the future of compliance - ehcca.com · –as mncs partner more and more together in the new...

Plenary Session –

Compliance 2.0

The future of Compliance

Dr. Julien Durand & Dr. Arun Sharma

October, 2012 University of Miami

Let’s embark on a prospective journey together...

• Macro‐trends in healthcare industry

• Pharma 2.0 – How the Industry reacts

• Compliance 2.0 – How Compliance adapts

• Compliance 2.0 – The future of the Function

© Julien Durand, & Arun Sharma, all rights reserved

perspective on prospective ...


Pharma 2.0 – A new Pharma EcosystemPharma 1.0

Internally focusedPharma 2.0

Externally focused

Outsourcing non‐

core competencies

Collaborate with

new partners

Most competencies

are available inside

CROsCHROsCITOsCMOsCSOsCFOs(...)

ProvidersPayers

RegulatorsDistributorsPh. chainsAcademiaBiotechMedtechRetailers

Social MediaTelecomsTechnology

Co‐promotion(...)


Compliance 2.0 –

Ecosystem Compliance

Compliance Officers scope/responsibility is expanding from company

to ecosystem compliance:

•Third Party Risk Management becomes critical:– Enterprise

Risk Management to Ecosystem

Risk Management– Corruption/Bribery risks become ubiquitous and new risks emerge– Upstream and downstream selection, due diligence, contracting,

management plans and monitoring play a key role in that new configuration

•Risks are increased with the multiplication of new partners and

activities:– Suppliers and contract organizations– Wholesalers/pharmacy chains/providers– Governments, health authorities, payers– Academia, biotech, medtech– Non‐traditional entrants


Pharma 2.0 – Evolution of the sales model

• The traditional sales force will shrink dramatically and be

replaced with Alternative Channels reaching new customers, Key

Account Manager managing tender processes, and Alliances:

Today• Sales Reps

‐

GPs / Specialists

‐

Practice Managers

‐

Nurses

‐

Pharmacists

‐

(...)

Tomorrow

• Multichannel

• Promotion Alliances

• Key Account Managers

‐

Government

‐

Payers

‐

Providers

‐

(...)


Compliance 2.0 – Commercial Compliance

Compliance Officers will face increasing commercial complexity:

• Multichannel

– The multiplication of new sales channels

including the use of call centers, Internet, mobile Apps or service

reps renders compliance more complex and risks ubiquitous.

• Authorities

and Public Officials – The emergence of KAMs and

Partners creates new interactions risks with government, health

authorities and payers– NDAs, Pricing and reimbursement negotiations, public tenders, formulary

inclusion, protocol inclusion, (...)


Pharma 2.0 – Evolution of the distribution model

Compliance Officers will face increasing distribution complexity:

• New distribution providers ‐

The industry has traditionally relied

on wholesalers to distribute its products. HCOs, HMOs,

Pharmacy Chains, Online Pharmacies will become more

prominent in the distribution chain.• Direct to Point of Sales ‐

The proliferation of inexpensive

overnight courier services will make it feasible to ship medicines

directly to pharmacies. • Direct to Patients ‐

Primary‐care medications will be made

available in ‘Vending Machine’

after scanning an electronic

prescription barcode on a mobile phone, or delivered directly at

home. It will allow pharmacists to have more time to provide

services to patients


Compliance 2.0 – Patient Compliance


The provision of healthcare is moving closer to patients:

• The secondary‐care sector will contract– Clinical advances will render previously terminal diseases chronic

– Healthcare provider will provide secondary care at home

– Hospital will focus on specialty care that cannot be supplied anywhere else

• The primary care sector will expand– General practitioners will perform more minor surgical procedures

– Nurses will perform basic diagnostics and prescribing activities

– Healthcare payers will increasingly mandate treatment protocols

• Self‐medication and self‐diagnostic sectors will expand– More and more products will be switched from prescription to OTC

