Multi-Industry Chief Compliance and Ethics Officers

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  Pharmaceutical Compliance Roundtable ReportMar 26, 2012 5:14 PMSCCE Social Media Manager
  RE:Pharmaceutical Compliance Roundtable ReportMar 26, 2012 8:07 PMDonna Boehme
  RE:Pharmaceutical Compliance Roundtable ReportMar 27, 2012 8:19 PMJoseph Murphy
  RE:Pharmaceutical Compliance Roundtable ReportMar 27, 2012 8:59 PMDonna Boehme
  RE:Pharmaceutical Compliance Roundtable ReportMar 28, 2012 10:39 AMDonna Boehme
  RE:Pharmaceutical Compliance Roundtable ReportMar 30, 2012 9:05 AMMarco Rivas
  RE:Pharmaceutical Compliance Roundtable ReportMar 30, 2012 9:19 AMFrank Ruelas
  RE:Pharmaceutical Compliance Roundtable ReportMar 30, 2012 11:25 AMPatrick Gnazzo
  RE:Pharmaceutical Compliance Roundtable ReportMar 30, 2012 11:55 AMDonna Boehme
  RE:Pharmaceutical Compliance Roundtable ReportMar 27, 2012 11:46 AMFrank Ruelas
 

1.
Pharmaceutical Compliance Roundtable Report
From: SCCE Social Media Manager
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 26, 2012 5:14 PM
Subject: Pharmaceutical Compliance Roundtable Report
Message:
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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2.
RE:Pharmaceutical Compliance Roundtable Report
From: Donna Boehme
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 26, 2012 8:07 PM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
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.htmlhttp://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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3.
RE:Pharmaceutical Compliance Roundtable Report
From: Joseph Murphy
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 27, 2012 8:19 PM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
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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4.
RE:Pharmaceutical Compliance Roundtable Report
From: Donna Boehme
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 27, 2012 8:59 PM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
Alan Yuspeh (HCA CECO) recently spoke on these issues here:  http://tfoxlaw.wordpress.com/2012/03/22/three-keys-to-the-role-of-a-chief-compliance-officer/.   The key point for me is for Boards, regulators and enforcers  to say to companies:  "show me".  Show me that you have empowered the CECO & that there is sufficient autonomy to do the job, otherwise everything else you have done is just bells and whistles. The burden should be on the company to demonstrate this,  and the first step is to reflect this in our policy guidance and regulators' checklists (see recent comments from SEC head of inspections and examinations Carlo di Florio) including the Organizational Sentencing Guidelines.   

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Donna Boehme
Principal
Compliance Strategists LLC
New Providence NJ
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5.
RE:Pharmaceutical Compliance Roundtable Report
From: Donna Boehme
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 28, 2012 10:39 AM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
Here's a new CECO appointment from Merck that is correctly positioned (excerpt from press release below).  Not a surprise that Merck has taken away this message,  but my point is that all companies even outside pharma should have the burden of showing that they have adequately  empowered their CECO roles.  If they decide to have them report through the GC, which is not ideal,  they should be prepared to demonstrate meaningful levers of autonomy & seat at the table. This is a practice that should not be restricted to highly regulated industries or those that find themselves under a CIA or DPA.

press release

March 28, 2012, 9:30 a.m. EDT

Merck Appoints Michael J. Holston as Chief Ethics and Compliance Officer

Long-time Merck and Schering-Plough Executive Richard S. Bowles to Retire

 

 

 

WHITEHOUSE STATION, N.J., Mar 28, 2012 (BUSINESS WIRE) -- Merck /quotes/zigman/574389/quotes/nls/mrk MRK +0.24% , known as MSD outside the United States and Canada, today announced the appointment of Michael J. Holston as chief ethics and compliance officer effective June 25, 2012. He will succeed Richard S. Bowles, who has decided to retire from the company after more than 35 years with Merck and the former Schering-Plough. In his new role, Holston, 49, will report directly to Kenneth C. Frazier, Merck's chairman and chief executive officer, and will serve on the company's Executive Committee. He will be responsible for driving high ethical standards and compliance across the company's business globally.

