The pharmaceutical industry’s reputation has long been a complex one—celebrating some of the highest wins, like eradicating polio, to the lowest lows, like the opioid crisis.
Malfeasance and misconduct like off-label selling or falsified claims of success hit headlines all the time, most recently during the COVID-19 crisis.
It’s no wonder that trust in healthcare companies plummeted to 62 percent in 2022, compared with 73 percent in May 2020, according to Edelman’s latest report. No matter the industry, most successful organizations agree: losing confidence means losing money. The pharmaceutical industry is no different. So how do organizations regain confidence?
The answer is by rooting out corruption to stay out of the news. Pharmaceutical companies are here to provide necessary tools that protect and treat what ails us all. But bad actors and corruption can often overshadow any good that has been done. Off-label selling and bribery can have harmful effects on clients. Finding ways to minimize corruption and stop it from occurring is the best path forward.
A strategic compliance solution can help teams find misconduct and protect companies from reputational risk and regulatory rebuke.
Rooting out corruption
The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) both aggressively patrol the global pharma sector for violations of the Foreign Corrupt Practices Act (FCPA). The FCPA prohibits the bribery of foreign officials, putting companies that do business overseas at risk of exposure to political persons. Healthcare systems outside of the United States often are owned or operated by government agencies, and it is common to meet people considered foreign officials, more so than in other industries.
Therefore compliance can become a big challenge in jurisdictions where bribes and kickbacks are accepted practice for access and use. Payments to government officials, direct or not, will trigger exposure flags, as will helping government officials in other ways, like donating to charities where the cash can be diverted.
It’s not just the FCPA and bribery that pharmaceutical companies have to patrol for, however. In a sector where there are so many levels that go into making a sell—from researchers to sales to field medical practitioners—the opportunities for bad actors to commit misconduct are plenty.
With all this in mind, sales and marketing practices, drug price reporting, patient privacy, clinical operations, and manufacturing quality control are particular areas international regulators are focused on. There is also unbridled demand for openness and better standards from a general public now more familiar with the business of medical treatments than during any period in history.
No margin for error
Nine-figure penalties for off-label or unapproved promotion of medical products are now commonplace, and in recent years more than $12 billion has been paid for mis-selling, bribery, and corruption:
- In February, Teva Pharmaceutical Industries agreed to pay $150 million and provide $75 million of overdose treatment medication in settlement of allegations it improperly marketed the opioids it manufactured for mild pain. As part of the agreement, it must further digitize operations to help battle fraud and improve monitoring of its sales and marketing operations.
- Last year, Indivior paid a further $300 million to resolve allegations that it falsely and aggressively marketed a drug for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment. Aside from the penalty, the firm had to undergo advanced monitoring and bolster its compliance operations.
- In one of the largest-ever settlements, industry giant Johnson & Johnson and two subsidiaries were ordered to pay more than $2.2 billion to resolve criminal and civil liability for promoting off-label uses of three drugs and paying kickbacks to doctors. Again, the lack of adherence to regulatory compliance was called out and criticized by prosecutors, who said non-monetary measures to facilitate change in corporate behavior were just as important.
These overt, aggressive prosecutions increasingly come with criminal convictions, putting extra onus on corporations to eliminate misconduct and demonstrate a culture of compliance from the top down. The most recent Annual Report of the Departments of Health and Human Services and Justice said the Department of Justice will have more resources and “more effective and efficient oversight” of pharma fraud through 2022. This will cause a “steady increase” in pharma audits, inspections, and investigations, the DOJ said.
The industry has been put on notice it needs to clean up its act, and while certain dangers are unavoidable, companies are starting to minimize threats with better risk management and new technologies that help anticipate and respond to problems like communication monitoring.
Empowering compliance teams
Until recently, only the very largest international firms had a single department responsible for compliance, and even within those businesses there is often further a silo between field medical and “internal” or “in-house” medical. Communication monitoring provides the best way to defend against these types of misconduct, but there has been little remote oversight and a heavy reliance on manual checks on ecomms and acomms. This is beginning to change though, and some forward-thinking pharma businesses are empowering compliance with data analytics tools that can fill in the blanks with communications monitoring.
The trend today is toward a holistic compliance function that exists as a sole unit, with AI surveillance tools that can parse huge volumes of communications and other data to identify bad actors and breaches. Pharma businesses that centralize all of these communications, sales, expense, and other cross-platform metadata in a single platform are able to better identify and prevent misconduct.
The system analyzes a wide combination of various structured and unstructured data points, such as expense and sales activity, along with employee communications over email, chat, and phone. It allows compliance to proactively understand behaviors and activity in real time and perform analytics to identify where risk exists, potentially stopping misconduct like off-label selling before they occur. This can help alleviate risks around pressurized field staff, sales or medical technicians who discuss products with potential clients, or those whose work often involves unsupervised and risky activities.
The public’s trust is slowly earned and quickly lost, but through smarter technology and AI-powered surveillance, pharma companies can stop misconduct and stay out of the news—ultimately helping their business grow.
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