Compliance and Legal Not Always Eye-to-Eye

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Pharmaceutical Executive

As the role and stature of the compliance officer grows, legacy senior management structures and hierarchies can accidentally pit lawyers against one another

As the role and stature of the compliance officer grows, legacy senior management structures and hierarchies can accidentally pit lawyers against one another.

What is strictly legal in the context of sales and marketing practices, working with government officials in global markets, and running and reporting on clinical programs, may not always be the last word on how a company should act in these areas. In other words, companies often need to go beyond adherence to the letter of the law, and instead consider the broader implications of specific conduct, before a decision is made, or a policy developed.


As the role and function of compliance teams grows within pharma companies, different approaches to the law, and what it should look like in practice, can differ, which sometimes pits internal lawyers against one another. “Compliance wants to truly ferret out any wrongdoing that’s going on – that’s not to say legal doesn’t – but compliance wants to expose it,” says Tim Ayers, VP, chief compliance officer, at Dendreon, a biotech focused on cancer therapies. “Legal wants to wrap everything under privilege, not to hide things, but to deal with things from a very legal, mitigating risk perspective, whereas compliance wants to come in and say, ‘Listen, this is what we’ve done, let’s fix it.’”

Companies operating under a corporate integrity agreement (CIA) by necessity have elevated compliance officers to the c-suite, but in other companies that haven’t had to deal with Office of Inspector General (OIG) or Department of Justice (DOJ) investigations – and there aren’t many of these left – compliance teams are sometimes subordinate to legal departments, even though the members of both groups hold law degrees. It’s in the application of the law, where the hairs get split. “Legal likes to ask very narrowly tailored questions, specific to the legal issue,” says Ayers. “And it might be perfectly sound legal advice, but it might not make sense from a compliance perspective, at forty-thousand feet.”

So what is the right organizational structure for compliance teams, and the chief compliance officer? “I used to be of the opinion that it all depends on the company’s evolution and lifecycle,” says Ayers, who was formerly associate general counsel and executive director of compliance at Seattle Genetics, and who has also served as general counsel at Allos Therapeutics, Salix Pharmaceuticals, and as a regional attorney at Pfizer. “But now I’m becoming increasingly of the opinion that there is an inherent tension between legal and compliance, and if [compliance] is subordinate to legal, it’s inevitable that an issue will rise up which literally speaks to this conflict of interest.”

For more on the issue of compliance, and how companies are bringing compliance personnel into the upper echelons of senior management, look for PharmExec’s feature on the subject in the January issue. Additionally, Ayers and many other pharma compliance executives and government regulators will be on hand for CBI’s 10th Annual Pharmaceutical Compliance Congress, to be held at the Ritz-Carlton in Washington DC on January 29–30.