In this article, we will cover the following three topics.
The healthcare industry has vast regulations and requirements even across departments or job functions within a company. There are three types of rules, (1) eliminating quality fraud in pharmaceutical manufacturing based on law and ensuring strict safety management, (2) advertising regulations related to sales information provision activities following laws or industry standards and company standards, and (3) regulations over healthcare professionals to receive benefits for fair competition. These are intertwined with legal and voluntary restrictions.
When we overview and organize these industry-specific challenges and general compliance risks, there will be two risk types, those that are visible and those that are hidden, organizational cultures that are the cause of risks.
Visualizing these two, visible risks and the organizational culture that creates risks, and detecting the problem should be the first step toward risk management.
In July, Nikkei Research conducted two surveys: (a) compliance awareness among pharmaceutical company employees, and (b) pharmaceutical companies' response to compliance from physicians’ perspectives.
| （a）Pharmaceutical employees | （b）Physicians | |
|---|---|---|
| Method | Online | |
| Area | Japan | |
| Target | Pharmaceutical company employees | Physicians - experience in lecturing - academic article authors (no experience of lectures) - no experience in either lecturing or writing academic papers |
| Responses | 1,000 (320 were MRs) | 318 |
| Panel source | Nikkei Research affiliate panels | Nikkei Medical Online |
| Timing | July 13-20, 2023 | July 19-25, 2023 |
First, we will look at the rate of implementation of training programs.
The figure above is narrowed down specifically to MRs (Medical Representatives) and reflects the implementation rates of general training related to harassment or security. Comparing pioneer manufacturers and generic manufacturers, there was a difference in implementation rates over regular training. Nonetheless, even if not regularly practiced, but carried out upon necessity, it is rather better, however, it turns out that companies other than regularly holding training did nothing.
Let's compare between Japanese domestic and foreign companies. Since there are more domestic companies among the generic manufacturers, foreign firms have a higher implementation rate.
How about training related to guidelines and rules ranging from sales information provision activity guidelines to fair competition rules, which directly involve the activities of MRs? Including the sales information provision activity guidelines by the Ministry of Health, Labour and Welfare of Japan (MHLW), the implementation rate of generic manufacturers was about half across all. The JPMA (Japan Pharmaceutical Manufacturers Association) code, due to factors such as membership, needs certain cautions in reading the result, but there was a tendency that the company's own rule has a slightly higher implementation rate.
When comparing Japanese domestic companies and foreign companies, we need to be careful that, for foreign companies, these rules and guidelines in Japan are unique to Japan and are only necessary to be understood and addressed when carrying out sales activities in Japan. The rules are different from their home countries, as are the terminology and language.
Despite that, the high implementation rate of training regarding the sales information provision activity guidelines in foreign firms is striking. In sales activity, with each company’s effort, the case of inappropriate promotion activities has been declining, but the MHLW points out in its oversight report every time. In the 2022 report by the MHLW, there were a total of 23 reported incidents of suspected violations. Every pharmaceutical company is trying to carry out effective sales activities while aligning with regulations. Of course, this is a challenge for domestic companies as well, but it seems that foreign companies are pretty much aware of providing training, to avoid being caught due to a lack of knowledge and understanding of Japanese rules.
Question on whether the training corresponds to daily operations, for those who have received training, 60% of MRs of pioneer manufacturers and 50% of generic manufacturers replied that it sufficiently connects. The next most common response, from both pioneer and generic manufacturers, was that they make decisions case by case, depending on themselves or their superior's judgment, accounting for 30-40%. This means that the understanding of each individual or the right judgments by superiors is important.
Comparing domestic companies and foreign companies, in addition to the previously explained high training implementation rate, 70% of foreign companies responded that the training sufficiently corresponds to actual business operations. This indicates that the content and quality of the training may be slightly different from domestic companies.
The MRs go out to their sales activities after inputting various rules inside them. Doctors meet those MRs. Let's look at the voices of both sides. First, about the provision of information.
