Life Sciences Horizons Brochure 2025 - Flipbook - Page 96
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2025 Horizons Life Sciences and Health Care
It was only a gift: Identifying and mitigating compliance risks
The life sciences industry tends to be a sector most
replete with gifts and hospitality, and without people
properly realizing the associated risks, and the severity
of those risks. Modest salaries, rising medical costs,
and increased competition are all factors that foster
an environment where bribery and corruption can be
a point of difference in the medical and health space.
Adding to this concern is the fact that the majority of
the life sciences sector operates in emerging markets
where growth opportunities are rife and intense.
In many of these markets, physicians can be
considered as government officials, raising the
compliance consequences.
At their extremes, gifts and hospitality policies can be easy to
comply with. Our advice is principally for the behaviors existing in
the liminal space. Branded paraphernalia for low-cost marketing
and brand awareness is invariably OK; whereas expensive and
extensive overseas travel for tourism and leisure is not.
The challenge can be in the form of educational opportunities
(which if deployed correctly are important for scientific awareness
and training), or valuable free products (that should not be used
commercially). The industry relies on the sharing of new
techniques and knowledge; but how is that monitored? Are you
able to confirm events, trainings, and conferences happened,
and sponsored attendees were present, and that the activities
were actually relevant to the practice of the gift and to the
hospitality recipients?
For devices or drugs offered as part of demonstrations or for
indigent patients, can you marry inventory with sales, present
records of proper use, and be prepared to distinguish from
inducements for future purchases?
Another consideration often overlooked is conflicts of interest
and employment. A “gift” can be an offer to employ or engage a
family relation or close connection. It can also be the engagement
of a related third party; they may not be offering the best price
or service for the business, and could then be privy to
confidential information.
To avoid regulatory risks associated with gifts, we advise:
Create a concise gifts and hospitality policy, and separate
register.
Think of gifts and hospitality broadly.
Know there are regulations that govern marketing, which vary
across jurisdictions, and benchmark activities with trusted
counsel against your operations and your peers.
Audit your third parties’ activities, and not just distributors or
medical associations, but also service providers, like travel
agents.
Attend some of the events you sponsor.
Be able to clearly identify health care (even if animal, plant,
human) initiatives as a core principle of any sponsorship.
Document and record decisions and receipts.
Encourage transparency about requests, demands, and
rejections.
Khushaal Ved
Partner
Singapore
Stephanie Yonekura
Partner
Los Angeles
