Compliance Man Chooses the Target with Tim Khasanov-Batirov.

Episode 1: Healthcare Industry

Welcome to Episode 1 of Compliance Man Chooses the Target with Tim Khasanov-Batirov series of podcasts. My goal is to highlight matters that should be on agenda of practitioners that deploy compliance programs in industries or countries of active FCPA enforcement. In next three minutes, I will target three specific matters that you might like to address in the course of implementation of your compliance program. Today we will focus on healthcare business.

Target #1: Interactions with Healthcare Professionals.

You might heard from business people that giving souvenirs or flowers to doctors is acceptable in certain cultures. They might say that in absence of corruption intention it is just fine. What is the best way to find out is it a good idea or not for a particular jurisdiction? I would recommend checking out local legislation, as in some countries transfer of anything of value to doctors from pharmaceutical company is just forbidden even if you do not want to influence the doctor.

Target #2: Clinical Trials & Research.

Very often pharmaceutical companies engage clinical research organizations (CROs) to do scientific research or conduct clinical trials for them. Checks for such services are usually high. Clinical trials is an integral part of the official approval process required for marketing of your medicines. Consequently, CROs might be linked to officials within governmental bodies responsible for issuance of industry related licenses. Just check out if your organization:

  • Engage CRO;
  • Pay Fair Market Value for their services;
  • Has business justification to engage CRO.

Target #3: State Bids.

In many nations, your sales to state owned hospitals are conducted through local distributors. Definitely, participation of distributors in state bids might pose FCPA risk. Here we can refer, for instance, to Teva case in which distributor was part of the scheme to funnel bribes to local politician. Please also note though that in many instances sales to end-user, which could be a state institution is conducted by sub-distributor. Thus, the supply chain becomes longer. In this case you might want to initiate due diligence of the sub-distributor to ensure transparency and business justification of your bonus payments to all participants of your sales to a governmental entity.

Join me for the next episode of Compliance Man Chooses the Target with Tim Khasanov-Batirov. 

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