"Ethical business practices and good corporate governance are important to us and our stakeholders, and we are committed to adhering to the laws and regulations governing our activities worldwide," said Frazier. "We are delighted to welcome Mike as our new chief ethics and compliance officer. His extensive experience managing compliance with healthcare laws across international businesses and his background with Merck and our industry make Mike a terrific leader for our ethics and compliance organization and a member of our Executive Committee.

"I also want to thank Rick Bowles for nearly four decades of dedicated service to Merck and Schering-Plough. His strong leadership established the global compliance organization for the combined new company following the merger with Schering-Plough. He developed the right structure, capabilities and leadership for the function, creating a solid base upon which Mike can continue to build a world class ethics and compliance organization going forward."

Holston most recently served as executive vice president and general counsel for Hewlett-Packard Company, where he oversaw compliance, government affairs, privacy, ethics operations and legal affairs. Prior to his role with Hewlett-Packard, Holston was a partner in the litigation practice at Morgan, Lewis & Bockius LLP, where he served as external counsel to Merck on matters such as product litigation, government investigations and compliance with healthcare laws and regulations. Before joining Morgan Lewis, he served as a prosecutor in the criminal division of the U.S. Attorney's Office for the Eastern District of Pennsylvania.

"I'm excited to be joining Merck at this important period of change for the company and the pharmaceutical industry," said Holston. "I look forward to working with dedicated and talented people across the company, helping to champion Merck's high ethical and compliance standards so the company can focus on what it does best -- discovering and developing innovative new medicines and vaccines."

Holston received his J.D. from Villanova University School of Law, Villanova, Penn. and a B.S.M.E. from the University of Notre Dame, South Bend, Indiana. He also is a fellow in the American College of Trial Lawyers.




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Donna Boehme
Principal
Compliance Strategists LLC
New Providence NJ
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6.
RE:Pharmaceutical Compliance Roundtable Report
From: Marco Rivas
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 30, 2012 9:05 AM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
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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7.
RE:Pharmaceutical Compliance Roundtable Report
From: Frank Ruelas
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 30, 2012 9:19 AM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
Marco,

Exclusive of when required by a Corporate Integrity Agreement (CIA), I know of no requirement that mandates that an organization (in healthcare) has a compliance program except for that in the PPACA.  However, given all that is going on with the PPACA, depending on what comes out of any future rulings will determine if this requirement will continue to exist or not.

So as you mentioned, "best practices" to include those that may have been steered in one direction or another by such sources as Compliance Guidance Documents from the OIG in my view are likely major contributors or factors that help mold those compliance programs (along with organizational history) that many of us see within healthcare.

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Frank Ruelas
Principal
HIPAA College
Casa GrandeAZ
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8.
RE:Pharmaceutical Compliance Roundtable Report
From: Patrick Gnazzo
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 30, 2012 11:25 AM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:


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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9.
RE:Pharmaceutical Compliance Roundtable Report
From: Donna Boehme
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 30, 2012 11:55 AM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
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.  

-----------------------------------------
Donna Boehme
Principal
Compliance Strategists LLC
New Providence NJ
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10.
RE:Pharmaceutical Compliance Roundtable Report
From: Frank Ruelas
To: Multi-Industry Chief Compliance and Ethics Officers
Posted: Mar 27, 2012 11:46 AM
Subject: RE:Pharmaceutical Compliance Roundtable Report
Message:
What I interesting (and encouraging) is that some of the summary statements and opinions by those in the roundtable discussions reflect many of the same or similar views of those involved in CIA management which I have been exposed to either as part of an IRO effort or through reviews of CIAs with entities as they plan on how they will be supporting the requirements indicated within the CIA.

I would be very surprised if any future roundtable discussions varied significantly in this respect but then again...I like surprises!

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Frank Ruelas
Principal
HIPAA College
Casa GrandeAZ
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