Insights from the 7th Asia Pacific Pharmaceutical and Medical Device Compliance Congress

09.27.17 | By Dana Liu

The Seventh Asia Pacific Pharmaceutical and Medical Device Compliance Congress took place in Shanghai on September 13 – 15, 2017, focusing on current regulatory initiatives and compliance trends taking shape in the region.

The Congress included keynote speakers from pharma company c-suites, RDPAC (R&D Based Pharmaceutical Association Committee, the industry association for multi-national pharmaceutical companies in China) and AdvaMed, as well as roundtables highlighting regional anti-corruption, compliance best practices, and compliance regulatory developments. Polaris attended the conference as a sponsor.  Compliance Center of Excellence General Manager, Andy Bender, Asia-Pacific Managing Director, Joyce Wong, and Consultant, Dana Liu, attended as representatives of Polaris.

Trends in APAC and Global Anti-Corruption Landscape

A key topic of concern at the Congress was the increased pressure the region has been receiving from foreign law enforcement authorities. Companies or individuals in Asia-Pacific make up 20% of all US enforcement actions concerning alleged bribery of foreign officials, from 1977 through 2015. That’s 39 of 199 total enforcement actions. In 2016, US authorities filed a record-breaking number of Foreign Corrupt Practices Act (FCPA) enforcement actions, both in the volume of cases and the amount of penalties, and Asia-Pacific contributed the largest percentage– 47 % of all DOJ cases and 65% of civil resolutions by the SEC. As of August 2017, ongoing FCPA investigations include 14 related to the Healthcare and Pharmaceutical industry and 18 cases involving China.

Recent changes and developments in local regulations and enforcements have reflected an increased determination to fight corruption in the region. Moreover, the presence of foreign regulators is increasing in Asia Pacific. We are seeing increased international and cross-agency cooperation on anti-bribery and anti-corruption (ABAC) efforts. Cross-border information, knowledge and resource sharing are on the rise as are joint prosecutions. There is also a trend toward expanded charges, combining anti-corruption with mail and wire fraud, money laundering, and other criminal charges, as well as aggressive expansion of FCPA jurisdiction to foreign affiliates. These changes in the global ABAC landscape have brought greater compliance awareness to organizations and individuals in the Asia Pacific region. Subsequently there is increased interest in the creation and implementation of more robust compliance programs, especially around third party due diligence, M&A/Joint Venture due diligence, and investigations.

Polaris’ Andy Bender led a panel discussion on Third Party Management, including pre-evaluation, due diligence, contracting, monitoring and payment to distributors, vendors, alliance partners, government-related associations, HCOs, etc. Takeda’s Redentor Romero, Sidley Austin LLP’s Yuet Ming Tham, and GSK’s Carol Wu joined the panel to discuss the trends and attention the region has been receiving and explore best practices that companies can take to ensure they are compliant.

Updates to Industry Codes & Local Regulations

As noted above, new laws, regulations, and industry codes surrounding the Life Sciences industry have been emerging rapidly in the Asia Pacific region. These developments challenge companies to respond, adapt and evolve faster with updated internal processes and procedures. The regulatory topics featured below were also key areas for discussion at the conference.

Phasing out Direct Sponsorship

Stephanie Chew presented the updated version ofAdvaMed’s Code of Ethics on Interactions with Health Care Professionals in China. This version of the code highlights the phasing out of direct sponsorships. While there are various anti-bribery and competition laws in China, none of them directly addresses direct sponsorships to healthcare professionals. Recent enforcement actions have highlighted cases that falsely recorded bribes or expenses as “sponsorship fees”. Some biotech companies have voluntarily phased out direct sponsorships for this reason. Direct sponsorships are not permitted in the U.S. and are being phased out by MedTech Europe, APACMed, and AdvaMed starting in January 2018. No registration fees, direct travel, lodging or meal expenses for individual HCPs to attend third‐party educational conferences will be allowed. Rather, companies can provide educational grants/donations to conference organizers (or other legitimate grant/donation recipients) to support third‐party educational conferences. These changes are intended to help avoid even the appearance of impropriety and ensure transparency of relationships between companies and HCPs.

Medical Representative (MR) Regulations in China

Sidley Austin’s Lei Li presented updates in China MR Regulations during the Asia Pac Anti-Corruption Update Roundtable. “Opinion 13” was published by the Chinese State Council on Jan 24, 2017, and introduced a mandatory registration framework for MRs, indicating that MRs should not have any drug sale responsibilities. Shanghai, as a pilot city, then published “Opinion 35” prohibiting drug kickbacks, followed by the Shanghai MR Registration Rule (draft) in August 2017, stating that MRs must be registered and act on behalf of drug manufacturers. It further stated that drug manufactures must establish MR qualification requirements, and that MRs would be de-registered in case of bribery or other misconduct. Additionally, it warned that all MRs of drug manufacturers or MR “home companies” would be de-registered if the companies continued to have “bad records”. The draft regulation is a big step forward for China’s medical representative system reform. However, there are still a lot of challenges and uncertainties, and companies are watching closely for any new movement around this topic.

Transparency Reporting in Asia Pacific

Another hot topic at the conference was transparency reporting, mentioned repeatedly by several speakers. Various Asian governments and industry associations have created new requirements or updated existing regulations to create a more transparent environment and provide consistent guidelines for HCPs and companies on how to interact without having undue influence. There are currently five countries within the APAC region requiring transparency reporting either by law or by industry code – Australia (industry code, 2015), Indonesia (law, 2016), Japan (industry code, 2011), The Philippines (Law, 2017) and South Korea (Law, 2017). Kim and Chang’s Hwa Soo Chung presented updates on Korea transparency requirements during the Asia Pac Anti-Corruption Update Roundtable. This topic was discussed in greater detail during the Transparency Reporting to Prevent Corruption Risk panel discussion led by Polaris’ Joyce Wong. Kim & Chang Law Firm’s Myung Soon Chung and Yunjoh Lee, Takeda’s Yota Kikuchi, Sanofi’s Clarissa Shen, and UCB’s Mike Zhao joined the panel to discuss transfers of value in the industry, potential risk areas, the latest transparency reporting requirements in Asia Pacific, efficient data gathering approaches, and best practice from the US and EU.

Diversity in Asia Pacific

Multiple speakers addressed the challenges companies face due to the cultural, economic and political diversity, not to mention the sheer size of the region, underscoring the fact that applying the same policies and processes to all countries in Asia Pacific or simply copying what worked in the US and Europe may not work here. Therefore, in order to address the rapidly changing regulations and compliance environment, building and maintaining a robust compliance program and culture is key. Implementing a localized compliance program, and ensuring that they are applicable and understood by the local team is paramount.

In summary, governments and industry associations in Asia Pacific are placing more and more emphasize on compliance and anti-bribery and anti-corruption. Laws and regulations are developing and evolving rapidly across the region. Life Sciences companies need to develop robust compliance programs and foster strong ethics and compliance cultures to keep pace with the industry and regulatory trends, while taking into account the diversity in the region and adjusting to ensure a local buy-in and seamless execution.  Since 2001, Polaris has worked with Life Sciences companies to create, implement and manage end-to-end compliance programs. Our consulting experts assess and guide compliance teams helping to leverage our innovative technology to streamline processes, reducing costs and risks, while improving efficiencies across the organization. Learn more at