It seems that MRs feel they performed poorly and have negative experiences. Doctors, on the other hand, 35.2% responded that “the quality of information has declined, compared to before.” In the actual survey, we took respondents who answered, “Do not think so” to the question “Do you think the quality of information provided by pharmaceutical companies has improved compared to before?” as “deterioration in quality.”
For example, comments like “I can't do it due to our company’s policies even if other companies can” from MRs and “I don't want to meet with companies that have strict rules than necessary, because it's annoying” from doctors may reflect and caused by the differences between each companies’ policies and rules. If all companies had the same rules, there would be no such conversation, but in reality, it differs from company to company, and dissatisfaction is occurring.
How do doctors feel about the necessity of understanding these rules?
They feel the necessity most in situations upon writing academic papers or such, at 56.9%. About half of the doctors think that they need to understand industry rules to some extent but do not need to understand each company's rules. It appears that depending on the MR's understanding and response, the range of the levels of understanding among doctors is spread out.
Let's pick up some comments from the frontline workers related to these rules.
In this survey, 13.8% of MRs stated that they would change the degree of compliance depending on the client or case. According to the 2022 edition of the MHLW's monitoring report, as pointed out continuously since last year, it is not the MRs individually but is a structured act, such as rooted at the branch offices, where these adjustments are being made. These situations occur more frequently in online rather than in face-to-face meetings, or group meetings rather than in 1-on-1 meetings.
As mentioned earlier, the number of doctors who think they need to understand industry rules and individual company’s rules is limited, and their levels of understanding vary. In addition, differences between companies might be causing friction with doctors. Although some physicians expressed strong dissatisfaction toward stricter enforcement, most physicians accept the current situation and want explanations to be acknowledged.
Based on the results of impressions and opinions about the rules regarding information provision and customer service, there were more positive responses (orange) than negative responses (green) to the relaxation of rules.
The lowest acceptance was upon “information provision.” Less than 30% of physicians think it is acceptable to not receive enough information from pharmaceutical manufacturers due to aligning strictly to the rules. Doctors who are negative about this reach 43%.
Doctors are not proactively trying to understand the rules. They understand and decide through their touchpoints, from the MR’s responses and explanations. There are various MRs, those who can explain well in their own words, who talk tediously and end up annoying the doctor, or who consult with their superior and go across some boundaries, etc.
We’d like to propose two perspectives for an updated modern compliance risk management for the healthcare industry. First, “re-examination.” This has two meanings. One is to review internal training and check systems. Look for places where individual decisions are weighed too much. Another is to check whether your company’s own rules are not excessive. In general, compliance problems occur involving the MRs, who are on the frontline, facing directly with physicians. They are told to prepare 10 meals even though there are only 3 participants. Provide confidential information. Refusing is not realistic. Will you deal with these cases as saying that many other companies are doing it as well? Or will you try to communicate better and reject it nicely? How you respond should be the reflection of your company's culture, structure, policy, and MR’s communication and problem-solving skills.
The second perspective is ”back-to-your-bedrock.” Why does your company have stricter rules than others? If people do not have a good understanding of the background and by just announcing to obey those rules, they will fail. According to Nikkei Research’s survey, only 40% of doctors want the rules to be relaxed, which is not a large share. Rather, they are ignorant of the issue, just expressing opinions based on the atmosphere of the timing. We saw a lot of comments by doctors that they are fully aware of the differences between companies, and rules becoming stricter. They are welcome to comply and respect the terms if explained. They are willing to have good communication.
The MHLW's monitoring reports indicated that companies are becoming more scheming, such as emphasizing the effectiveness of products using colorful visual effects rather than explanatory words. The fact that these cases are being pointed out suggests that these practices are also getting the attention of doctors. Ultimately, it comes down to the way you dialogue and communicate. The core root of this dialogue is what each MR bases their words and actions on. That is based on the company's philosophy and codes of conduct. Not by strengthening checks or increasing training, but we think it is more important to have employee education by focusing on understanding the stories underneath. Not a defensive compliance, but shifting to a positive, proactive compliance. We believe in the necessity of approaching this with a long-term strategy.
In response to these situations, Nikkei Research offers a compliance service for the healthcare industry. There are three main features.
1.Trustworthy, honest responses