportation and meetings and, at the same time, increased expectations with regard to the constant supply of medicinal products that entailed even stronger scrutiny and a higher level of safety. More than ever before people’s lives have depended on the business continuity, and the research and development activities of the pharmaceutical industry.

At the beginning of the pandemic, most general counsels and compliance officers faced the problem of maintaining the same level of compliance with existing regulations in areas such as data protection, marketing and anticorruption rules. All this was required with a completely new set of circumstances, such as prohibited doctor visits, shortages of masks and basic medical equipment, and a limited number of respirators. At the same time, some areas of legislation, including labour laws, free movement of people, and goods and product delivery, were changing on a daily basis; without doubt, boards of directors and crisis teams became primarily focused on these areas. The changes came on national – not global – levels, and local regulations and local expertise became extremely important again.

Running compliance programmes in these circumstances

Generally, running an anticorruption compliance programme is always based on the same principles, which stem from international standards such as ISO 37001. In essence, such programmes require proper risk identification, preventive measures (which may take the form of formal procedures, technical barriers and educational activities), cyclical processes and proper managerial emphasis. However, different jurisdictions may require a bespoke approach.

For example, in Eastern European states and in the Commonwealth of Independent States, internal procedures may not be sufficient due to the low level of trust in the legislator. In such states, companies face two main challenges. First, they have to show employees how their actions may relate to the overall business (e.g., local bribes may be investigated by US authorities) and convince them that this scenario is not as unrealistic as it may seem. Second, they need to make employees feel responsible for the organisation. Frankly, most companies will struggle to achieve this.

Firstly, hierarchical, formal organisations build siloes where both information and responsibility are kept within a given silo – thus, people do not feel overall responsibility. Hierarchy adds to this feeling, as people at the bottom of an organisation know that their work needs to be approved by a supervisor, who then seeks approval from their supervisor, and so on. Therefore, changing this attitude must start within an organisational structure that empowers people, giving them more responsibility for tasks they are entrusted with. Employees are then more likely to face consequences for their mistakes. Research has regularly demonstrated that where employees feel empowered at work, their job performance, satisfaction and commitment to the organisation are higher.

Secondly, a hierarchy also influences senior managers, who often believe the organisation relies solely on their decisions, since lower level employees are (in their view) not responsible enough to make decisions on their own. Therefore, they may feel they have to shape certain rules for those employees, but without feeling obliged to adhere to those rules. Such behaviour may have a devastating impact on employees, who see the tone from the top and follow the same negative path.

Consequently, these behaviours become embedded and it takes time and effort to change attitudes. For this reason, anticorruption programmes need to be equipped with preventive measures that make it difficult for an employee to succeed if he or she decides to act against the rules. In such circumstances, IT provides technical solutions that can be implemented. This may start with simple tasks, such as requiring approvals according to a set process, to more complex models involving artificial intelligence (AI) algorithms that check financial flow patterns for any red flags. Reporting data may also be gathered automatically from different systems for analysis.

Social media activities

In times of volatility, uncertainty, complexity and ambiguity, one needs to look at initiatives undertaken at local and global levels, particularly where there is a lack of pertinent legislation.

For instance, in the pharmaceutical industry, improper interactions with doctors or pharmacies were penalised under Foreign Corrupt Practices Act (FCPA) rules and local legislation. Coronavirus (COVID-19) limitations on seeing doctors were strictly regulated by legislation, industry standards and internal procedures, which forced the industry to develop its own principles and processes to operate on social media.

In Russia, for example, the Association of International Pharmaceutical Associations decided to adopt basic principles to guide interactions between pharmaceutical companies and social media users, in terms of creating, disseminating and publishing information on pharmaceutical products, health and diseases in any audio, visual or text form in social media. These principles were outlined in ‘Guidance for Information on Pharmaceutical Products, Health and Diseases in Social Media’.

The guidance has defined, inter alia, the means of communication allowing a company to share content with healthcare professionals electronically, including, but not limited to, email messages, and messages about a pharmaceutical product in any audio, visual or text form. The content provided by the company should be relevant, clear, accurate, objective, reliable and should not mislead doctors. Content should be reviewed by the company according to internal corporate procedures before distribution.

The company should have proper monitoring tools in place to exercise effective control over content and communications with doctors. The company should constantly analyse feedback from doctors and improve its content and communications to meet their needs. Companies should have an appropriate social media policy for their employees, to ensure that individual employee interactions with the company’s social media (including forwarding, retweeting, comments and likes) do not bring content to the attention of inappropriate audiences.

Any content or communication distributed on the company’s behalf, whether by an employee of the company or a third party engaged by the company, should comply with applicable legislation, ethical standards, corporate regulations and service providers’ policies.

Any information provided on behalf of the company must be sent from the company’s corporate account or otherwise indicate that the information originates from the company. The employees of the company should not use personal phone numbers or email accounts.

Unsolicited donations and social contributions

Another area of concern in the COVID-19 era is the dilemma of solicited and unsolicited donations and social contributions of items such as protective masks and gloves to healthcare providers, doctors, nurses and pharmacies. At the beginning of the pandemic, each country and company may have been operating on an ad hoc basis, however, after a few months, the industry decided to self-regulate. Medicines for Europe emphasised its code of ethics, that donations must be aimed directly at the education of healthcare professionals and patient care, must be relevant to a healthcare professional’s duties and ultimately benefit patients, patient care or the practice of medicine or pharmacy.

Further, donations should never provide a personal benefit to healthcare professionals or be used to improperly influence them. Companies must not provide items that would offset the routine costs of operating a healthcare practice, so it is forbidden to provide medical supplies that are normal and necessary for the day-to-day practice of medicine, such as tongue depressors, latex gloves, masks, wipes, dressings or similar items. An occasional inexpensive item will not be considered as offsetting the costs of practice, but even an item that is acceptable when provided singly will be inappropriate if given in large quantities or on a frequent basis.

When medical utility items are needed during public health emergencies or disaster relief, deviations from this clause will be permissible only to the extent agreed upon by Medicines for Europe. In general, recipients will be healthcare organisations or governmental agencies, rather than individual healthcare professionals.

Companies may contribute to their communities by making financial and in-kind donations to healthcare and patient organisations to support healthcare goals. Legitimate purposes include support for scientific research, medical education, patient education, patient access to healthcare and the overall development of healthcare systems.

The pharmaceutical industry, on both a local and global level, did very well, not only following existing regulations and adapting to changing rules, but also launching its own initiative to fill gaps not regulated or partially regulated by legislation.

 

Agnieszka Deeg-Tyburska is general counsel at Polpharma Group. She can be contacted by email: agnieszka.deeg-tyburska@polpharma.com.

© Financier Worldwide

BY

Agnieszka Deeg-Tyburska

Polpharma Group

©2001-2024 Financier Worldwide Ltd. All rights reserved. Any statements expressed on this website are understood to be general opinions and should not be relied upon as legal, financial or any other form of professional advice. Opinions expressed do not necessarily represent the views of the authors’ current or previous employers, or clients. The publisher, authors and authors' firms are not responsible for any loss third parties may suffer in connection with information or materials presented on this website, or use of any such information or materials by any third parties.