The growing risk of whistleblowing enforcement in pharma

Fieldfisher Partner, Miguel Vaz, gives his take on post-pandemic whistleblowers & the growing risk of such administration in the pharma & healthcare sector

The recent spread of legislation protecting the actions of ‘whistleblowers’ and increased public regulatory expectations of global corporate accountability, mean that businesses need to adopt a proactive approach to managing allegations or disclosures that point to misconduct within their organisation. Failing to grasp the law and regulations surrounding whistleblowing can be costly for businesses in terms of potential claims as well as damage to reputation.

The increased risk of whistleblowing for the pharma and healthcare sector

The role of the pharma and healthcare sector during COVID-19 put the sector in the spotlight of public and regulatory interest. The significant government support for the sector triggering additional funding for hospitals, clinical trials, testing centres and R&D, as well as the significant financial growth the sector has seen in the past years puts it under the public eye.

Increased public interest generated an increase in fraud (and other) allegations and investigations against the companies receiving funds or developing key outputs, like vaccines or tests. In addition, COVID-19 brought new workplace and ethical challenges to both the pharma and healthcare sectors. From remote working arrangements to workplace safety concerns and changes in the operation of facilities, recording and reporting of data are all areas likely to increase whistleblowing activity.

The recent National Business Ethics Survey and the second edition of the UK Whistleblowing Report revealed that 41% of all employees in the United Kingdom have directly witnessed misconduct within their employing organisation. However, only a limited number of them (approx. 39%) end up reporting it. These are missed opportunities for companies to be aware of issues or inefficiencies they can correct or should investigate.

Key changes also took place in the legal landscape and the renewed regulatory appetite for enforcement. Despite most pharma and healthcare companies having robust pre-existing Codes of Conduct and Whistleblowing programmes, there is a clear need for pharma and healthcare firms to revisit existing policies and make sure they are fit for purpose to accommodate new legal requirements coming into force across the globe and in particular, in the EU and US.

What should pharma and healthcare companies be doing to protect whistleblowers?

If you do not have an established internal whistleblowing programme, you should put one in place.

If you do have one, consider whether it remains suitable to both your risk profile and the countries where you operate. For example, does the new European Union Whistleblowing Directive require you to make any substantive changes to the way you investigate/report issues and to the protection you provide to people reporting them?

At the very least, if you have not done so recently, where appropriate, you should consider refreshing your employees and legal team's knowledge on how to file, manage or handle whistleblowing complaints via up-to-date whistleblowing training.

Whistleblowing is a high priority on anti-corruption agendas of many governments and regulators and its relevance as a corporate governance and regulatory tool is solidifying. Rather than seeing it as an extra compliance burden, companies should look at this legislative shift as an opportunity for businesses to enhance both their working culture and corporate performance.

 

Byline written by Miguel Vaz. Vaz is a Partner at European law firm Fieldfisher and a specialist in corporate investigations and regulatory compliance.

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