RC: What kinds of bribery and corruption risks is a life sciences company likely to face on a day-to-day basis?

Mason: The daily risks vary significantly according to size, whether a company is a multinational or an SME, therapeutic markets, geographies in which companies operate and particularly whether they use third party distributors or agents. However, a common risk factor is high frequency interaction with public officials, whether government officials, hospital procurement teams or healthcare professionals (HCPs), which is a feature of all life sciences companies’ activities, whether in relation to R&D, product authorisation and reimbursement, promotion, procurement, product training or support for medical education. Public sector bribery is generally prohibited so interactions with public bodies and officials are inherently more risky from a corruption perspective. HCPs and other officials are also themselves often highly regulated via professional and employee codes and policies. Where companies rely on third parties, these interactions may pose even greater risk as company controls and vetting may be weaker and more indirect.

Gaustad: Many of the typical activities life sciences companies engage in to generate brand awareness, drive revenue and conduct research and development can invite risk. From sponsoring research grants with universities, to conducting seminars to educate healthcare providers on your products, to obtaining regulatory approval for products, the counterparties in these transactions are often considered public officials in many countries. Bribery and corruption risk tends to be more pervasive for life sciences companies than for companies in other industries.

Jul-Sep 2015 Issue

CMS Cameron McKenna LLP