Revolutionizing Ethics, Integrity and Compliance: How Indian Pharma Giants Can Secure Positions in the Global Market

In an era of increased scrutiny and evolving regulations, maintaining a strong ethics, integrity and compliance framework is essential for Indian pharmaceutical giants operating in the global market. The recent announcement of the Corporate Crime Database by the U.S. Department of Justice brings forth new opportunities for these companies to enhance their ethical practices, ensure compliance and harness their current positioning in the world market.

The Corporate Crime Database is a searchable database of corporate criminal cases that have been brought by the U.S. Department of Justice. The database includes information on the charges, penalties and dispositions of these cases. The database is a valuable resource for Indian multinationals as it provides them with insights into the types of corporate crimes that are being prosecuted by the U.S. Department of Justice. This information can help these companies to identify and mitigate their risks of engaging in corporate crime.

The Indian Pharmaceutical Sector: A Glance into the Background

Before delving into the strategies for enhancing the ethics, integrity and compliance framework, it is important to understand the background of the Indian pharmaceutical sector. The sector has experienced remarkable growth in recent years, establishing itself as a significant player in the global pharmaceutical market. Indian pharma companies have gained recognition worldwide by focusing on quality and affordability. However, alongside their success, the industry has faced various challenges and controversies that have posed a threat to their reputation and the overall integrity of the sector.

Here are some key insights about the Indian pharmaceutical sector:

• India holds the distinction of being the largest provider of generic medicines globally, commanding a 20% share in global supply by volume. Moreover, it meets 62% of the global demand for vaccines, highlighting its significant presence in the industry.
• In terms of production, India ranks third worldwide in volume and 14th in value. The country boasts a robust network of more than 3,000 pharma companies and more than 10,500 manufacturing facilities. These facilities offer a wide range of more than 60,000 generic brands across 60 therapeutic categories.
• The Indian pharmaceutical industry has earned recognition for its adherence to quality standards. It houses the highest number of US-FDA compliant pharma plants outside of the United States. Additionally, India's active pharmaceutical ingredient (API) industry is the third largest globally, with 57% of APIs listed by the World Health Organization (WHO).
• India has emerged as a major exporter of pharmaceuticals, serving more than 200 countries through its pharma exports. The country supplies more than 50% of Africa's requirement for generics, approximately 40% of the generic demand in the United States and around 25% of all medicine consumed in the United Kingdom.

The Imperative for Ethics, Integrity and Compliance

To maintain and enhance their current positioning, Indian pharma giants need to prioritize ethics, integrity and compliance. The following are key reasons why these elements are crucial for their long-term success:

• Rebuilding trust: Recent quality concerns and recalls have raised doubts about the industry's credibility. By prioritizing ethics and compliance, pharma giants can restore faith in the world's pharmacy and regain the trust of patients and stakeholders. The recent news report from Deccan Herald highlights the concerns raised by the US FDA regarding failures in India's pharma factories, including contaminated drugs and shredded papers. This has resulted in a loss of credibility for the industry.
• Global regulatory environment: The pharmaceutical industry operates within a complex regulatory landscape. Adhering to international standards and regulations is essential to ensure market access, mitigate risks, and protect the company's reputation.
• Patient safety and well-being: Ethical practices and compliance protocols directly impact patient safety. By upholding high ethical standards, pharma companies can prioritize patient well-being and ensure the quality and efficacy of their products.

Leveraging the Corporate Crime Database

The recent news announcement of the Corporate Crime Database introduces a valuable resource for Indian pharma giants that promotes transparency and accountability in the corporate world. This database provides comprehensive information on corporate crimes, enforcement actions and compliance-related matters. By leveraging this resource, Indian pharma companies can strengthen their ethics, integrity and compliance framework in the following ways:

• Use the Corporate Crime Database to identify and assess their compliance risks. The database provides information on a wide range of corporate crimes, including those that are specific to the industry in which the corporate is operating. By using the database, companies can identify the risks that they are most likely to face and develop strategies to mitigate those risks.
• Consider the dimension of learning from another’s mistake. Pharma giants can study these practices and adopt them to enhance their own framework. This will help them in taking preventive measures.
• Proactive compliance measures: By staying informed about enforcement actions and emerging trends in corporate crime, Indian pharma companies can proactively adapt their compliance programs. They can identify emerging risks and regulatory changes, ensuring that their compliance efforts remain up to date and in line with evolving expectations.