– Web‐based self‐diagnostics

Compliance 2.0 – Patient Compliance

The next frontier ‐

Compliance Officers become more patient centric as

the industry becomes more creative to serve patient needs:

•Patient Association Programs

=> Association support

•Patient Adherence Programs

=> Adherence to treatment

•Patient Loyalty Programs

=> Reward brand loyalty

•Patient Affordability Programs

=> Health financing

•Patient Information Programs

=> Disease awareness

•Patient Support Programs

=> Free drugs for poorest

•Patient Prevention Programs

=> Disease prevention

•Patient Tele‐Health Programs

=> Virtual medical support

•Patient Homecare Programs

=> At home patient care

•Patient Diagnostic Programs

=> Disease diagnostic support

•Patient Emergency Programs

=> Emergency patient support

•Patient Records Programs

=> Pharmaco‐economics


Compliance 2.0 –

Innovation Compliance

Exponential growth of innovation spreads across all corporate

functions and partners:

•Innovation advisor –

Compliance Officers play a key role working

with all business functions to ensure compliance is embedded into

the DNA of all new innovations.

•Strategic partner –

Multiplication of new regulatory

requirements may render strategies quickly non‐compliant or

ineffective, so Compliance Officers advise the business to ensure

compliance of new strategies and influence their design to make

them future proof and preserve innovation


Compliance 2.0 –

Digital Compliance

Compliance Officers scope/responsibility will expend to the virtual world:

• Data Privacy risks – Patients, Customers and HCPs’

personal

information becomes a strategic commodity. Increasing volume are

collected, analyzed and transferred increasing potential for breaches

and secondary uses. The emergence of social media, cloud computing

and mobile technologies worsen the risk with personal information

becoming ubiquitous. Emergence of Binding Corporate Rules (BCRs).

• Off‐Label risks – Promotion goes digital with new virtual promotion

channels designed to reach customers more effectively such as

eDetailing or information websites. Off‐label risks are on the rise.

• Trade control risks – Research is externalized to partners and flows of

sensitive research information are transferred across the world.

• Anti‐trust /Competition risks –

Closer relationship and alliance creates

new anti‐trust and competition risks


Compliance 2.0 –

Compliance Interoperability

• Global standards convergence –

Compliance standards will

converge among Multinational Companies

• Compliance interoperability

– As MNCs partner more and

more together in the new ecosystem, Compliance

cooperation becomes critical to increase speed, reduce costs

and risks.

• Compliance resources sharing – With the multitude of

interactions in the ecosystem, partners become over‐

audited/due diligenced/monitored. The industry start to

work more like a consortium, using common auditing and

due diligence standard, and joint task force to audit a third

party only once (sharing cost and information).


Compliance 2.0 –

Behavioural Compliance

• Behavioural Sciences ‐

People do not behave rationally like

we thought for many years, actually they seem to behave

irrationally most of the time: cognitive bias. But these bias

are predictable and can be influenced...

• Nudges

‐

Compliance Programs develop new mechanisms

using these predictable bias to ‘nudge’

employees and

stakeholders toward better behaviours and outcomes.

Hence moving from correction to prevention.

• Automated controls –

Controls leave an Ad Hoc stage to

become automated and preventive. They are not bolt‐on but

become embedded into daily business processes and

technologies.


Compliance 2.0 – Our Experience

• We have Examined the Health Business in Emerging Markets

and Specifically Latin America.– The industry is under attack from the bottom and the top.

– Multination Firm Growth is Slowing Down.

– Emerging Market Firms are Growing.

• We have an Emerging Market Health Business email discussion

list. To subscribe, please email:

[email protected].


Compliance 1.0 –

Future of the Function

• An Audit Function.– Says more no’s that yes’s.

• Not Creative– Follow the Letter of the Law.

• Role– Seen by Firm as a hindrance.

• Focus– Internal

• No Intellectual Property– Outsourced?


Compliance 2.0 –


• An Adviser function.– Says more yes’s that no’s.

• Sales and Marketing Function.– Enhance Brand.

