Internal whistleblowers ensure Pharma companies stick to guidelines and rules

The precedent set by former Ranbaxy employee Dinesh Thakur, who blew the lid over the company’s malpractices, has encouraged employees of pharmaceutical firms who have become crusaders of upholding quality and compliance of their respective companies. Research reports released by the forensic divisions of consultancy firm Deloitte and EY reveal a growing trend of whistleblowing by employees who are taking up the issue of non-compliance with regulatory authorities or reporting it internally. 

With the growing maturity of global regulations, protection offered to whistleblowers and a possibility of being awarded bounty, revolution of whistleblowing has gained significant momentum,” said EY’s report. 

Deloitte, which interviewed 33 companies, found one of the triggers for regulators to look at non-compliance came from tipoff from whistleblowers. Companies which have set up an internal whistleblower hotlines found tip-off from their employees a starting point in addressing non-compliance issues.

Indian pharmaceutical companies are among the major suppliers of medicines to some of the biggest markets of North America and Europe. However, in the past couple of years, these companies have come under intense pressure from US drug authorities (one of the biggest export markets). 

Out of the 19 warning letters issued by the US Food and Drug Administration in 2014, eight were to Indian firms. The issue of quality became a rage after the Ranbaxy incident, which later forced USFDA to to tighten screws around other Indian drugmakers. However, compliance might be far from settled. 

Deloitte said companies admitted they still lack efficient internal controls, skilled workforce and zero tolerance towards malpractice and have a problem adapting to technology upgrades. Ajaz Hussain, who was part of the USFDA team in India, said that the issue of compliance can be corrected only through behavioural change. “The attitude of Indian manufacturers is more output oriented than quality driven,” he said. Hussain said leadership teams should send out a strong message on importance of  of quality and encourage the staff to report wrongdoings without fear. 

“We have found that employees of companies which don’t have a whistleblowing system internally expose the issue to authorities or to press,” said Rajiv Joshi, partner-forensic division at EY. Despite the Companies Act laying down guidelines for internal implementation of whistleblower policy, corporate India might not be implementing it in full spirit. 

“Ignoring the importance of whistleblower policy is working against companies,” said Joshi. “Unlike earlier, now people have options like social media where they can speak out against fraud within their companies.” 

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