Managing Integrity in Deed by Clarity of Word

This article was first published at Pharmaceutical Compliance Monitor on July 17, 2013.

The world is full of obvious things which nobody by any chance ever observes.”

–Sir Arthur Conan Doyle

As the field of modern American healthcare continues to flex its newly grown muscles under the Affordable Care Act, the need for commitment to corporate integrity becomes ever more apparent. In a perfect world, the question of whether such leadership should come through an edict from the Federal Government or be provided as a matter of course within each individual company should not be a subject of debate, and yet recent failures on the part of of certain corporate giants within the health care community have forced the issue to the forefront, making those tasked with compliance ask the question “where does compliance begin?” The unnerving truth is that in today’s age of regulatory enforcement, the existence of an integrity agreement is little more than a necessary prerequisite, and its effectiveness suffers greatly as a result.

Most compliance officers agree that pharmaceutical companies should have a robust compliance program, yet at the same time, these same individuals may hold vastly different viewpoints about the infrastructure necessary to allow such programs to function in a corporate environment. With an eye on company revenues and private sector profits, pharmaceutical companies should never see a thoughtful and effective compliance program as simple counterbalance, though this is often the case.  To do so may lead a company into the path of wary and watchful government regulators equipped with newfound investigative strengths. While not always a foregone conclusion, a pharmaceutical or biotechnological company would be wise to fear the impact of a mandated corporate integrity agreement (“CIA”), especially when it comes at the heels of a state or federal investigation.

As federal and state regulations expand the mandate of compliance programs throughout health care, a chasm of possibilities still exists between corporate integrity built upon a voluntary program and one delivered in the form of a CIA. The reasons behind a company’s decision to focus on compliance are of little importance, provided the result is seen in the integrity of deed.

Nobody Sells a Moral Compass

In many ways, the act of maintaining compliance within the modern healthcare system can be equated with acting right or wrong, and it should be as fundamental as knowing one’s left from right.  To be sure, the field of health care embodies more complexity and ambiguity than most other industries, but uncertainty should never be the foundation upon which a compliance program is built.  Rather, it is only by having transparency and clarity at its core that a compliance program will be able to shoulder the weight of an expanding pharmaceutical or biotechnological company. Technically speaking, the Office of the Inspector General (“OIG”) has provided all the necessary guidance over the years for any health care entity ranging form the 1998 instructions to hospitals, home health agencies, clinical laboratories and third party medical billing companies (63 Federal Register 8987 (Feb. 23, 1998); 63 Federal Register 42410 (Aug. 7, 1998); 63 Federal Register 45076 (Aug. 24, 1998; and 63 Federal Register 70138 (Dec. 18, 1998)), to the information provided a year later on behalf of durable medical equipment, prosthetics, orthotics and the supply industry, as well as hospices in 1999 (64 Federal Register 36368 (July 6, 1999); and 64 Federal Register 54031 (Oct. 5, 1999)), and of course the information relating to pharmaceutical manufacturers in 2003 (68 Federal Register 23731 (May 5, 2003)).

Nevertheless, the past fourteen years offer plenty of examples to illustrate the simple lack of understanding when it comes to the federal offerings referenced above, not to mention those incidents involving blatant disregard with or without actual regulatory knowledge.  When addressing the latter, a compliance program worthy of the Pulitzer Prize for Explanatory Reporting may fail, while a CIA that resembles dactylic hexameter may afford meaningful results in a corporate culture that emanates integrity. As in days of old, the truth rests not in regulations, but in the core values upon which the company was founded. When corporate leadership sets the appropriate example for compliance and provides multiple avenues by which this message filters throughout an organization, it succeeds in ways that no profit margin can.  Likewise, the strongest of CIAs may still fall short as an instrument of change in a company based upon too much moral flexibility.

Ex Abundanti Cautela, Use Plain English

Out of an abundance of caution (ex abundanti cautela), a compliance program should always be clear, generally concise, and easily understood, as it goes without saying that employees may have a hard time embracing a CIA if they cannot understand it.  For example, the very first CIA on the OIG’s website (in alphabetical order) covers Abbott Laboratories.  By no means is this 88-page CIA for the compliance novice, as even the seemingly straightforward concept of who falls within its scope is mired in a morass of regulatory jargon.  Although the following answer appears on page 3, it is doubtful that it provides the type of clarity suited to the needs of an organization intent upon compliance:

1.  ‘Covered Persons’ includes:  a.  all owners of Abbott who are natural persons (other than shareholders who: (1) have an ownership interest of less than 5% and (2) acquired the ownership interest through public trading) and all directors of Abbott; b. all officers and employees of PPG [US. Pharmaceutical Products Group] who are engaged in or who have responsibilities relating to any of the Covered Functions (as defined below in Section II.C.7); and c. all contractors, subcontracts, agents, and other persons who perform any of the Covered Functions on behalf of PPG, including, but not limited to third party vendors who provide services relating to the Covered Functions (e.g., for speaking programs or medical education programs.)

Though only 80-pages long, the CIA for Novartis Pharmaceuticals Corporation has a similar definition of “covered persons,” but it also includes those who “perform Promotional Functions or Product Related Functions.”  The term “product related functions” includes:

(a) the preparation of external dissemination of non-promotional materials about Government Reimbursed Products, including those functions relating to any applicable review committees and to Novartis’ Medical Affairs Department (Medical Affairs”); (b) contracting with healthcare professionals (“HCPs”) in the United States to conduct post-marketing clinical trials and post-marketing studies relating to Government Reimbursed Products; (c) authorship, publication, and disclosure of articles or study results relating to Government reimbursed Products; and (d) activities related to the submission of information about Government Reimbursed Products in government-listed compendia (such as Drugdex or other compendia of information about Government Reimbursed Products).

In today’s health care climate, any pharmaceutical or biotechnological company must be aware that CIAs are an area of tremendous importance, both industry-wide and to the Federal Government.  As federal fraud and abuse recoveries reach record-breaking numbers each year, longer and more intricate CIAs are inevitable. Though no single CIA will force an entity into compliance,, one unified message by a company’s leadership referencing integrity and a strong emphasis on compliance carries more weight than any CIA.  Said differently, CIAs often do not work, and the monetary amount derived therefrom may be seen as the simple cost of doing business.  The path by which a company arrives at compliance, be it through force or free will, is not an indication of success, but rather how deep within the organization the seeds of integrity have been planted.  That is the true measure of success.

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