How Can Life Sciences Companies Prevent Bribery and Corruption?Date:
08 Nov 2018
Thursday, 8th November 2018
Washington DC – CRI Group, a Global Leader in Risk, Compliance, Anti-Corruption Management Systems and human resource risk management, today launches a major report on bribery and corruption in the Life Sciences industry, and asks ‘Is ISO 37001:2016 the Answer?’
How to eradicate unethical practice in the life sciences industry has been a major concern for the industry, following a series of SEC investigations during this decade. Given the crucial role that healthcare plays in society, the impact of unethical and/or illegal behaviour can be particularly harmful.
CRI Group has conducted an empirical review of international laws and conventions; professional association codes; and individual company Anti-Bribery and Anti-Corruption policies, as well as conducting in-depth interviews with ABAC and Life Sciences legal professionals, in order to validate the efficacy of existing measures, and to identify gaps in good practice and enforcement.
The conclusions of the report, include:
The UN Convention and OECD Convention offer powerful, guiding principles for the Life Sciences industry that are necessary, but not sufficient.
Industry codes of good practice, including ABHI Code, ABPI Code, MHRA’s Blue Guide, and the MedTech Europe Code are important, mainly for their quantitative thresholds. Whereas other laws and conventions broadly prohibit “excessive” offers of bribery, professional association codes set clear restrictions. They are also specially tailored to the life sciences industry.
Company-specific risk mitigation steps are indispensable but have also proven to be insufficient.
Legislation ‘with teeth’ is necessary for a truly effective regime. Examples include the Foreign Corrupt Practices Act in the US (enforced by the SEC), and the UK’s Bribery Act. While such enforcement agencies tend to have ‘long-arms’, the absence of a coherent international regulatory regime for an industry as global as Life Sciences means risk remains.
Our analysis of six pharmaceutical Anti-Bribery and Anti-Corruption violations found they all exhibited inadequate bribery risk assessment; a lack of top management responsibility; insufficient employee awareness and training; no third-party culpability; limited support for whistle-blowers; inadequate internal accounting controls; and limited continual improvement. All of these issues would, in theory, have been addressed by adherence to ISO 37001.
Commenting on the report, Aneta Nastaj of CRI Group said, “If a life sciences company had appropriately and fully followed all of the ISO 37001 requirements, bribery risk in the high profile cases that we analysed would have been greatly mitigated.
“The benefit of ISO 37001 is that it is an internationally accepted standard, and whereas an individual company may try to replicate its tenants in its own ABAC code, any such replication lacks the impartial nature and widely accepted reputation of ISO 37001 certification.”
Co-author Anne Hewitt, also of CRI Group, added, “If a company earns ISO 37001 certification following appropriate training, tailors the ISO 37001 requirements to its business operations, and adheres to all other ABAC laws, conventions, and codes, then this certification should prove a strong and effective deterrent against bribery in future.”
Our thanks go to the following individuals for their active participation in this study:
- James Fry – Mills & Reeve
- Alison Dennis – Fieldfisher
- Nanyi Kaluma – Allen & Overy
- Lincoln Tsang – Arnold & Porter
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About CRI Group
CRI Group is a world-leading corporate research and investigations organisation. Established in 1990. In 2018 it was the first organisation, globally, to be an accredited certifier of the ISO 37001 anti-bribery management system standard.
For more information on how CRI Group can help you, contact us today.