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Compliance in LATAM: Interesting

Case Studies from Pharmaceutical

and Medical Devices Industry

DIANA RAMIREZCompliance Officer & Senior Counsel LATAM, ConvaTec.

Colombia

DIANA RAMIREZ

• Compliance Officer and Senior Counsel for LATAM at ConvaTec

(Medical Devices).

• Compliance Officer at Boheringer Ingelheim (Pharma).

• Legal and Compliance Business Partner at Bayer (Pharma, Consumer

Care, Medical Devices, Animal Health, Agriculture).

• Attorney at a Law Firm (Brigard & Urrutia, Colombia).

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Compliance in pharmaceutical and medical

devices industry in LATAM, at a glance.

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In these sectors of the economy, Compliance is not just about anti-

corruption laws, FCPA, prevention of money laundering, review of

risk lists or compliance with regulations on the prevention of

economic crimes.

Compliance in Pharma and Medical Devices is alive: we interact

with health care professionals, patients, caregivers, insurers,

clinics and hospitals, Governments, intermediaries, suppliers and

clients.

Believe me: there is never a day the same as another. That makes

the job interesting!

In addition to ensuring compliance with local laws on

anticorruption, prevention of money laundering, etc., in this

sector it is vitally important to review:

• Company's internal Compliance Codes.

• Local o regional Industry Codes of Ethics: Pharma and MD

have particularly strict codes in most LATAM countries, such

as Colombia, Mexico, Brazil and Ecuador, inspired by the

European and American regulations of both sectors (EFPIA,

Farmaindustria, AFIDRO, ANDI, AdvaMed, ABIMED, etc.)

• Local regulations on transparency, relationship and

commercial agreements with HCP.

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• Local and regional regulations on interaction with competitors

(scientific claims, ethics in the management of clinical

information).

• Data Privacy, Habeas Data and clinical data management in

patient programs.

• Regulations on Clinical Research and Clinical Studies.

• Handling of samples and delivery to HCP.

• Gifts, meals, travels, trainings and educational sponsorships to

HCP.

• Conflicts of Interest.

• Philanthropic donations.

… and many more.

So:

1. In South America, this sector of the economy is over-regulated, perhaps

due to an effort by governments and the industry itself to self-regulate

and minimize the risks of corruption, which affect most countries.

2. Although Pharma is a more regulated sector than MD, both are highly

regulated, regionally, locally and even in different ways, within the same

country. Eg Brazil.

3. The strictest parameter must always be applied: not only regarding

controls, but also amounts or limits (Eg limits for dinners, gifts or

registrations delivered to HCP). Furthermore, if we are talking about

multinational companies that have presence in different countries.

Tolerance for corruption should be zero.

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Some cases in the region: Mexico, Colombia,

Brazil, Chile*. Analysis, development and

conclusions.

*The names of those involved have been eliminated for confidentiality reasons.

Mexico

“Better use it than destroy it”

Employee D.L., a registered nurse, receives a number of product samples for the

proper performance of his duties from time to time, as a sales representative. In

the course of his work, he has been contacted by patients with whom he

establishes a relationship of trust. One day, a patient asks how much he would

charge for the samples so she wouldn't have to buy them at a drugstore. He sees a

business opportunity there, charging a very small price, for the benefit of patients

with reduced mobility who cannot leave home to acquire the products. Over time,

the supply increases with samples he found at the office and near-expiring

products and his clients increases significantly. The company detects shortage of

products and finally D.L. entrepreneurship is discovered.

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“Better use it than destroy it”

What was wrong?

• Patient Programs must be outsourced or done with total independence

from sales and marketing areas.

• A sales representative should not have contact with patients, nor have

access to their sensitive information or sell products directly to them.

• There was negligence by the company in managing inventories (medical

samples and products near to expiration).

• The employee robbed the company (criminal case).

• Reputational damage to the company and Patient Program.

• Imagine an adverse effect from the intake or use of an expired product:

Criminal responsibility.

Colombia

“If the company wins and I win, what's wrong?”

As an assistant of a senior manager of the company, F. M. is responsible for organizing a team meeting, including travel planning, hotels, dinners, agenda and hiring and paying suppliers of print and audiovisual material.

F.M. has full autonomy to select suppliers and negotiate prices, so she orders the work to the company of her daughter’s father, an audiovisual producer, without requesting other alternatives or proposals. The payment is high, but in her opinion it's worth it because the contracted video was very well done. In addition, it coincides with the girl's food quota and school payments.

