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Turning Commercial Compliance Roadblocks into a Springboard for Innovation


Pharmaceutical Executive

While new regulatory requirements are often seen as a roadblock, they also present an opportunity to develop new and innovative solutions.

In 2016 a new anti-corruption law was put in force in Germany, closing a gap in the existing public bribery law with regards to physicians in private practice. The new law established criminal liability for any member of the medical profession who demands or accepts a benefit as consideration for prescribing medicines allocating patients, as well as for the briber. As a result, private practitioners now faced the risk of possibly being criminally prosecuted in relation to any income related to their medical practice that was not earned through their expertise as a medical doctor. As to be expected, the new law had a chilling effect on many forms of HCP engagement such as congresses and events.

In response, the German subsidiary of a leading global pharmaceutical company took the decision as a company to be amongst the more advanced companies in terms of interpreting the law, moving towards a very transparent approach and adopting a strict process for governing customer engagement. As a result, common customer engagement activities, for instance inviting physicians to attend international congress or scientific events, were stopped immediately.

The unintended consequences of the decision became quickly apparent: the commercial organization saw the new process as a major impediment, leading to numerous complaints about being less competitive compared to other firms. In response, the business initially tried to adapt and justify traditional ways of customer engagement that had been successful in the past, but when running it past compliance were quickly turned down. The compliance function started complaining that commercial was just bypassing them, whereas commercial leaders saw the compliance function as naysayers, not supporting the business, and killing all initiatives. An employee survey showed that the new compliance rules were considered the most important hurdle to becoming customer centric. To address the situation, the leadership decided to take a close look at the situation as the complaints exacerbated the natural tension between compliance and commercial. Realizing the difficulty of coming up with meaningful solutions given the entrenched positions, the leadership engaged us as an outside consulting firm to review the process that had been put in place.

Early on in the engagement, the general manager of the German subsidiary realized that the objective was not to just stop customer engagement activities that could create compliance issues, it was about replacing them with new, innovative, and compliant forms of customer engagement requiring close cooperation of business and compliance early on for designing.

Given the level of distrust, dissatisfaction, and animosity between the business and compliance, it was critical to turn those sentiments into a positive mindset. The first step was to understand, clarify, and analyze the expectations, assumptions, and goals of the various stakeholders. Understanding the different perspectives was crucial to making the underlying purpose of the new requirements transparent: Why do we want to be leading with transparency? The project team realized the opportunity to achieve a competitive advantage through creating new forms of engagement that were closely aligned with a new regulation. But in order to take advantage of the opportunity, it was key to have clear rules of what was allowed and what was not allowed.

The breakthrough occurred when the team decided to take a closer look at the compliance issues. It became quickly apparent that some commercial activities would pose no compliance risks at all. The discussion also identified certain activities that would never be acceptable.

Instead of adopting a one size fits all approach, the team developed a traffic light system, defining the criteria for red (never acceptable), green (always acceptable), and yellow (requiring a thorough review and thinking it through). A by-product of the project was a streamlined compliance guideline, replacing a fifty-page document with a seven-page checklist.


To accelerate the process, the team created a fast track process, with a commitment from compliance to review quickly, which helped create a foundation of collaboration between the two sides.

This pragmatic approach helped the team to move beyond the initial distrust, understand the intent, and organize a process so that routine issues that did not create any compliance risk whatsoever could sail right through, while being very clear about what would not be approved in the first place, which saved time and energy. Being able to get typical types of customer engagement that had been classified as green quickly through the process was a significant win, so commercial could focus on working with physicians and not on getting events approved by compliance.

This traffic light system was a key achievement because it helped on the one side facilitate better processes and led to far more streamlined and quicker decisions. But there was another major benefit: the experience of approaching a major issue in a very structured way, overcoming the functional conflicts, and quickly moving towards a solution led to a shift in mindset. The project demonstrated the value of using a cross functional team to work on creating a joint solution.

The compliance function started to build a completely new roadmap on how to engage as a company on compliance discussions. Moving from an enforcement role of compliance towards a support function was extremely important, as the organization had to abandon traditional ways of engaging customers and invent new, compliant ways of achieving its goals-which can only be done through early and close collaboration between business and compliance.

The traffic light system also reduced the significant effort invested in pre-approval activities. Moving from a strict rule-based towards a principle-based approach to compliance shifted the focus from preapproval towards training, handing over the responsibility to the business (while implementing strong monitoring of events post execution to identify potential issues).

The project also established the foundation for innovation. The general manager explained: “Of course I want us to do basic events and engagement of physicians. But we also want to develop innovative forms of cooperation that are completely aligned with compliance. We want to develop new forms of deep customer engagement that differentiate us from our competitors. This new mindset and cooperation between compliance and the business allowed us to do that. We want to really understand what the value of our products is, how to apply them, and how to talk to customers and patients.”

While new regulatory requirements are often seen as a roadblock, they also present an opportunity to develop new and innovative solutions. However, doing so requires a foundation of positive, constructive cooperation between compliance and the business.

Thomas Bertels, Partner; Friedemann Lutz, Director; and Guenter Kloucek, Director, all of Oxygy Consulting.

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