Companies can transform their compliance function from a burden to a benefit, concludes a report from Deloitte’s Centre for Health Solutions
Compliance may be an essential function for any organisation yet too often it lags behind other business areas in terms of innovation, says Karen Taylor, director of the Centre for Health Solutions at Deloitte and a principal author of The Challenge of Compliance report.
In the report, Taylor and her co-authors set out to
benchmark how life science companies organise their compliance function in the
hope of shedding light on this under-reviewed area of a business. “After
interviewing nearly 30 compliance experts inside 11 major companies, it was
clear that compliance is a very significant issue today,” says Taylor. “The
compliance challenges facing the industry are numerous [but] the timing could
not be better for compliance functions to transform themselves from tactical
enforcer to strategic advisor.”
The report describes an uneven approach to compliance. “In
most companies, we found that many different individuals were responsible for
the various elements of compliance,” says Taylor. “However, without a single
focus for all compliance activity it is impossible to gain a company-wide
view.”
Creating this single focus, however, may require companies
to elevate the role of chief compliance officer. “In the past, the chief
compliance officer was often a relatively mid-tier role in terms of influence
and responsibilities,” she says. “However, in companies with more mature
compliance functions, we are starting to see the CCO sitting on the board or
maybe one tier down.”
Two more success factors identified by the report are the
creation of both a compliance culture and a central resource for compliance
expertise. “Companies with mature compliance functions emphasise ethical
behaviours,” concludes the report. “Acting with integrity was the norm, as
opposed to simply focusing on rules. ‘Tone in the middle’ needs to gain as much
emphasis, as ‘tone at the top’, if not more, [and] culture change programmes
will be a critical success factor.” However, the report concludes that only 42
percent of companies formally link job performance to ethical or compliance
behaviours currently.
Taylor adds: “Many companies are able to assure themselves
that they are totally compliant with all the major regulations from the FDA or
EMA, but they couldn’t be totally sure they had the expertise on the ground to
be compliant with all local regulations. Our research showed that many of the
‘mature’ companies are building a central compliance function that offers
expertise, support, advice and education to the affiliates to ensure they have
access to the skills they need.”
Finally, compliance functions should engage and work with
regulators to deliver competitive advantage, says Taylor. “In the last few
years, our industry has developed a huge range of innovative approaches,
largely driven by technological changes. Sometimes, the regulators are not sure
how to respond to our fast-changing innovative world – to technologies like
companion diagnostics and mobile health that take us ‘beyond the pill’. Here,
companies should work with the regulators to work out the issues together and
ensure that its products are adopted and reach patients quickly.
“Going forward, a conservative approach to compliance will
not be sufficient for the future sustainability of the life sciences industry,”
says Taylor.