Specialty Pharmaceutical Companies Have Unique Compliance Needs

Specialty pharmaceutical companies are rapidly becoming part of the mainstream. Yet, their products require special processes to develop and manufacture them. As a result, these companies also have unique needs when it comes to managing a comprehensive compliance program.

I co-presented a session on developing a scalable compliance program at the 4thAnnual Life Sciences Compliance Congress for Specialty Products on Sept. 14. Along with Masha Chestukhin, associate director at Sanofi, I also covered assessing the risks that come with recruiting international research sites and studies in the session, “Scale Up Your Compliance Program for Global Operations.”

Your Reputation Is Everything

Anyone wondering why it is important to employ a compliance plan from the start should consider Chestukhin’s point about how important reputation is to a startup, especially as it enters foreign markets. The argument is that companies that can do some good in a country as they enter the market have an edge.

“Expanding into emerging markets offsets loss of revenue in the United States,” says Chestukhin.

Most companies already have some sort of ethical apparatus, such as a code of conduct. The question becomes whether it is official or simply reflective of the culture. In fact, 63 percent of the 23 participants at this session said their company does not conduct annual comprehensive compliance risks assessment across the entire organization.

Chestukhin suggests people need to connect the dots between codes of conduct and comprehensive compliance plans. To start, leaders in the organization have to explain what it means to be compliant and exactly how to execute compliance.

Point Out the Obvious Risks

The first step, as we presented it, is assessing the risks associated with specialty pharmaceuticals. While there are many risks, Chestukhin pointed out a few in particular:

  • High cost – Because these drugs are complex to manufacture, they are expensive. As a result, they are subject to special reimbursement rules, so manufacturers assign budgets to support these programs. And they must have programs to help patients pay for the medication.
  • Strategic partnerships – Often, specialty organizations like these enter into partnerships to develop the drugs. In other cases, there are mergers and acquisitions to accommodate the development of such pharmaceuticals. Whenever you are acquiring a new company, you are vulnerable to its compliance plan and the associated risks.
  • External factors – There are unpredictable risks that depend on outside forces you can’t control. For example, the media poses a risk should it disseminate a negative story on your emerging company or product.

Get to Know Each Jurisdiction

Specialty pharmaceutical companies are vulnerable when working in other countries. Learning the ins and outs of a country’s government, its policy makers and its enforcement of regulations is a necessity.

Also, you must take the temperature of the country or region; in other words, you should understand the culture, too. Even though companies may have cultures that are unique to the location (for example, a downtown New York City site compared to a San Francisco Bay area site), there are implications to the culture of the home headquarters of that company (for example, United States compared to France).

Consider How You’re Organized

A good starting point is defining how your multinational healthcare company will operate. Here are the likely options and the percentage of people in the session who represented companies falling into this category:

  • Headquarters in the United States while operating domestically and internationally (35 percent) 
  • Headquarters outside the United States and operating locally and abroad (40 percent)
  • Headquarters in the United States with U.S.-only operations (25 percent)

What’s interesting to look at is how other companies are handling global compliance. For instance, 79 percent of the session participants said their company had established a compliance program for its ex-U.S. operations that includes oversight and regular training for all involved employees. And 100 percent of participants said their company implements a core set of global policies that overlap all jurisdictions and is supplemented with locally specific policies that account for local variations.

Take Advantage of All the Help You Can Get

Once you’ve assessed how your headquarters plays into your risk profile, you can consider the inventory of risks previously mentioned. Red flag any risk that you need to address and weed out obvious bad actors. Finally, ask yourselves, “Is there any gap in our compliance?”

Among the final points I wanted to make was the fact that managing and avoiding risks is important. You should use all the tools available to you. Indeed, 50 percent of participants in the session said they use home grown tools to employ data analytics and specific tools to identify and prioritize high-risk areas based on local requirements. Another 40 percent did not use data analytics to assess risk. The other 10 percent hired consultants to conduct such assessments based on data analytics.

Weigh Your Options for Compliance Monitoring and Data Analytics

There’s an argument to be made in favor of intuitive, efficient compliance technology that can help you address compliance across global jurisdictions and assess the data. A risk-based approach to compliance involves identifying high risk areas within your organization and building a compliance monitoring program around them. This approach will allow your organization to efficiently focus resources on the troubled areas.

After all, there’s also an opportunity to use the data collected for compliance to enhance business performance. Additional data points are available via published data, public information, and social media, for example. This information can be pulled together and analyzed to make determinations for best practices or strategy. Also, it elevates the compliance function from a siloed function to an integrated function that provides value back to the business with analysis and input supported by relevant data, process, and procedure.

While specialty pharmaceutical companies have similar risks and challenges as any other life science company, they also are unique. Most are essentially startups or run like startups. They require additional risk assessment, risk management, and unique compliance strategies that can grow along with the company.

Darryl Williams

Senior Director, Analytics

Posted on Sep 24, 2018 1:45:15 PM

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