compliance risk assessment
Best Practices for Conducting a Compliance Risk Assessment for Life Sciences Organizations
The regulatory world makes life sciences compliance complex. Greater regulation means higher risk. However, it’s challenging to quantify that risk without an assessment. Without a holistic picture of risk, organizations are in greater danger of exposure to non-compliance, which could result in costly fines, reputational harm, and other business-altering consequences. To counter this, your organization needs a compliance risk assessment.
Such an assessment is imperative to complete annually and requires a framework that’s both flexible and scalable. When you have this process in place, you can be more risk-aware and ensure compliance with changing regulations.
In this post, we’ll provide you with the basics of life sciences risk assessments and best practices to use when conducting one.
Why Are Compliance Risk Assessments Critical?
Risk is never off the table in life sciences. Your organization is always under the microscope, facing scrutiny from regulators. Additionally, you have multiple segments of your business that each deal with different types of compliance risk. A huge obstacle is that most life sciences companies lack an enterprise view of compliance risk. With so many challenges and requirements, you will likely not achieve this comprehensive approach without regular risk assessments.
Compliance Risk Assessment Is Different from Other Risk
Another component to consider is that compliance risk assessments are different than evaluating for other risks. Compliance is non-negotiable, although sometimes open to interpretation. In most cases, you have clear guidelines that you need to follow. General risk, in many ways, is more unpredictable.
Is Your Risk Assessment Framework Stale?
While you likely have some program in place, when was the last time you updated it? Does it include newly updated regulations and guidance, such as learnings from recent fraud settlements by life sciences company or the Special Fraud Alert for Speaker Programs issued by the DOJ (Department of Justice)? Another important law to consider is the Sunshine Act, which regulators updated in 2021.
Failure to keep up with these changes as it relates to risk assessments could mean you aren’t meeting the mark on compliance. This gap could jeopardize your organization’s future. To ensure you don’t miss these critical regulatory mandates, your life sciences company should have a standardized risk assessment process. As noted, it should be flexible, comprehensive, and scalable. So, what are the best practices for this risk assessment framework?
5 Best Practices for Designing a Compliance Risk Assessment Plan for Life Sciences
Your compliance risk assessment should be robust to mitigate risk and keep your company in line with laws and rules.
Devise a Framework and Methodology
The most fundamental aspect of any compliance risk assessment is the framework and methodology you use. The framework identifies your compliance landscape, namely, all the laws you must adhere to in operating your business. It further organizes it into specific domains. A good framework should be dynamic and address life sciences compliance, specifically.
The methodology is how you objectively and subjectively assess risk. You’ll be determining:
- How likely is this risk?
- What parameters are in place to avoid this risk?
- What are the impacts of the risk should it become a reality (i.e., legal, financial, business, and reputational)?
Remove Silos in Compliance Risk Assessments
There are many stakeholders in compliance for your organization. However, integration of all in a manner that ensures sharing of information, accountability, and actions is essential. There are many parts to compliance that touch different people. While this is complex, it’s not impossible to create a singular view and source of truth. You can accomplish this in several ways, including:
- Using technology to enable multiple people to have insights to data on compliance.
- Assigning “owners” of compliance, which could be individuals or committees.
- Receiving feedback and input from a cross-functional team.
Ensure Your Assessment Is Actionable
The compliance risk assessment is just that, an assessment. However, you need to go beyond the evaluation and ensure that it’s actionable. You should have mitigation and remediation plans in place. Whatever the outcome of your assessment, you should be able to operationalize it.
For example, speaker programs for life sciences carry huge compliance risks. The DOJ is especially suspect of these. Once you understand your risk exposure, you need to take an actionable step toward preventing non-compliance, such as using speaker program monitoring software.
Identify Gaps in Your Compliance Ecosystem
With any assessment, you’re going to find gaps. It would be ideal for you to align control measures and compliance mandates perfectly. However, that’s challenging for many reasons, and being in the life sciences space makes it even more so.
The best way to handle this is to be transparent about gaps. Then, you need to decide the best course of action for control measures. Do you need tools? More people? Outside support? Better processes? Whatever the deficit is, find ways to address them.
Treat Your Framework and Methodology as Living, Breathing Documents
Nothing stays the same in compliance. There are always new risks and challenges. Your framework and methodology can’t stay static. As you add new controls to address specific risks, you’ll document that and any changes going forward.
The biggest asset you’ll have in evolving your assessments is data. Data is the fuel for most all business efforts for life sciences companies. Risk is no different. You’ll have internal data to track progress coupled with industry data that can supplement other areas. Data-driven decisions are and will continue to be integral to operationalize your assessments.
Ensure Assessments Cover Third Parties
The third parties you work with should be part of your assessment of risk compliance. That’s because most violations of the FCPA (Foreign Corrupt Practices Act) involved a third party.
A third-party due diligence program should be part of your risk assessments. While this involves extra work, it’s not something you want to leave an afterthought. Using technology tools, you can streamline the process and minimize any exposure to compliance issues that would stem from using a non-compliant vendor.
Do You Need Help with Compliance Risk Assessments?
Compliance and risk are two problematic areas of the life sciences industry. They are inherent and come with complexities that not just anyone can understand. However, having the counsel of experts that understand the industry and have specially designed software for compliance processes are two ways to manage these challenges. You can get both when you work with MedCompli. Contact our team today to discuss how compliance meets innovation.