After several months, the company finds that for 3 years the same thing happened, the costs were abnormally high and it was discovered, without F.M. statement, the relationship between F.M. and the supplier.

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If the company wins and I win, what's wrong?”

What was wrong?

• There was a clear violation of the company's conflict of interest policy.

• If the employee had looked for other supplier options and had submitted

them to the decision of other people within the company, and had declared

the potential conflict of interest, if that was the best option for the company,

it would probably have been selected.

• The employee argued that she did not know that this was a conflict of

interest. It is very important that Compliance trainings and declaration of

conflicts be always documented, in writing.

Brazil

“The Ghost Doctors”

A. L., a member of the company marketing team, is responsible for monitoring

the execution of the area's budget. In addition to investing in promotional print

materials, obtaining sponsorships for healthcare professionals and promotional

activities, the team delegates the hiring of some key opinion leaders, doctors

and nurses, to deliver lectures at the forums and at frequencies requested by

the company.

Taking advantage of her autonomy, A.L. told the Legal Representative that he

must sign 12 contracts with speakers. After a year, it is established that some

of them have never performed the contracted services but received payment of

their fees.

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“The Ghost Doctors”

What was wrong?

• There was absolute negligence in the processing of contracts with the HCPs.

• Every contract must be in writing, establish a rate according to the Fair Market

Value and the need for the service must be justified. If a Speaker is hired, the

contract must state the subject of the conference, date and place.

• Adequate proof of the service provided should always be required as a condition

for paying the agreed fees. Otherwise, it can hide a corrupt payment.

• A legal representative cannot sign contracts without reading. There should be

more “eyes” checking the contracts.

• In some countries there is a legal obligation to report to the Government the

transfers of value that are delivered to HCP (USA / Sunshine Act., Colombia and

Brazil).

Chile

“An Employee with really bad luck”

For the adequate performance of her duties, P.T. must constantly travel locally and abroad, and the company has given her a corporate credit card.

She seems to be very unlucky: in one of her trips the airline lost her luggage and she had to use the credit card to buy clothes, shoes, toiletries and another suitcase. On other occasion, the hotel designated by the company was evacuated, having to stay in a luxury hotel without prior reservation. In another of her trips, the event lasted a long time, she missed the return flight and only managed to have another one, three days later, after the weekend. On this occasion, the luggage she carried was not enough for such a long stay, so she had to use her credit card to pay for clothes, shoes, accessories, toiletries and, of course, a spa, to alleviate the stress produced by such an overwhelming situation.

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“An Employee with really bad luck”

What was wrong?

• There was a clear violation of the corporate credit card policies and the

duty to have suitable supports in this type of transactions.

• In her defense, the employee alleged that they were necessary

expenses to carry out her work. It is important to make policies clear to

employees and communicate them appropriately.

• There was a "breach of trust" by the employee, which in some

legislation is also a crime.

Lessons learned and applicability

to other sectors.

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1. Consulting is always an option: asking industry organizations or the

government is not a sign of weakness or ignorance. Questions can be

consulted and that does not imply accepting responsibility.

2. Always applying the strictest parameter is the most prudent measure.

3. Don't reinvent the wheel: many issues have already been regulated in other

countries or industry organizations and you can suggest that they can be

applied by analogy.

4. Just as in Law, in Compliance, ignorance of the law does not serve as an

excuse. So, invest in education and training at all levels in your

organization, and always document them! Socialize your policies with your

main external stakeholders.

5. The simpler, the better: an extensive or rhetorical compliance policy

does not guarantee that it will be followed. Simplify your Compliance

policies and procedures, ensure that employees know them, have easy

access to them and are available in their own language.

6. Build bridges: far from being an obstacle, the Compliance Officer must

build a relationship of trust with the business, which allows him/her to

communicate unpreparedly with all the collaborators of the

organization. It's not just about talking; listening is the key!

7. Words go with the wind: document the processes, investigations, reports

of potential conflicts of interest and any situation that reaches

Compliance's hands.

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8. Don't let the message get lost: an annual online training is not enough.

Show up, get involved in meetings and business decisions from the

beginning and not just at the end, when there is already a problem.

9. Reinforce the presence of Compliance with periodic activities, such as

Compliance Week, newsletters or visits to the sales or production field.

Believe me, the employees will appreciate it.

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