Upskilling the Ethics, Integrity and Compliance Framework

To maintain and harness their current positioning in the world market, Indian pharma giants should consider the following strategies to upskill their ethics, integrity and compliance framework:

1. Ethical Leadership and Tone at the Top & Mid Layer

Promote ethical leadership throughout the organization by fostering a culture of integrity and compliance. Both senior management and middle management play a crucial role in setting the tone at the top and middle layers. They should emphasize the importance of ethical behaviour, transparency and accountability, creating a strong foundation for the entire organization to follow suit. This ensures consistency in ethical standards and promotes a culture of integrity at all levels.

• Scenario 1: The Global Counsel Office/ Global Compliance Office (GCO) collaborates with the CEO to create an ethics hotline, fostering a culture of transparency and accountability.
• Scenario 2: The Chief Technology Officer (CTO) collaborates with the General Counsel's Office (GCO) and Ethics Lead to develop an ethics dashboard that tracks key ethical indicators, enabling real-time monitoring of ethical performance of the company. Few key KPIs that the dashboard should include are as below:
  • Data privacy compliance: Tracking compliance with data protection regulations and ensuring the responsible handling of personal and sensitive information.
  • Ethical vendor assessment: Evaluating the ethical practices of vendors and suppliers to ensure alignment with the company's ethical standards.
  • Ethical performance transparency: Providing stakeholders with transparent reporting on the company's ethical performance, initiatives, and progress towards ethical goals.
  • Employee ethics engagement: Evaluating employee engagement with ethics-related initiatives, training programs, and awareness campaigns.
• Scenario 3: The Learning Team conducts interactive workshops where leaders and managers openly share personal stories of ethical dilemmas they have faced and discuss how they successfully navigated those challenges without compromising on ethics. This practice reinforces the importance of ethical decision-making and provides valuable insights and guidance to others in the organization.

2. Robust Compliance Program                                                       

Establish a comprehensive compliance program that aligns with international standards and regulations. This program should include regular risk assessments, effective policies and procedures, training and awareness programs, internal controls, and monitoring mechanisms. Regular audits and assessments will help identify gaps and ensure continuous improvement. For an outlook / reference purpose please refer the Evaluation of Corporate Compliance Programs available on the website of DOJ.

• Scenario 1: GCO implements a centralized compliance repository, ensuring all policies and procedures are easily accessible to employees.
• Scenario 2: In collaboration with the GCO, the CTO introduces automated compliance monitoring tools that detect potential breaches and generate real-time alerts. Furthermore, the CTO should explore the utilization of AI and machine-learning technologies to enhance the Compliance Program, facilitating its robustness and effectiveness. Here are few examples of how these initiatives can be implemented:
  • Implementing machine-learning algorithms to analyse large volumes of data and identify patterns of non-compliance, enabling proactive risk mitigation.
  • Introducing automated notification systems that alert relevant stakeholders about potential compliance breaches in real-time, ensuring timely response and corrective actions.
  • Leveraging AI-powered chatbots to provide employees with real-time guidance and answers to compliance-related queries, promoting awareness and adherence to ethical standards.
• Scenario 3: The Learning Team designs an online compliance training program that includes quizzes and simulations to enhance knowledge retention.

3. Stakeholder Engagement and Collaboration

Engage with stakeholders, including regulators, healthcare professionals, patients and advocacy groups. Collaboration and open dialogue will help build trust and ensure alignment with industry expectations. By actively seeking feedback and addressing concerns, pharma giants can demonstrate their commitment to ethics, integrity and compliance.

