Have you ever Googled “Allegations Pharma 2016”? Like no other industry, you’ll find countless articles and examples of corruption cases. According to the EY’s 2016 Global Fraud Survey,“11% of company executives across all industries believe that it is common practice to use bribery to win contracts. This figure increases to 15% in the life sciences sector, which is the highest across all the sectors.”
The structure of the medicine market is extremely fragmented. It’s constituted of clinics, surgeries, pharmacies, hospitals, and individual doctors leading to a very high level of discretion. The patient is almost entirely subject to these decisions and has little ability or opportunity to scrutinize.
Challenges for Life Sciences Companies
In this challenging market, life sciences companies often rely on sales intermediaries such as health care professionals (HCPs) getting compensated for their professional services like speaking at medical conferences, consulting, training, and participating in research studies. But there are other channels as well to collaborate with—just in order to get access to as many stakeholders as possible to increase acceptance, recognition, reputation, and (at least) sales.
An interesting acticle from Forbes tries also to explain the reason behind this exceptional position in the life sciences:
No wonder that pharmaceutical companies are facing pressure in the current regulatory environment. The increasing volume of legislation and regulations, as well as the prosecuting actions taken against pharmaceutical companies, catapults “not being compliant” to a very high-risk level and therefore to a high business issue. Responding to this increasingly complex regulatory environment is extremely challenging, especially as non-compliances can have profound effect on cost, corporate reputations, and ultimately, patients’ lives.
Help from Technology to Improve Compliance
The use of Big Data technology can help life sciences companies improve the efficiency of their anti-corruption compliance programs. As a quick win, those companies might use investigation and detection strategies to significantly reduce their compliance risks.
Based on various discussions with pharmaceutical companies, the more accurate an investigation strategy is formulated the more impact on accuracy, efficiency, and risk insight it will provide. The results will uncover areas of weaknesses and high risks. Therefore, it will help to prioritize actions to improve current compliance program.
Depending on its market activities, a company might analyze several typical chapters in fraud. Consider these examples.
- High sales expenses:
- Analyze sales rep expenses for HCPs (sunshine act or EFPIA HCP/HCO Disclosure Code)
- Analyze sales rep expenses favoring one physician, for example
- Summarize expenses per HCP, trending of expenses over a longer period of time
- Check outliers in payments with industry/speaker events
- Data from clinical trials:
- Access electronic data capture and clinical trial management
- Check variance of lab values
- Check frequency of data changes
- Compare internal test or trial outcome with published results
- False complaints: competitors/individuals trying to ruin a company’s reputation
- Perform sentiment analysis
However, these quick wins shouldn’t prevent companies from identifying and analyzing risks and establishing an effective anti-corruption compliance program that includes adequate policies and controls as well as trainings and effective monitoring.
Join the GRC Conversation during our Exxaro Webcast and at GRC2017
- January 26, 11:00 am EST – 12:00 pm EST
- Saret van Loggerenberg, Manager Risk and Compliance, Exxaro Resources Limited
- Bruce McCuaig, Director, Solution Marketing, Governance Risk and Compliance, SAP