It's no secret that pharmaceutical companies have great concerns about their overall compliance efforts. In fact, in several conversations that I've had with executives from marketing, sales, clinical, medical and other functions, it's rare to hear that compliance isn't a hot-button issue.
It's not surprising that pharmaceutical leaders have compliance concerns. If the $875 million fine leveled against TAP Pharmaceuticals back in 2001 didn't open eyes, the public's declining opinion of the drug industry - along with regular headlines about lawsuits, safety problems and generics squabbles - provide regular wake-up calls. Add in the fact that regulators have ramped up their focus on companies' marketing, sales and clinical practices - as well as the activities of medical groups - and compliance concerns are high. Even the least concerned executives have to sit up and take note.
Fortunately for the pharmaceutical industry, there are a number of mindful, proactive and intelligent leaders in place to guide companies through the recent compliance storm. Pharma's top players are scrutinizing and improving their own compliance programs' effectiveness in an effort to calm regulators and answer the public's outcry.
A recent study by pharmaceutical intelligence company Cutting Edge Information, "Monitoring and Ensuring Pharmaceutical Compliance," reveals that top pharmaceutical companies take three major steps in their efforts to improve performance and to change the perceptions of their compliance efforts:
Many leaders reported that formalizing centralized, dedicated compliance groups with direct lines to their companies' highest levels empowers those teams in the eyes of the groups they monitor. Having the ear of top executives certainly makes compliance groups respected, even if they aren't quite feared. It also limits any undue influence by functions - unhappy about standards - seeking to flex their muscle and circumvent inconvenient guidelines.
Centralized, empowered compliance teams also demonstrate the whole industry's seriousness in tackling issues that have harmed pharma's reputation. This attention helps keep outside agencies at bay and offers companies the opportunity to repair their public images. And though a new administration in Washington signals change for American healthcare, the industry's ongoing efforts to address its own problems helps stave off increased regulation.
Although educating staff on compliance regulations and auditing their activities is a good start, it's often necessary to go further. To ascertain the extent to which teams follow guidelines on an ongoing basis, many companies have begun to conduct frequent monitoring of their employees' day-to-day activities. Executives recognize that when compliance groups observe the pratices of their companies' departments more closely they are more likely to identify and quickly correct unacceptable activities.
At some of the more innovative companies, compliance officers have now taken to the field to observe teams in action and to provide a practical, hands-on approach to compliance. Within these firms, compliance officers now ride along with sales reps and MSLs to watch their interactions and measure their compliance performance. These ride-alongs provide information on field-based personnel's interpretations of company and external guidelines. This data identifies both successes and areas in which teams may need retraining.
Compliance officers at these companies also attend events such as medical and advisory board meetings orchestrated by medical affairs departments. At these critical gatherings, they monitor and even control interactions to ensure compliance with regulations.
Taking things a step further, some companies have organized compliance monitoring into a sub-function of the larger compliance group. Monitoring units observe the activities of a number of departments and grade them as to how well they comply with industry and company standards. Monitoring teams serve as a preventative measure against the breaching of guidelines; their presence encourages staff throughout the company to act cautiously. Additionally, if inappropriate behavior does occur, it is likely that the monitoring team will "catch it" and take corrective action before bigger problems appear.
In the context of big pharma, where individual department budgets can reach into the hundreds of millions and headcounts can be in the hundreds, compliance resourcing might seem small. However, these teams are quite effective. As resources tighten, the challenge is to make sure they remain that way.
David Richardson, a research team leader, joined the Cutting Edge Information team in 2003. As a project leader, Mr. Richardson has developed pharmaceutical consulting and research work that includes studies focused on sales force management and effectiveness, sales training, clinical trials, alliance management, competitive intelligence, product marketing, pharmaceutical pricing, market research and generics defense. He has also conducted research on financial services topics such as market segmentation and recruiting, hiring and training.
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