Compliance professionals from more than 200 life science companies gathered virtually to attend the 17th Annual CBI Pharmaceutical Compliance Congress (PCC). Conference presenters, including our experts Saul B. Helman and Ann Beasley, focused on ways to improve compliance programs in 2020 amidst the face of disruptive change and moving forward into 2021.

Conversations with Guidehouse Leaders

Our experts Saul Helman and Ann Beasley spoke with trusted industry professionals about risk assessment and with industry counsel and experienced federal prosecutors, including former Deputy Attorney General Rod Rosenstein, about areas of emerging compliance risk areas during this year’s conference. Below are some key takeaways from their sessions and others:

• The Department of Justice’s (DOJ) guidance and recent policy changes specifically affect corporate compliance programs. The objective is to provide guidance about what type of programs companies should put into place to gain maximum credit when under scrutiny from the DOJ. It is important to consider how these programs evolve over time and respond to emerging compliance risks.
• The DOJ has established recent enforcement priorities and focus areas going forward. There is increased attention on the national opioid epidemic, the Life Sciences industry in the wake of the CARES Act, and the various emerging risk areas related to the COVID-19 pandemic.
• There is ongoing tension around the coordination of global, regional, and local standards of ethics and compliance. This creates a need for leadership and an organizational structure that can carry out compliance programs efficiently. Regional compliance officers might have the most difficult role because they are often bridging the gap between granular local perspectives and broad global standards. Balancing these two ideals is crucial.
• There is a tension between oversight and execution when it comes to the shared responsibility of compliance. Educating business leaders and empowering them to take control of compliance issues within their vertical diffuses this tension. It allows people to feel involved and take appropriate action when needed. There has been a generational shift in compliance accountability.
• We have been seeing an increased level of specialization when building out compliance programs. Specialization in the lower levels of teams is often beneficial. However, once we start progressing towards mid-level compliance professionals, team members need to have cross-functional experience.

Empowering Compliance Effectiveness in a New Age

Amid growing pressure to perform and a shift in the way we conduct business, there are several key takeaways to ensuring compliance has a front row seat:

• Embedding an integrity-centric program into all aspects of management should be our goal. There is a pressure to meet or beat targets derived from shareholders and Wall Street expectations. An ethical culture combats the negative effects of this pressure and can manifest through a compliance program that holds integrity at the center of leadership practices. This includes having a small number of prioritized values, connecting values to bonuses, and defining integrity-centric leadership. The key is being proactive in establishing culture and ensuring middle management are aligned on the same values as executive leadership.
• Our programs must move in tandem with the evolving business model. According to the DOJ, prosecutors should consider how efficiently a company’s compliance program can adapt and respond to change. We must ensure that resources are available to support these programs in continuous evolution. Rod Rosenstein, a Partner at King and Spalding and former Deputy Attorney General, stated that there should be an emphasis on conducting dynamic risk assessments and updating the compliance program as time goes on. Corporate compliance programs should be well designed, effectively implemented, and be able to perform as expected in a real-world setting. Additionally, there should be an increased focus on third party risks.
• Our virtual environment creates additional steps for implementing dynamic compliance programs. It’s crucial to use data efficiently and ensure that information is available to stakeholders via online platforms. We must leverage continuous training to inform users of proper communication channels and how to interact with healthcare professionals (HCPs) in order to mitigate risk. Additionally, adjusting and aligning risk analyses to the medium in which the risk may occur (virtual/digital platforms, etc.) enables compliance programs to head off potential violations.
• A debate over the challenges of legal and compliance standards shows that there are differing opinions on which is the most difficult to implement. On one hand, legal issues can be set in a convoluted environment of laws that vary by location. For example, one could look at the difference of transparency standards when comparing laws in the EU and USA. On the other hand, establishing a uniform compliance culture can often be misaligned because standards are not written down or formally agreed upon. Ethical standards can range from country to country or region to region and so this makes decision-making more complex.

Emerging Trends

There are several emerging trends that highlight compliance risk areas and avenues of future strength:

• Both individuals and entities in the life science industry will face increased scrutiny post-CARES Act. It’s crucial to encourage “self-policing” of corporate compliance programs in order to potentially receive credit from the DOJ in an enforcement situation. Rod Rosenstein explained that we are seeing a new precedent of the DOJ leveraging criminal penalties in addition to traditional civil remediations. Examples of this include: The Racketeer Influenced and Corrupt Organizations Act (a federal law designed to combat organized crime in relation to interstate commerce), The Federal Anti-Kickback Statute and The False Claims Act. Whistleblower cases are now becoming more important and prevalent than ever. The DOJ is continually determining which are legitimate and which are frivolous.
• The DOJ is increasingly focused on transparency in all types of financial relationships with HCPs. In recent investigations the DOJ has been more focused on unjustified payments, specifically in areas such as: speaker programs, research grants, charitable foundations, prior authorization, sales/marketing departments, and patient support programs. Rod Rosenstein stated that there are 12 main factors considered when evaluating compliance program design. Examples of these factors include: risk assessment, management’s conduct and encouragement of policies, voluntary disclosure, cooperation with investigation, and remedial measures in response to crises.
• The use of artificial intelligence (AI) in compliance processes has seen a recent rise. Moving forward, it is apparent that machine learning could be used to make tactical steps more efficient in monitoring. AI can help make algorithmic decisions, free from human error, which may reassess the way we conduct internal audits. If this trend continues, we could see firms transform into data-driven organizations with flexible compliance structures.
• Banner ads, a form of online advertisement, are a more recent phenomenon that has garnered concern among industry leaders. There has been an increased prevalence of banner ads aimed at HCPs all over the country. If this trend continues, passive interactions with HCPs will soon be as common as active engagements such as speaker programs.

Importance of Diversity & Inclusion

The life sciences industry is not exempt from recognizing the benefits of diversity and inclusion:

• Corporate Compliance Officers (CCO) are being increasingly tasked to incorporate diversity and inclusion into their organizational structures. Diversity of thought in a team environment leads to more well-rounded solutions to organizational challenges. An example of this can be seen in the overlapping priorities of local, regional, and global CCOs. The key is connecting risk areas in order to provide a cohesive approach to global compliance.