• Creative and Innovative.– Grow within the Letter of the Law.

• Role.– Seen by Firm as a key Supporter.

• Focus.– More External than Internal.


Compliance 2.0 –



PartnershipCollaboration

Compliance

Insight

Control

Market

Insight

Compliance

Knowledge

Sources

• A. Sharma & J. Durand –

Compliance 2.0 ‐

University of Miami

• PwC – Pharma 2020, The vision

• Ernst & Young –

Progressions, Building Pharma 3.0

• AT Kearney –

Pharmaceuticals, Reaching the Tipping Point

• McKinsey –

India Pharma 2020

• Boston Consulting Group – BCG Perspectives HealthCare

• Goldman Sachs –

Current state of the pharmaceutical industry

• J. Durand –

Commoditization of research ‐

University of

Cambridge


Dr. Julien Durand is currently Regional Compliance Officer Latin

America based

at AstraZeneca Americas Headquarters near Philadelphia (USA). Previously, he

was working for many years in different capacities at AstraZeneca Global

Headquarters in London (UK) : Global Privacy Officer, Director Global

Compliance Strategy and Implementation, Global Head of Anti‐Corruption and

Secretary to the Global Compliance and Risk Committee. Julien was reporting

into the Global Compliance Officer and a member of the Global Compliance

Leadership Team. He joined AstraZeneca as Corporate Compliance Officer for

the French business unit based in Paris (France).

Prior to joining AstraZeneca, Julien has worked many years as a Strategy and

Management Consultant, Financial Auditor, Legal Advisor and Researcher in

international organizations such as Mazars, Marsh & McLennan, Prudential

Securities, NASA, Bird & Bird, SNR Denton or Sector Consulting.

He has been

on the Board of various not‐for‐profit organizations and is a member of the

PCF Planning Committee.

Julien was awarded a PhD in Engineering Science from Ecole Centrale Paris, an

MSc in Aerospace Science and Medicine from ISU, an MBA from University of

Cambridge, and an LLM in International Business Law from ISC Paris. He is a

Certified Healthcare Compliance Professional (CHCP) from the University of

Miami and certified in Healthcare Leadership and Strategy from INSEAD,

programs which he has co‐develop with other CCOs.

He has lived more than 20 years aboard in Africa, Asia, Europe and Americas,

and is a certified marital arts / self‐defence instructor.

Dr. Julien Durand

Contact details:[email protected]

Dr. Arun

Sharma is Executive Director of the JAE Leadership Institute and

Professor in the Marketing Department at the School of Business Administration,

University of Miami. Arun

has extensive knowledge of firms through his

experience in consulting, and conducting seminars. He is a well

known expert in

Global Market Trends, Leadership Strategies, Sustainable Competitive Strategies,

and Market Strategy and his expertise is in designing and implementing

corporate strategies. He has consulted and conducted seminars for companies

such as Accenture, Agilent Technologies, Ambrosetti, American Express, AT&T,

Bell South, Citrix, Ericcson, Exxon, Goodyear, HP, IBM, Lucent, Macy’s,

MasterCard, Motorola, Siemens, Sprint, Telecom Italia, Telecom Italia Mobil, Visa

International, Wal‐Mart and Western Union. He has extensive expertise in

business and consumer markets, technology, financial, telecommunication,

healthcare, consumer goods and consulting industries.

He has previously taught at the University of Illinois at Urbana‐Champaign where

he received his Ph.D. in marketing in 1988. Arun

also has an MBA and a Bachelor

of Engineering degree in Metallurgy. Prior to joining the academic world, he

worked for three years in a high‐technology firm where he handled product

management and sales management responsibilities.

Arun

has published extensively (over 80 refereed articles) and is on

the review

board of major journals and has received many excellence in research and

excellence in teaching awards from the School of Business Administration at the

University of Miami. He can be contacted at 305.284.1770, Fax:

305.667.2557

and email: [email protected].

Dr. Arun

Sharma

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