Marco, I agree with Pat and Joe. And even though the FSG are not mandatory, in practice companies ignore them at their peril. Joe's enumerated elements address points not (yet) adequately covered in the FSG but which can be seen in the requirements of CIA's, remarks from lawmakers like Sen. Grassley, lessons learned told at compliance and ethics conferences, and in studies like the RAND reports previously cited. The issues of empowerment, autonomy, and direct access to the governing body are also being addressed by policymakers both in the US and outside the US (French Competition Authority, OECD Good Practice Guidance, Canadian Competion, etc). So I would view all of these as tools & platforms to help you best structure your program and have discussions with management and the board.
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Original Message:
Sent: 03-30-2012 11:25 AM
From: Patrick Gnazzo
Subject: Pharmaceutical Compliance Roundtable Report
Marco,
To answer your question, I believe we have to go back to the language in the Sentencing Guidelines: (see bolded paragraphs)
"8B2.1. Effective Compliance and Ethics Program (a) To have an effective compliance and ethics program, for purposes of subsection (f) of @8C2. Culpability Score) and subsection (b)(1) of @8D1.4 (Recommended Conditions of Probation - Organizations), an organization shall-
(1) exercise due diligence to prevent and detect criminal conduct; and
(2) otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.
Such compliance and ethics program shall be reasonably designed, implemented, and enforced so that the program is generally effective in preventing and detecting criminal conduct. The failure to prevent or detect the instant offense does not necessarily mean that the program is not generally effective in preventing and detecting criminal conduct.
(b) Due diligence and the promotion of an organizational culture that encourages ethical conduct and a commitment to compliance with the law within the meaning of subsection (a) minimally require the following:
(1) The organization shall establish standards and procedures to prevent and detect criminal conduct.
(2) (A) The organization's governing authority shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.
(B) High-level personnel of the organization shall ensure that the organization has an effective compliance and ethics program, as described in this guideline. Specific individual(s) within high-level personnel shall be assigned overall responsibility for the compliance and ethics program.
(C) Specific individual(s) within the organization shall be delegated day-to-day operational responsibility for the compliance and ethics program. Individual(s) with operational responsibility shall report periodically to high-level personnel and, as appropriate, to the governing authority, or an appropriate subgroup of the governing authority, on the effectiveness of the compliance and ethics program. To carry out such operational responsibility, such individual(s) shall be given adequate resources, appropriate authority, and direct access to the governing authority or an appropriate subgroup of the governing authority."
Joe Murphy's comment below is the best statemate I've seen regarding what a CECO needs to perform the task above:
"When companies are looking at the chief compliance and ethics officer position, they should start with three structural elements: empowerment, so the person can get the job done; seat at the table or positioning, so the compliance officer is present when decisions are being made; and independence or autonomy, so the person has some freedom to act and has minimal conflicts of interest. The compliance officer should also be under the control of the board, meaning he or she cannot be fired, demoted, etc, except with the board's prior approval."
Therefore, I think it is both, a Requirement and a Best Practice.
Pat Gnazzo
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Pat Gnazzo
Principal
Better Business Practices
McLean, VA
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Original Message:
Sent: 03-30-2012 09:05 AM
From: Marco Rivas
Subject: Pharmaceutical Compliance Roundtable Report
These three structural elements, are they borne from regulation/law or are they merely best practices? Is this how organizations should structure the CC dept. or how they must structure it?
BTW - Thanks for the education this blog provides, in easily digested morsels!
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MarcoRivas
Director, Corporate Compliance
Rochester Primary Care Network
RochesterNY
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Original Message:
Sent: 03-27-2012 08:18 PM
From: Joseph Murphy
Subject: Pharmaceutical Compliance Roundtable Report
Donna - A good point. When companies are looking at the chief compliance and ethics officer position, they should start with three structural elements: empowerment, so the person can get the job done; seat at the table or positioning, so the compliance officer is present when decisions are being made; and independence or autonomy, so the person has some freedom to act and has minimal conflicts of interest. The compliance officer should also be under the control of the board, meaning he or she cannot be fired, demoted, etc, except with the board's prior approval. Cheers, Joe
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Joe Murphy CCEP
Of Counsel CSLG
HaddonfieldNJ
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Original Message:
Sent: 03-26-2012 08:07 PM
From: Donna Boehme
Subject: Pharmaceutical Compliance Roundtable Report
Thanks for posting this Eric. It shows that the empowered CECO issue has relevance beyond companies under CIA's. Regulators and policymakers outside health care are looking at this issue as well.
SMEs may be able to make the argument that they do not have sufficient resource to justify a standalone CECO role but they still need to create levers of independence. Larger and more complex organizations should have the clear burden of showing that their CECOs are positioned for autonomy and success, and this needs to be more than "our GC is totally awesome." For additional discussion on this see the 2009 and 2010 RAND symposium reports, including the invited RAND white papers attached to each report:
http://www.rand.org/pubs/conf_proceedings/CF258.html; http://www.rand.org/pubs/conf_proceedings/CF277.html
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Donna Boehme
Principal
Compliance Strategists LLC
New Providence NJ
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Original Message:
Sent: 03-26-2012 05:13 PM
From: Eric Newman
Subject: Pharmaceutical Compliance Roundtable Report
This message has been cross posted to the following eGroups: Chief Compliance and Ethics Officer Health Care Network and Multi-Industry Chief Compliance Ethics Officer Network .
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View the report at http://go.usa.gov/EVP
This report summarizes the government-industry Pharmaceutical Compliance Roundtable convened by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services on February 23, 2012. Compliance professionals representing 23 pharmaceutical manufacturers currently operating under Corporate Integrity Agreements (CIAs) participated in the day-long event. The participants discussed their experiences under CIAs and specific activities that they find to be effective to promote compliance. The report contains helpful insights that can be used by all types of providers as they evaluate and enhance their own compliance programs.
Interesting Paragraph:
Organizational structure issues: CIAs require the appointment of compliance officers who are members of senior management and are not subordinate to the general counsel or the chief financial officer. Participants reported that they have found this structure to be beneficial. Some participants noted that some companies not under CIAs continue to make compliance officers subordinate to general counsels and suggested that OIG clarify (or reiterate) the risks associated with this type of reporting structure.
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Thank you,
Eric Newman, Esq., CCEP
Social Media Manager
HCCA/SCCE
eric.newman@corporatecompliance.org
(952) 405-7938
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