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.