Whistleblowers -- Now More Than Ever, The Biggest Risk for Biotech and Specialty Pharmaceutical Companies in 2016

With the hot glare of Presidential politics already burning brightly on the pharmaceutical industry courtesy of the Turing Pharmaceuticals pricing controversy last month, the question remains, what should responsible CEOs do to ensure they do not fall under the microscope of suspicion as DOJ prosecutors and OIG investigators troll for targets with renewed vigor and purpose?

As I discussed in my previous post, the harsh reality is that biotech and specialty pharmaceutical CEO's and their companies are in the cross-hairs of prosecutors and regulators.  Some have already received subpoena's. Others likely will follow. Others remain on the radar. Rightly or wrongly, the industry and this sector in particular, has been highlighted with a very negative broad brush. 

While important distinctions between true scientific discovery vs. re-pricing of drugs decades old has merit, sadly, that distinction is likely blurred by the appearance of greed that is born on the backs of the most vulnerable in our society -- the sick, the elderly, the children, who are often the victims of the rare diseases for which these drugs are developed.

So who is watching? The DOJ, the OIG, Attorney Generals, the media, the public -- Yes -- but it is much closer to home -- your own employees. With the media focus -- and everyone else's -- intensified by the presidential political season that is only now hitting it's stride -- with over a year to go -- one of your own employees will be potentially the most damaging source of scrutiny -- as a whistleblower. 

In this way, nothing has changed -- the number one source for investigations and settlements of pharmaceutical companies have always been whistleblowers -- usually disgruntled current or former employees who feel, rightly or wrongly, compelled to go outside of the company to file a qui tam whistleblower suit with the federal government under the False Claims Act...and if successful, collect millions of dollars. 

As in the TAP case and virtually every case thereafter, some employee, often a well-educated middle or senior manager, who feels slighted and unappreciated, starts "keeping book" -- taking daily notes in a journal that eventually lands in the hands of lawyers, investigators and prosecutors. 

So how can this be avoided? What is a biotech and specialty pharma CEO to do who is genuinely committed to getting things right for the right reasons? Do you have to live in a world of mutual distrust, always looking over your shoulder, forever paranoid? No. As I shared in my earlier article, this is where sound governance, made up of an appropriate system of checks and balances, can create a credible, authentic and trustworthy culture that people can believe is real -- a culture of trust -- a culture of credibility. 

In the end, there is no substitute for authentic leadership -- but authentic leadership alone in this high risk world is not enough -- it is merely the beginning. Augmented by credible, tangible and appropriately scaled governance and compliance processes, authentic leadership -- that is both smart about what it knows and wise about what it does not know -- can make all the difference in the world. But... it truly needs to be real and tangible...to be trustworthy. This is where an effective culture of compliance whose message of integrity that starts at the top and that is led by senior leaders through their own example, can turn potential whistleblowers inward vs. outward. 

This is not just aspirational or academic theory. The good news is that these battles have been fought and won before. This really does work -- I have lived it and witnessed it countless times over the past twenty years. While circumstances change, core principles do not. 

There is no need -- and there is no time -- for smart, young but inexperienced professionals to "figure this out" alone. As with any championship team, it takes a mix of savvy, wise veterans combined with talented, young troops to come up with and apply the right solution, the right formula to win today.  If you'd like to learn more as to how I can help your team win in this challenging environment, please contact me, Steve Vincze, President & CEO, Trestle Compliance at [email protected] or at 617-800-3704.