International Experience on How Pharmaceutical Companies Handle Misconduct

Transcription

1 International Experience on How Pharmaceutical Companies Handle Misconduct Giuseppe Falbo Novartis Business Practices Officer (Asia, Middle East, Africa, Latin America) Sao Paulo, 3 October 2012

2 Content 1. Compliance Programs 2. Misconduct Handling 3. How Novartis handles misconduct 4. Help in ensuring Compliance 2 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

3 Compliance Programs All companies have a strong Compliance program in place: Tone from the Top Policies, Guidelines, SOPs Training, Communication and Educational Programs Strong Internal Controls Relatively easy access to the Compliance Officer Anonymous reporting systems 3 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

4 1. Compliance Programs 2. Misconduct Handling 3. How Novartis handles misconduct 4. Help in ensuring Compliance 4 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

5 Different ways of handling misconduct Pharmaceutical companies operating internationally have different approaches with regards to misconduct handling: Clear Policies and/or SOP in place for misconduct handling Consolidation of all allegations of misconduct at Corporate Level Mandatory consultation between different functions Guidelines on who and how to investigate depending on the matter reported Vs. Handling left to the judgment of the local management 5 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

6 Some examples All cases are reported to a dedicated office in Compliance. A staff of attorneys review the allegations and determine how to proceed. Only cases related to Finance, Sales and Marketing must be reported to a dedicated Compliance Director. The latter discusses the case with a Legal Director and with the Head of Investigations (Security), they jointly determine the course of action, monitor the progress of the investigation (in FCPA and/or big cases), send the report to the relevant management and finally make sure that a remedial action plan is in place. 6 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

7 Some examples (cont.) All misconduct, with the exception of Employee Relations matters, must be reported to a dedicated office in Compliance. If necessary they consult with other relevant functions to determine how to handle the case. Guidelines are in place to determine whom to assign the investigation to. Whistleblowers can directly approach the Audit Committee, which determines how to handle their case. Investigations are generally assigned to Corporate Security. Written SOPs are in place on how to assign and how to conduct the investigation. 7 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

8 Some examples (cont.) Misconduct is usually reported to Legal, Compliance or HR locally. They are responsible for rating the risk involved. If of low risk they would decide who would be best suited to investigate the allegations. If of higher risk and related to fraud or corruption, they would have an established timeframe in which to report it to Internal Audit. The latter would be responsible for the investigation and reporting to the Corporate Audit Committee. Infringements of company policies are investigated by the local Compliance Officer and later reported to the Head Office and filed in a database. Serious cases are immediately reported and handled by Group Compliance. 8 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

9 Some examples (cont.) All cases reported centrally, minor cases handled locally, investigation assigned only to employees outside the country or to consultants. If there is the suspicion of a systemic problem, the investigation is assigned to a law firm. Serious breaches are reported to the relevant Regional management areas and, in the USA, a sanitized summary of these findings are posted on the internal website All cases reported to the General Manager in the country are left to his/her discretion Refer most of the cases to Security or to the local management with the aim of resolving the problem 9 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

10 Centralized handling Vs. local The local management is the best resource the company has to understand the issues on the field and can respond more quickly to them. However a central office responsible for handling misconduct, if appropriately staffed and well resourced can guarantee: Independent assessment and investigation Vs. resistance to respond to and/or escalation of an issue Professional approach Vs. inadequate skills and/or experience Maintain confidentiality Vs. fear of retaliation 10 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

11 Centralized handling Vs. local (cont.) Identify trends of misconduct and/or best practices across countries/divisions Vs. limited view Ensure appropriate resolution Vs. potentially superficial approach Maintain consistency in sanctions across all areas of the company 11 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

12 1. Compliance Programs 2. Misconduct handling 3. How Novartis handles misconduct 4. Help in ensuring Compliance 12 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

13 Novartis Business Practices Office (BPO) Employees are required to report any instance of possible misconduct of which they become aware directly to the BPO or to their line manager, Compliance, HR, Legal Department, Corporate Security. Any of the above mentioned individuals receiving a report of possible misconduct, must report such information to the BPO without further disseminating the information The process covers all employees and third parties acting on behalf of Novartis The BPO, established in 2005, is part of Corporate Security and reports to the Chairman 13 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

14 Regional approach 14 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

15 Easily accessible The BPO can be reached via: Phone Fax Mail Novartis phone and web based Alertlines are available worldwide In person 15 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

16 Assessment Every allegation received is carefully reviewed, sometimes in conjunction with the other functions, to determine: If there are reasonable reasons to believe that a law/ policy has been violated The credibility of the source If there is enough information to start a meaningful investigation The seriousness of the information received A prompt response is provided to the reporters In cases where immediate action is needed the Business is immediately informed If necessary Non-BPO matters are shared with the appropriate management 16 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

17 Investigation Preliminary enquiries might be necessary to determine that the report is not malicious and/or baseless The BPO assigns the case to the most suitable investigator Only the BPO can authorize an investigation into misconduct and assign investigative responsibility to the most competent function Consult with Legal in case of alleged violations of anti corruption laws to determine the most appropriate methods of handling them Special attention is dedicated to potential violations of US Securities laws 17 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

18 Resolution and Lessons Learned Ensures that the relevant area of management receives the investigation report Protects the identity of the reporter and other people involved in the investigation Monitors and ensures consistency of remediation Investigates cases of retaliation Provides Compliance with material for lessons learned to understand why a breach has occurred and consequently work on preventing possible recurrence When possible, feedback is provided to the complainant 18 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

19 Documentation and Reporting Accurate and consistent record-keeping is ensured for all the reported cases, the entire process is appropriately documented and filed in accordance with applicable laws Regular updates to the Audit and Compliance Committee (quarterly), Finance Committee (monthly) and other senior management (ad hoc) This simple process provides the required corporate oversight, transparency, consistency and accountability 19 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

20 1. Compliance Programs 2. Misconduct handling 3. How Novartis handles misconduct 4. Help in ensuring Compliance 20 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

21 BPO is an integral part of the Compliance framework 21 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

22 BPO & the new Code of Conduct 22 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

23 Important part of the Compliance framework The culture of Compliance in organizations is also measured by how free employees are to speak up A healthy misconduct reporting, also of minor cases, helps in preventing serious issues Early identification of problems and professional investigations help in mitigating the consequences of wrongdoing, especially in the current more vigorous enforcement environment The BPO is part of the Group Misconduct Prevention Group, headed by the Chief Compliance Officer Employees are encouraged to contact the BPO 23 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

24 BPO Awareness Campaign BPO Film CEO Video Details of the BPO are provided at on-boarding of new staff, Town Hall meetings, Global Compliance/ HR/ Legal meetings, etc. Intranet site Educational material (posters, cards, case studies, etc.) BPO Logo 24 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

25 BPO cases Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

26 Increase of cases Assessed that growth is due to increased awareness/compliance and trust in the process All associates have access to policy, rationale and multiple reporting methodologies The majority of the cases are of low risk/low impact and mainly due to individual wrongdoing The BPO process is widely accepted by associates as reliable, trusted and an effective program 26 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct

27 DON T WAIT FOR THE BIG PROBLEM TO HAPPEN IDENTIFY AND PROPERLY ACT ON IT... Thank you! Giuseppe (Pino) Falbo 27 Giuseppe Falbo - International Experience on How Pharmaceutical Companies Handle Misconduct