Risk tolerance in pharmaceutical compliance: dealing with shades of gray

A panel of compliance executives discussed their views on risk tolerance for pharma, and how they balance risk and reward, while maintaining integrity of the company, as well as the compliance function.

Daryl Kreml, chief enterprise risk and compliance officer for Sage Therapeutics, offered his insight into the nuanced approach required when considering risk in the pharmaceutical industry. "Risk is about an uncertainty, an opportunity with an uncertainty, and there's a natural business instinct to say, what's the risk-reward calculation?" Kreml explained. He said that some will calculate risk tolerance as high as the potential reward makes it. But in any calculation, there are clear boundaries: "It's never an acceptable risk to commit a violation of law. It's never an acceptable risk to lose your integrity."

Eric Rogers, vice president, ethics & compliance, Alexion RDU + AstraZeneca Japan, said, "I spend a lot of time thinking about how to titrate whose call it is to make the risk tolerance call." Rogers emphasized the importance of considering various factors, including reputational and financial downsides, when assessing risks in gray areas.

This nuanced approach to risk assessment extends beyond mere policy making. Compliance officers are increasingly expected to engage in strategic discussions about risk tolerance at the highest levels of their organizations. As Kreml noted, "You draw that line wherever it's appropriate for your calculation, but once you draw it, stand by it again, it's your integrity."

Maintaining integrity and commitment to upholding standards remains at the core of effective compliance programs. Kreml emphasized this point: "People want to have integrity. They want their company to do the right thing." He advises compliance officers to remind management teams to operate with integrity and to embody that integrity themselves.

Sara Blessing, director, compliance counsel at Ionis Pharmaceuticals shared her own experience communicating with management teams, when they were pre-commercial, but quickly approaching three launches. “We have had to do a lot of education. These are the seven elements of the OIG guidance. These are at a bare minimum, what we need to have in place. And these are the risks if we don't,” Blessing said. “This is what it means to your teams if we are not well-resourced.” Fortunately, the management teams collaborated and shared resources to get compliance alignment.

Rogers echoed this sentiment, stressing the importance of building relationships and demonstrating understanding of the business: "Show that you understand the business and show that you are willing to work together with them."

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DEPOSITPHOTOS@alphaspirit