The Top Five Business Benefits of Compliance

Anyone reading this magazine understands the importance of compliance in preventing unethical conduct and violations of the law. U.S. pharmaceutical companies all follow the compliance program guidance from the Office of Inspector General of the U.S. Department of Health and Human Services on what constitutes an effective compliance program. We know the value of having a well-considered program in place to reduce the risk of prosecution or mitigate sentencing should a failure in compliance occur.

Over my careers, I’ve also seen how a good compliance program can have significant, positive, secondary benefits on business operations.   The advantages are many and vary with the nature of the business, but here are the Top Five Business Benefits of Compliance that we’ve realized for ourselves or for our clients in the course of implementing a smart, rigorous compliance program in a heavily regulated industry.

  1. Quality improvements. A good compliance program should help prevent errors or failures before they occur or detect then at an early stage, which reduces the need to repeat or re-do tasks. For example, an effective process for Marketing Legal Review (MLR) can spot problems in advertising copy at a stage before the creative work is completed.   Early guidance to assure compliance saves time by reducing the need to rework advertising that does not meet appropriate regulatory standards. It assures that the advertising creative achieves its marketing or branding goals within FDA and FTC regulations. Saving time and the need for re-work obviously contributes to a company’s bottom line.
  1. Greater Efficiency. Although everyone, no matter the industry, is seeking efficiencies to improve returns to stakeholders few people think about compliance in the context of such operational efficiency.   But we have found the more compliance is embedded in the DNA of business operations, rather than siloed in a separate department or function, the more efficient tasks become.

Operating personnel take greater ownership of compliance, which helps spread the gospel of compliance throughout the entire organization. This reduces the need for a larger “compliance police force.” Rather than spot checking employee work to assure compliance, everyone in the organization is considering compliance all the time in the work they do so it becomes a more efficient, real-time process rather than an after-the-fact review and process of clean-up. At my company, we have a compliance professional assigned to our communications division. But rather than using her to police the work of the division, she works collaboratively with communications division leadership and employees to train operating staff in compliance and act as a subject matter expert. It’s a force multiplier as she effectively “deputizes” the entire communications division to think and act with compliance in mind, and my compliance person is not faced with the impossible task of overseeing the work of more than 2,000 people working in offices around the world under different regulatory systems.

  1. Trust and Brand Loyalty. Having in place a clear, effective and broadly communicated compliance program helps you signal to key stakeholders that compliance is a top priority for your company. It shows your commitment to doing business the right way, to the highest ethical standards. It demonstrates your expertise related to all relevant laws and regulations. Customers, employees and vendors seeing this commitment have a higher overall feeling of trust in you and such trust, studies have shown, breeds brand loyalty.
  1. Risk Management. All companies face significant strategic, operational, financial and other risks and those risks are multiplied in highly regulated industries such as healthcare and finance. For a biopharmaceutical business, there are continuing compliance risks throughout the entire product life cycle, from the earliest stage of drug development through launch and marketing to the last day a pill or device is sold. For example, the communications, marketing and sales function all must manage off-label risks while drug development teams face risks related regulation of clinical trials. Such risks multiply for businesses operating internationally, requiring compliance with anti-corruption laws and the need to comply with a variety of national regulatory policies.

The most effective and efficient compliance programs are those that are fully integrated into a broader risk management program. This enables a company to look holistically across the portfolio of strategic, operational and other risks to ensure that all risks (and benefits) are considered together to optimize decision making and help ensure risks are properly mitigated.

For example, a pharmaceutical company planning clinical trials should ensure that operational and compliance teams, as well as others responsible for risk management, are well integrated to consider together all the operational, compliance and other risks related to conducting trials in various geographies. Doing so assures that considerations related to the availability of patient population, speed to complete trials and the regulatory environment can be considered as a whole rather than in separate silos.

  1. Competitive Differentiation. As a life science knowledge and service provider to the biopharmaceutical sector, we have found that good compliance is a differentiator that helps clients drive better outcomes more efficiently while reducing risk.   Our compliance teams do not just work within our own business but provide counsel to clients based on expertise developed from supporting hundreds of biopharmaceutical clients developing and commercializing products in 70 countries.

We regularly advise clients when they are unsure of a course of action, and proactively flag areas where, in our view, they are taking undue risk. Without any doubt, helping a client mitigate risk in advance elevates a relationship from vendor to valued strategic partner – an enormous business benefit.

Given the business value of good compliance, greater importance needs to be placed on building excellent compliance structures and programs, which will vary depending on the size, structure and scope of a company. For companies like mine with diverse, global operations, a balanced approach works well driving enterprise-wide compliance from corporate teams and local compliance at the business unit level to address risks that are specific to that business unit. But no matter what the size and scope of the business, finding talent is a challenge. The best compliance professionals not only have to be subject matter experts, but must be outstanding communicators and collaborators in order to ensure they can effectively influence and motivate colleagues. We have built our compliance team by identifying those professionals, whether internal or external, who demonstrate both substantive expertise and an ability to communicate and partner effectively – all within the style and culture of our company.

As drug development becomes more global and regulation of the pharmaceutical industry becomes more complex worldwide, we can expect compliance to become even more important over the next few years.   It is critical that life science companies, including biotech and pharmaceutical firms, insure they have effective compliance in every country where they work – and that such compliance extend through all partners and vendors. The best partners in this complex environment will be those who have the experience and skills to not only meet the sponsors’ standards but exceed them. It’s just good business.