Insights from the Global Compliance Congress for Life Sciences

By Kim Zoetbrood, Caroline Franco, Ruben Koolmees, Benoit Racault and Veronique Monjardet

The Third Annual Global Compliance Congress for Life Sciences took place November 16-17 in London. Polaris representatives attended the conference that addressed many important issues facing pharmaceutical, biotech and medical device companies.

Fair Market Value (FMV)

During the past few years, much of the attention, especially at pharma compliance conferences, has been focused on transparency and transparency related challenges. Now that the first EFPIA cycle is past, and data has been publicly reported, it is no surprise that the attention has shifted to Fair Market Value.

After an initial push to get information published, for many the concern shifts to assessing current practices and understanding the potential underlying risks. During a special summit devoted to FMV, the audience saw how an outside consultant (Polaris) leverages an approach developed through working with clients over the last 15 years to establish Fair Market Value methodologies and rates for their clients. Geert van Gansewinkel (Polaris Partner and Managing Director of Europe and Asia-Pacific) explained how the key issue is not to have rates, but to have a robust methodology that is consistent and can be used to explain payments to external parties as well as address all underlying challenges (such as how to deal with potential structural overpayment, how to address lack of consistent base information, how to handle internal and external stakeholder buy in to the methodology). The summit also showed examples of companies that have worked on in-house methodologies, with ultimately the same objective.

Third-Party Due Diligence

Another key topic of the conference was Third Party Due Diligence. At issue is the fact that Life Science companies work with an increasing number of third parties, including HCPs, HCOs, sales and distribution third parties and many other types of external vendors. The behavior of these third parties can have an impact on a company’s reputation and present legal challenges, particularly in emerging markets.

“Forty out of the region’s (Africa) 46 countries show a serious corruption problem and there does not seem to be improvement for continent powerhouses Nigeria and South Africa.” said Chantal Uwimana, Director for Sub-Saharan Africa[1] of Transparency International.

Third Party Due Diligence was highlighted as one of the key risks, with underlying compliance risks including movement of products and cash payments, fraud and bribery.

Key best practices to address these risks were discussed. They include more frequent monitoring of distributor activities, reorientation of the salesforce and tailoring limits on hospitality, and wire transfers instead of direct payments.

To combat these issues, companies need a structured methodology, consisting of two phases, to assess and act upon risks associated with third party interactions. The first phase would be a preliminary screening (i.e. initial filter and risk assessment), providing critical input for the second phase, which is extended screening (i.e. due diligence and risk management plan).

For each area, there two risk levels: low or high risk. In the instance where a third party is determined to be a high risk, three options are then considered. These options include agreeing on a mitigation plan, an extended due diligence including an onsite audit, or the decision to exit the agreement.

The due diligence phase assesses the third party on a scale from ‘no control’ to ‘increased control’ based on the previous key risks mentioned. ‘No control’ indicates third parties have no formal policies, processes or controls but could have informal procedures. ‘Slightly increased control’ means policies, processes and systems have been developed, however no evidence of training or monitoring is available. The highest levels of control include evidence for training and monitoring on enforcement of the policies.

Anti-bribery experts concluded that proactive risk management with proper communication is key. Firms should proactively know the specific third party risks per country, then rigorously apply a variety of assurance methods and manage bribery risks.

EFPIA Reflections after the First Public Disclosure

During the conference, a presentation was given by EFPIA reflecting on the first public disclosure cycle that happened for pharma companies in Europe at the end of June this year. EFPIA outlined the lessons learned after the first disclosure, and discussed challenges companies faced.

Among the issues was the fact that member associations had to transpose the EFPIA code before December 31st 2013, except when it was in conflict with national laws or regulations already enforced.

The EFPIA transposition accepted the deviations for France, Denmark, the Netherlands, Portugal, and two levels of reporting for Romania and Slovakia. Some other countries still need to close the gaps. Turkey is currently suspended sine die due to recent legislation.

EFPIA highlighted the ways to access the reports per association platform, association “gateways” (or government platform and multi-stakeholder platform. Today, EFPIA considers central platforms, from associations or governments, as the most efficient and transparent ways for the public to access the data.

Data protection remains a challenge, as companies will have to conform to the applicable legal provisions.

Finally, EFPIA’s goal is to avoid double reporting. In this way, EFPIA and Medicines for Europe decided a mutual recognition of disclosure provisions as member companies of Medicines for Europe will have to publicly disclose their transfer of values in 2018, in order to avoid a duplicate disclosure to companies in common membership. The caveat is that disclosures cannot be delayed. Members must comply with EFPIA’s disclosure requirements and the convergence cannot result in lower standards.

Communication on Social Media

One of the Congress’ breakout sessions explored the use of social media. Engaging in social media while adhering to compliance regulations generated a lively discussion. The panel decided upon a common status quo: while stakeholders, such as patients and advocates, are active on social media about Life Sciences products, the industry has been historically quiet on these platforms, engaging mostly in simple monitoring activities.

Although potential opportunities for social media were acknowledged, the risks associated with these types of interactions were deemed substantial. The group concluded that defined policies and processes are needed.

In summary, the Global Compliance Congress fueled several discussions on different aspects of what defines an effective compliance program. Speakers generally advocated an open-minded approach while designing compliance programs. Implementing a service-based approach is key.

[1] CORRUPTION PERCEPTIONS INDEX 2015. (2016, November 16). Retrieved from