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Compliance Takes a Larger Role in Medical, Life Science Companies

When it comes to life science companies, compliance is starting to play a greater role. Where attorneys in medical, health care, pharmaceutical, and biotech companies were once focused almost exclusively on government rules, their responsibilities now extend far beyond regulatory compliance.

And the shift isn't isolated to major medical companies with robust legal and compliance departments. Even companies with as few as 25 employees are building up their compliance teams, according to the Wall Street Journal.

Beyond Regulatory Compliance

The Journal recently spoke with Paul Kalb, the lawyer-slash-doctor who heads Sidley Austin's health care and global life sciences practices. According to Kalb, the focus on compliance in life sciences companies is expanding beyond regulatory attorneys who simply keep the companies out of trouble with the government.

Today, compliance includes such tasks as:

  • Preventing conflicts of interest
  • Conducting expanded due diligence
  • Balancing patient privacy and transparency
  • Creating controls for developing and testing medical products

And that expanded definition of compliance is expanding everywhere, not just in the biggest companies. "I frequently get calls now from companies at the 25-employee level, they have a promising drug and they know they're going to grow," Kalb told the Journal. "Those companies are recognizing one of the first things they need to do as soon as they start interacting with the external world through clinical trials is to have a compliance program in place."

Role Confusion?

But the transition to a broader focus on compliance isn't always simple. The most sophisticated companies, the Journal reports, have separate compliance and regulatory functions. On the compliance side, compliance officers create procedures and processes, then monitor to make sure they're being followed. On the regulatory side, attorneys memorize the Code of Federal Regulations and provide day-to-day guidance to keep the company on the right side of the law. Simultaneously, the regulatory side is responsible for guiding the company on how to comply with those established rules.

But those split functions can create some confusion about who is responsible for what. After all, one hand is auditing for compliance with established rules while the other is advising on how to comply. When the company does something wrong, which department is held accountable?

That said, a little confusion is a small price to pay for expanded compliance -- and a greater role for attorneys and compliance officers in the daily functioning of medical and life science companies.

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