• Scenario 1: The company actively engages with regulatory bodies and industry associations to stay updated on evolving compliance standards and best practices.
• Scenario 2: Collaborative partnerships are established with healthcare professionals and patient communities to address compliance challenges and improve patient outcomes.
• Scenario 3: Compliance officer, ethics head or investigations head should frequently participate in compliance summits where industry experts and stakeholders discuss emerging compliance challenges and share best practices.

4. Embrace Technology and Data Analytics

Leverage advanced technology and data analytics tools to enhance compliance monitoring and risk management capabilities. Implement automated systems for tracking and analysing data, detecting anomalies and identifying potential compliance breaches. This proactive approach will enable timely interventions and corrective actions.

• Scenario 1: In collaboration with GCO, CTO implements AI-driven compliance tools that streamline data processing and enhance accuracy in compliance reporting.
• Scenario 2: Company should explore integrating gamified learning modules that use virtual reality to simulate compliance scenarios and improve decision-making skills. For example, how to ethically deal with the health care professionals keeping in mind the integrity standards.

5. Continuous Training and Education

Invest in ongoing training and education programs to upskill employees on ethical practices, regulatory requirements, and industry developments. Foster a culture of compliance by ensuring all employees understand their roles and responsibilities in upholding ethical standards. Regular training sessions and knowledge-sharing initiatives will keep the workforce informed and engaged.

• Scenario 1: The compliance officer, ethics head or investigations head should conduct regular webinars featuring guest speakers who share insights on evolving compliance regulations. Additionally, they should publish best practices and facilitate anonymized sharing of critical case studies to promote practical understanding and enhance compliance knowledge within the organization.
• Scenario 2: CTO introduces a mobile learning app that allows employees to access compliance training materials anytime, anywhere on the go.
• Scenario 3: The learning team organizes an annual compliance retreat where employees participate in immersive training sessions and team-building activities.

In a rapidly evolving global landscape, Indian pharma giants must prioritize ethics, integrity and compliance to maintain their positioning and harness growth opportunities. By embracing the Corporate Crime Database and implementing the recommended strategies, these companies can fortify their ethical practices, ensure regulatory compliance and establish themselves as leaders in the global pharmaceutical market. Upholding high ethical standards and a robust compliance framework will not only safeguard their reputation but also contribute to the well-being of patients and the industry as a whole.

It is important to note that the views expressed in the above article are strictly personal and do not reflect the opinions of any organization mentioned.

Bio about Phani:

Phani is a veteran professional having more than 2 decades of professional experience in Statutory & Internal Audits, Internal Control Over Financial Reporting (ICOFR) and Investigations. He holds the designation of Qualified Chartered Accountant, achieving an impressive 43rd All India Rank, and is also a Certified Fraud Examiner (CFE). His experience stretches across various industries including banking, non-banking, manufacturing, pharmaceuticals, and construction.

He possesses exceptional leadership skills and has previously served as Internal Audit Manager with Nagarjuna Fertilizers and Chemicals Limited and as an Associate Director in the Statutory Audit practice of Grant Thornton India LLP. Currently, he serves as the Lead - Corporate Compliance at Dr. Reddy's Laboratories Limited. He has also been a distinguished speaker by participating in the Anti-Corruption Collective Action Playbook Training Series in 2022, organized by the Global Compact Network India.

Bio about Anuj:

Anuj is an experienced professional with experience in the forensics and risk space. He has worked on various high-profile and complex projects. He possesses exceptional skills and has previously served as a Manager with GT and EY in the Forensics Space currently he is working with Dr. Reddy Laboratories as a Corporate Compliance Manager.

Anuj is a Certified Fraud Examiner (CFE), Certified Information Systems Auditor (CISA), Certified Information Security Manager (CISM), and Forensic Accounting and Fraud Examination (West Virginia University), among others. He is also a qualified Chartered Accountant (CA). He is a frequent contributor to industry publications, with articles published on ACFE Insights, ACFE Newsletter and ISACA NOW.