List of Commercial Compliance Policies and Procedures You Should Develop

Life sciences compliance is under intense pressure to be more effective and meet rising board and regulatory expectations. Maintaining commercial compliance means a structured framework ensuring that pharmaceutical, biotech and medical device companies operate ethically and within the law. It encompasses internal policies and procedures set by companies and external regulations enforced by federal and state authorities.

What Are Compliance Policies?

Compliance policies are structured guidelines designed to ensure an organization operates within legal and ethical standards while mitigating risks.

These policies regulate interactions with healthcare professionals (HCPs), marketing practices, and financial transparency in the life sciences industry.

Implementing robust commercial compliance policies helps companies adhere to regulatory bodies’ requirements, avoid fines and sanctions, and maintain ethical business practices.

Purpose of Compliance Policies

The primary goal of compliance policies is to identify potential compliance risks and establish preventive measures to minimize legal repercussions.

Effective compliance training programs ensure employees understand regulatory and ethical responsibilities while aligning corporate practices with legal and regulatory adherence standards.

Additionally, compliance policies foster transparency reporting requirements and ethical decision-making, protecting organizations from healthcare fraud prevention issues.

External Regulations Governing Life Sciences Commercial Compliance

A. Federal Regulations and Laws

Several U.S. federal laws and regulatory bodies govern commercial compliance in life sciences:

1. Anti-Kickback Statute (AKS): Prohibits exchanging value for referrals under federal healthcare programs to prevent fraud. Also bars physicians from referring patients to entities where they or their family have a financial interest.
2. Stark Law (Physician Self-Referral Law): Prohibits physicians from referring Medicare/Medicaid patients to entities they have a financial interest in unless an exception applies.
3. False Claims Act (FCA): Holds companies liable for submitting false claims for reimbursement to government healthcare programs.
4. Foreign Corrupt Practices Act (FCPA): Criminalizes bribery of foreign officials, including doctors in publicly funded healthcare systems.
5. Affordable Care Act (ACA) Compliance Provisions: A U.S. federal law designed to expand health insurance coverage by regulating the insurance market, offering subsidies, and mandating coverage for most Americans.
6. Sunshine Act (Open Payments Program): Requires public disclosure of payments and transfers of value made to HCPs and HCOs.

State-Level Compliance Regulations

Some states enforce stricter compliance laws beyond federal requirements:

1. California Compliance Program – Requires pharmaceutical companies to have a detailed compliance program under California Health & Safety Code §119402.
2. Massachusetts Marketing Code of Conduct – Imposes limits on payments and requires detailed reports of expenditures.
3. Minnesota & Vermont Disclosure Laws – Ban or strictly regulate gifts to HCPs.
4. New Jersey Gift Ban – Limits meals and payments to prescribers.

Internal Policies and Procedures for Life Sciences Compliance

Developing a comprehensive compliance framework requires implementing various types of compliance policies tailored to specific regulatory requirements and risk areas. Below are the most critical compliance policies that organizations in the life sciences industry should develop and enforce.

A. Corporate Compliance Program Structure

Most companies follow seven elements of an effective compliance program, recommended by the OIG:

1. Clearly define commercial activities, HCP engagements, and transparency reporting.
2. Oversee policy enforcement and risk assessment.
3. Ensure employees understand regulations and ethical standards.
4. Conduct regular audits to detect and prevent violations.
5. Implement confidential reporting mechanisms (e.g., anonymous hotlines).
6. Define disciplinary actions for non-compliance.
7. Regularly update policies to align with evolving regulations.

B. Key Internal Policies for Commercial Compliance

Companies implement the following internal policies:

1. HCP & HCO Engagement Policies

Establishing HCP engagement policies ensures that interactions between pharmaceutical companies and healthcare professionals comply with ethical and legal requirements. These policies cover:

• Fair Market Value (FMV) compensation for speaking engagements, consulting, and advisory boards.
• Contractual agreements defining the scope of HCP engagements.
• Prohibited inducements to influence prescription practices.
• Aggregate spend reporting obligations under the Sunshine Act and other transparency laws.
• Monitoring and auditing of HCP interactions to detect potential compliance violations.
• Restrictions on gifts, entertainment, and travel benefits offered to HCPs.

2. Speaker Programs & Medical Advisory Boards

• Ensure that speaker selection is objective and merit-based.
• Limit meals and hospitality expenses to reasonable amounts.
• Track speaker payment history to prevent overcompensation.

3. Transparency & Aggregate Spend Reporting

Global transparency laws such as the Sunshine Act and EU Transparency Directives require companies to track and disclose financial relationships with HCPs. Policies should cover:

• Accurate documentation and disclosure of payments and transfers of value.
• Regular internal audits to ensure compliance with reporting laws.
• Standardized reporting formats for submission to regulatory agencies.
• Integration of automated compliance solutions to streamline reporting processes.

• Training and support for employees to understand reporting obligations.

4. Promotional Compliance & Off-Label Marketing Controls

Pharmaceutical companies must ensure that their marketing strategies comply with FDA regulations and industry guidelines. These policies should include:

• Truthful and non-misleading advertising that aligns with approved drug indications.
• Prohibition of off-label promotions and stringent enforcement of content review processes.
• Compliance with digital and social media regulations, including influencer partnerships.
• Internal approval processes for promotional materials before dissemination.
• Regular training programs for sales and marketing teams to maintain ethical practices.

5. Expense Monitoring and Auditing

Expense report audits help identify fraudulent expense claims and non-compliant transactions. Internal compliance policies of a life sciences company should cover:

• Verification of HCP-related expenses to ensure FMV adherence.
• Detection of duplicate, excessive, or falsified expense claims.
• Automation of expense reporting and auditing processes to enhance accuracy.
• Comprehensive review of receipts, invoices, and justifications for compliance.
• Clear guidelines on allowable business expenses to prevent misuse.

6. Anti-Bribery & Anti-Corruption Policies

To prevent legal repercussions related to unethical business practices, companies must adopt anti-bribery and anti-corruption (ABAC) policies that:

• Define prohibited transactions involving HCPs and government officials.
• Set guidelines for gifts, donations, and hospitality expenses to avoid conflicts of interest.
• Require third-party due diligence for vendors and partners to mitigate corruption risks.
• Establish internal whistleblower protections to encourage reporting of unethical behavior.

Implement robust financial tracking systems to monitor payments and transactions.

7. Internal Auditing & Risk-Based Monitoring

A risk-based compliance monitoring approach helps companies prioritize high-risk areas through data-driven analysis. Key components include:

• Continuous risk assessments to identify vulnerabilities and high-risk transactions.
• Automated monitoring tools to detect anomalies and potential compliance breaches.
• Regular compliance audits and real-time reporting to enhance oversight.
• Predictive analytics and machine learning models to forecast risk trends.
• Proactive remediation plans to address compliance gaps before regulatory actions arise.

Conclusion

Developing and implementing commercial compliance policies is essential for ensuring legal and regulatory adherence in the life sciences industry. Companies must establish risk management strategies, conduct expense report audits, enforce HCP engagement policies, and uphold healthcare compliance guidelines to mitigate risks and avoid fines and sanctions. By leveraging risk-based compliance monitoring and third-party due diligence, organizations can enhance their compliance frameworks and protect their reputations in the industry.